The term e-commerce logistics or e-logistics describes the entire physical processing of a customer’s order , independently of the marketing and sales aspects. This includes all the associated processes, from storage to delivery.
Overall, the e-commerce logistics process can be simplified to the four main steps below:
We are therefore only talking about sales via online stores . How, from the validation of the order, it is forwarded to the end customer? The concepts of logistics costs, deadlines and customer satisfaction are important.
Remember also that when buying on the Internet , it is your online store and your marketing that shape the perception of your brand. What will make a consumer buy your product and not that of the competition? And above all, how do you remove the brakes on online purchases, such as order processing, delivery or even returns?
Costs Associated With Logistics
A good logistics process can increase your customers’ satisfaction and confidence, especially when shopping online. But not surprisingly, it is also a major cost center.
The Underrated Power Of Logistics
11,900 . This was the number of additional active e-commerce sites in Q3 2020 compared to last year. In the first quarter of 2021 alone, this figure increased by 12%, with nearly 30 billion euros in sales.
This explosion of e-commerce, already observed for a few years now, can be explained recently by the global health crisis, but also by a change in consumer behavior.
More and more people are turning to e-commerce, for various reasons. One of them being that there are more offers.
Online retail therefore offers direct-to-consumer brands an excellent opportunity to gain a foothold and successfully compete with the giants of the web. However, one of the biggest challenges is logistics. This requires a lot of resources to be truly effective.
The Different Costs Of Your Supply Chain
Whether you manage your logistics internally or already use an external service provider, logistics costs are numerous. Here are the main ones, which you should keep an eye on and why you should take stock to optimize your costs:
- Costs Of Your Current Organization And Storage : all charges and expenses (fixed and variable) associated with the operation of the building, the business, depreciation, management of perishables, etc.
- Material Costs For The Proper Functioning Of Order Processing (example: computers, tablets, apps and software, tools and machines, packaging).
- Insurance Costs that compensate for the risks of accidents, incidents and other damage.
- Costs Of The Delivery Service (S) To The End Customer . It will depend on the options you choose and the contracts traded.
- Labor Costs : the number of people needed, training, safety, management of activity peaks, etc. Return management costs.
Logistics costs are therefore numerous. And the more your business grows with increasing e-commerce sales, the more financial and time resources you will need. The main problem with internalized management of your logistics is the increase in fixed costs . The more you sell, the more they will grow and take up a significant portion of your capital.