Succeeding with operational logistics for e-commerce companies means having enough products in stock to meet customer demand and get those items to people on time. Plus, it’s necessary to avoid keeping too much inventory on hand and ensure that when you order supplies, the relevant providers get them to you promptly and at reasonable prices.
Here are some actionable strategies for optimizing your operational logistics and keeping customers happy.
Focus on What You Can Control
A 2021 survey of people who own small businesses showed that 50% reported supply chain disruptions causing significant issues for them. Additionally, 86% of all parties polled anticipate the troubles persisting for at least five more months.
Scrutinize your supply chain to identify options within your direct control. For example, could you pay more to have one of your top suppliers fulfill rush orders for you? Is it possible to change suppliers so that the goods you order can travel shorter distances to reach your company’s headquarters? Examine the best ways to improve those controllable aspects, even if you don’t make immediate progress.
Once you’ve tweaked many or all of the factors in your control, investigate what you could do to be more transparent with your customers about what you can’t affect. Perhaps your order fulfillment times have increased by a week on average due to ongoing supply chain challenges. In that case, give people that detail and let them know about any options they could use to get items dispatched faster.
Consumers understandably get frustrated by long wait times. However, they’ll almost certainly become more upset about inaccurate delivery timeframes. Being as honest as possible with them about when their goods will arrive will help set expectations and give them the information they need to decide whether to shop with you or elsewhere.
Consider How Automation Could Help
E-commerce sites and small businesses of all types often deal with sudden surges in customer demand. For example, these periods may happen around the holiday season or before kids go back to school.
Bringing automation into your facility could be a practical way to keep productivity levels high by supplementing human labor with smart machines. Automation doesn’t necessarily replace people. Instead, it often handles the repetitive parts of their work, freeing them up to do more enjoyable duties.
You may initially think automation equipment is financially out of reach for your company. However, some vendors offer the Machine-as-a-Service (MaaS) model. It allows clients to pay depending on use rather than budgeting for the total cost of machine ownership at once. Suppose a company has a packaging machine under a MaaS agreement and gets billed at a per-case rate. Then, it’s easier to calculate the estimated bills per month, making the expenses more manageable.
If you start using automation in your facility, keep in mind that it may take some time to work out all the initial challenges that often come with new processes. Getting feedback from your employees is an excellent way to determine what’s going well for them since the switch to automation and which aspects still pose some obstacles.
Think About Using Multiple Distribution Centers
Statistics show that 73% of people who shop online expect inexpensive, fast deliveries. Many decide not to order after all if the shipping costs too much or the merchandise won’t reach them as fast as they’d like. If you see that a substantial number of customers get deliveries sent to places far away from the single distribution center you use, think about operating multiple facilities.
The idea is that when the items originate closer to the people who buy them, they’ll reach consumers faster. However, there are other benefits to this approach, too.
One of them is that you’ll reduce risks stemming from natural disasters. Even if you start by having one East Coast distribution center and another facility on the West Coast, that strategy could pay off for helping you avoid weather events, whether hurricanes, wildfires, or other catastrophic issues.
Having multiple distribution points also allows keeping several inventories. That’s helpful when demand is high in one region but not as robust in another. Many customers who want an in-demand item would rather wait a little longer to get it from a distribution center that’s not as close to them than not receive it at all.
Implement Demand Planning When Possible
It’s not always possible to know what customers will want and when. However, your past sales data will more than likely reveal some valuable details that’ll help you anticipate their needs.
Perhaps your online store sells picture frames and artwork. Your database may show that products in the pop culture, celebrities and films categories sell especially well in July. That may be because college students are getting ready to return to campus and want to decorate their dorm rooms or apartments.
After you extract the sales data clues, use them to approach your suppliers and do what’s necessary to get those most-wanted products. If you order them at least a couple of months beforehand, the prices you pay will almost certainly be more reasonable than placing a rush order.
Even when using demand planning, you’ll deal with instances where people want sold-out items. In those cases, it’s still important to encourage them to purchase from you. One option for doing that is to give them an estimated in-stock date, ask for their emails and send them messages when the items are available again. A more immediate way to drive purchases is to show them products like what they initially wanted.
This approach won’t please everyone. However, it can help people realize you have other enticing items that might capture their attention, too. Plus, if you use data from people’s past purchases to show them products they might like, that strategy could cause them to spend more than originally planned.
Monitor Your Evolving Situation
Besides trying these actionable suggestions, it’s vital to keep a close eye on how things change with your operational logistics efforts. Some business owners notice emerging problems and wait weeks before dealing with them. They hope they’ll resolve without intervention. However, it’s usually better to act quickly to reduce the likelihood of things getting out of hand.
In addition to watching for changes and trends yourself, get input from employees who handle logistical needs. They may have noticed things that escaped your attention, plus have ideas for tackling the changing situation.
You can’t optimize logistics in a few weeks but sticking to that goal over the long term can help you see impressive results. Choosing metrics to track before moving forward with a new process is helpful in showing you what’s going well and where it’s necessary to adjust.