5 Logistics Challenges in Ecommerce
Logistics is a huge part of ecommerce and often underestimated by sellers. Many business owners are great at creating a product page and creating sales, but unfortunately succumb to the challenges that come with logistics. It’s a shame to see so many businesses fail because of failure to cope with the demands of logistics. For the most part, logistics is about identifying the challenges and planning your execution. In this article we will discuss 5 possible challenges to look out for:
- Products & Stock
Potentially the biggest challenge in logistics. As a business owner, you will definitely pay extra attention to your inventory and ensure that you are always stocked up. You also know your product very well and are ready to start taking orders. Things are going to go great right? Wrong. Petty stuff like your product information and weight may be overlooked, and end up becoming the biggest problem you will face; your carrier service is now charging you a surcharge because of the extra weight, and possibly not be able to deliver your product because the information is incorrect. Suddenly you have a stock problem and are unable to deliver, and subsequently created a delivery lead time problem. On top of that, your margin is affected because of the surcharge on the extra weight earlier. Therefore, stocking and product preparation is not to be taken lightly. Check, and check again to make sure you have everything right.
- Pick and Pack
Pick and pack actually requires more time and effort than you would imagine, and time and effort translates into cost. The more picking and packing to do, the more costly it is for the business. So keep in mind that the cost is not negligible and for some low cost products, they cost more than the product itself. Things will start to really get challenging when you start scaling. So make sure you invest in proper warehouse management systems and softwares that will help you manage.
- Delivery Lead Time
So many things could go wrong during delivery; the package could get lost, the carrier may fail to deliver, the goods may be damaged, or your carrier could be having technical difficulties and take longer than the promised time to deliver. These are all challenges that end with bad lead time, and that you need to prepare and have a solution for. Although things may at times seem like they’re not within your control, it is crucial to understand that the customers deal with the seller and not the carrier. So provide enough customer support to keep their minds at peace while you solve the delivery problem. Create an SOP for potential delivery issues so that they can be promptly solved.
- Delivery Pricing
Don’t try too hard to make the customer pay for every cent of delivery. In ecommerce, it is a norm for businesses to sometimes absorb delivery costs, even to a point of free delivery. If you have to charge for delivery, do some research, get some information through surveys and find out how much your target customers are willing to pay for delivery. Set a standard delivery price, and absorb the balance if there is any extra. Your decisions should revolve around customer satisfaction because good reviews is what generates good sales.
- Waybill Automation
Way too much time is spent keying in shipping information. It will become a bigger challenge and your sales volume increases, so invest in getting a system that allows you to automate your waybills. Most systems can be directly linked to your carrier’s system, and if your carrier does not have a system, it’s better to look for one that does.
So to avoid any breakdown in your logistics, take every part of planning seriously. Simulate the process and make sure it is as foolproof as possible. Get help if you need to.