The Ecommerce & Supply Chain giants like Amazon, Alibaba & Jingdong are currently investing more in logistics rather than advertising for faster Order fulfillment and Customer Satisfaction.
Scale your eCommerce business with Logistics in 2021
In the past two years, the digital growth of eCommerce or online selling platforms has fast-forwarded their growth performance to +40% compared to 2019. Due to the pandemic and frequent lockdowns, people have started to adopt the modern way of purchasing. As per the recent survey, 60% of people around the world have made a habit of purchasing online for the last two years. The e-commerce and supply chain giants like Amazon, Alibaba, and Jingdong are currently investing more in logistics rather than advertising for faster order fulfillment and customer satisfaction.
What is Logistics?
Logistics is the flow of resources or products from the point of origin to the point of destination. It includes various processes from the time a consumer places the order to the delivery of the order at the consumer’s location. with packing, generating invoices, shipping labels, shipment and collecting payment, etc. Logistics has seen a megalomaniac growth in recent years, as there is a frequent rise in product consumption by consumers and product sellers.
Before getting into the detailed topic about e-commerce logistics, you have to understand first how e-commerce order fulfillment varies according to consumers.
Types of Ecommerce Order Fulfilment
Ecommerce order fulfillment is categorized into three types:
- Business to Business (B2B)
- Business to Consumer(B2C)
- Consumer to Consumer(C2C)
Business to Business (B2B) -
Business to Business is otherwise known as wholesale selling or selling from one business to another. Companies like Amazon and Alibaba own a separate platform to supply businesses with necessary products ranging from raw materials to industrial tools.
Business to Consumer(B2C) -
Ecommerce platforms that sell their products directly to consumers, through Shopify or similar web platforms in business to consumers.
Consumer to Consumer(C2C)-
When you’re intending to sell your used cushion or cupboard or any used material that still can be useful to someone is called consumer to consumer. Ecommerce businesses like eBay or Craigslist are consumer-to-consumer platforms.
After knowing your targeted audience is either B2B or B2C or C2C. You can optimize your e-commerce logistics for faster order fulfillment and customer satisfaction.
Types of Ecommerce Logistics
Ecommerce is one of the reasons why logistics has seen immense growth in the economy and jobs.
After you’ve built an online shop and made it into an e-commerce startup business, you should know which logistic model to choose. It might sound complicated but it’s not.
- You can sell a third party manufactured product in your brand name
- You can purchase and sell others product
- You can be the middlemen between manufacturer and consumer
- You can give your product for rent to your consumer
There are more technical terms to the above-mentioned logistics for e-commerce, which is differentiated into four categories:
- Private Labeling Model
- Wholesaling or Retailing Model
- Dropshipping Model
- Subscription Model
Private Labeling Model -
Private Labeling Model is nothing but purchasing from a manufacturer, who is new into the market with a quality product seeking an audience. Many international companies use this private labeling model to purchase products from those new manufacturers, ranging from daily home essentials to clothes. And sell them under their brand to a targeted audience.
With this model, you can control the workflow of order fulfillment. Once you receive your order in an e-commerce store, you can make the manufacturer use your label and send the delivery to your customer or you can buy from the manufacturer, add your label and send it to your customer.
This model helps in both retail and wholesale selling within the country. And when it comes to selling outside the country, make sure the selling cost covers all delivery costs including export and import taxes.
Wholesaling or Retailing Model -
Purchasing products from a manufacturer in bulk at less cost and selling them to consumers at a good price. Some businesses stock up their inventory for Season sales before Christmas, use order management integrations for easier order fulfillment.
Once you receive your order online, let the delivery company know or use shipping integration to generate automatic invoices and pickup from the delivery company.
Dropshipping Model is the easiest logistics model, you need not worry about product inventory or product delivery. All you’ve to do is find the customer for a certain product. It’s more like a mediator between the company and the customer.
But it has a complicated problem, you don’t have control over the workflow of order fulfillment or inventory stocking. Dropshipping is all about marketing and working with the right company to sell their product.
If you’re good at marketing or even understand what your people need, you can do dropshipping. It has a lesser margin but good growth. In recent years dropshipping suppliers have been increasing worldwide with ease of finding a market for other countries’ products.
Subscription Model -
The subscription model is a growing platform, where you get to give your product for rent to your customers. IKEA and other modular kitchen designers are currently following the subscription model, to make their products available for the people who really can’t purchase them.
This model has both benefits and complications, it’s one of the reasons why few companies opted in for the subscription model.
With eCommerce order fulfillment and eCommerce logistics model, you can get an idea of how to sell online and who your targeted audiences are.
Ecommerce has changed the course of lifestyle during this pandemic, from self-shopping to online shopping. Starting your online shop at this time can give you the necessary boost.
Tips and Tricks for Ecommerce Logistics
- If you’ve come across corporate eCommerce platforms like Amazon, you can see they have separate e-commerce platforms for each country. They don’t sell products manufactured from a first-world country to a third-world country. Instead, they follow the opposite, logic of dropshipping. But they do export products from the United States to India by collecting all the necessary charges for reaching the consumer.
- To gain leverage with your logistics model, use google trends and google search console. To get better clarity about where your customers are.
- Free shipping has been a sales-driving word for eCommerce platforms. Before launching a free shipping sale, do calculate the charge of shipping and check how it will affect your profit.
- Good product description, If you don’t have a good product description for your product. There is only a 10% chance that people might even click the purchase button for ordering. Use storytelling to keep your viewers engaged in your page and give them a reason, how your product can benefit them. Use a conversational tone and make them feel you care for them.
For Example : There are key terms in writing descriptions.
If I am searching for a beard grooming kit, I look for certain key terms in product descriptions like “ skin allergic, rashes, smooth, hard, softer “. These key terms make a person click the purchase button based on different products, think like a customer and write what the customer is searching for.
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