Ordering items online and receiving them at your home on time is an example of well-executed retail logistics. As a consumer, you expect a relaxed, trouble-free experience, and so do your customers.
As your retail sales begin to grow, you'll need a more streamlined retail logistics strategy to handle increasing supply chain demands. The result is an improved customer experience and, ultimately, the consistent growth of your business. Learn more about retail logistics and how its various components can solve supply chain problems.
Simply stated, retail logistics are all the activities that get the products you sell to your customer in the allotted time set by the customer. It goes beyond merely packaging and shipping—it also involves ordering new items, managing inventory, and collecting data, as well as delivering product to brick-and-mortar retailers, if you opt to sell wholesale as well as direct-to-consumer (DTC).
Every process along the chain is vital to the health of your business. For example, if you skip the critical task of inventory management, you can leave yourself short while making your customer wait longer than necessary for their order. This can lead to customer frustration and negative reviews, which are never good for business.
The downside is having to hire more people, such as warehouse workers and managers. This added expense can severely limit the growth of your business. Instead, most ecommerce brands outsource their logistics functions to save money over the long term.
An ecommerce business in its infancy is typically easy to run. You may only have a few items to ship, and fulfillment may not seem like such a big deal. However, as your business grows, getting items to customers on time can become more complicated and time-consuming.
The following are primary examples of tasks associated with retail logistics. Keep in mind that you can, sometimes, run into others depending on the types of items you sell. When in doubt, it is best to consult with a professional fulfillment expert who has the experience of navigating the entire process.
The first part of retail logistics management is building your inventory. You need enough to meet demand, but not so much you’re wasting product or overspending to store overstock. Inventory procurement is one of the most crucial functions of your business.
Running out of products to meet customer demand will force you to temporarily stop selling or to sell on backorder. An automated system to help you manage inventory is a must-have when running an ecommerce business, and will help you avoid inventory headaches.
One of the greatest benefits of an efficient procurement system is saving time. By not having to worry about replenishing inventory constantly, you can focus on things that matter, like:
As your business grows, you will need better and more efficient ways to process incoming inventory. You will also have to find storage solutions that will not be so cumbersome that you can no longer operate.
In addition, you will need clear business procedures in writing, concerning:
A smaller ecommerce business can sometimes get away with having only one distribution point. However, as your inventory grows and you start shipping across the country, having at least one other warehouse will be vital.
Adding distribution and fulfillment centers will decrease the time that it takes to get products into the hands of your customers and save you money on shipping. But, again, having to set up multiple warehouses is a costly endeavor for most ecommerce providers. Outsourcing this function to an established third party that already has these warehouses set up and operating is a viable solution as your business grows.
Once the customer places an order for your product, it sets off a long chain of events. First, you have to validate the customer information. This step is the most crucial, especially when handling returned items.
Next, the correct item needs to match the order. While this may seem simple to a small startup business, it gets complicated fast when dealing with multiple orders, more than two distribution centers, and several SKUs.
As your business grows, your order management and tracking system will have to work flawlessly. Getting orders "mixed up" and in the wrong hands can do lasting damage to your brand’s reputation. As with most order fulfillment processes, having an automated system from a third-party provider will help prevent such problems.
Ecommerce shipping does not have to be complicated. By having a system in place to ensure the proper transport of your customers' packages, you are one step closer to fully automating your fulfillment.
When done right, expedited shipping can become a valuable marketing tool. Still, you need to ensure that what you promise is what you can deliver consistently. If not, it does not matter how good the product is.
For any ecommerce business, customer returns are a fact of life. It is the way you handle them that makes the difference. Return processing has to be done correctly. Otherwise, it can cost you more than necessary and lead to frustrated customers.
To make customer returns work for you, it is best to view them as a way to show off your company's superior customer service. Be sure to train your team to provide this service quickly and with a positive attitude.
Although retail logistics may seem like a complicated concept, it does not have to be with the right fulfillment partner. Airhouse provides ecommerce businesses of all sizes with cost-effective fulfillment solutions. Our team has the services you need to get your products from the warehouse to your customers' front doors. For more information, feel free to contact one of our fulfillment experts.
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