The 5 must-have elements of e-commerce logistics

Inventory management is crucial to maintaining solid order fulfillment in real time. Most e-commerce platforms have built-in inventory management tools that allow businesses to track stock levels, monitor sales trends, and set reorder points. Identifying product and demand cycles enables e-commerce retailers to balance new-product ordering or manufacturing with customer needs. Accurate inventory data allows retailers to avoid stockouts and continue meeting customer expectations.

1. Package management

The most significant and often most complex aspect of any e-commerce business is managing the large number of packages being shipped, tracked and delivered on time. This is where the rubber hits the road (forgive the obvious pun) because choosing the right shipping partner and delivery method is the difference between losing business or building high levels of customer satisfaction.

Different carriers offer different shipping options, such as ground, air, small package, less than truckload (LTL), express shipping, final-mile services and more.

Businesses must consider the cost, speed and reliability when deciding which carrier and which service to use.

2. Returns management

Efficient handling of returns is one of the most challenging areas of any e-commerce business. With online shopping, customers can’t physically touch or inspect products before buying, heightening the risk of product returns. The customers are also all in different places. There is no central location for pickups. Thus, e-commerce retailers must rely on carriers with a network of drop points that make returns easier for customers.

There must also be a sophisticated tracking system that can handle millions of data points to ensure the returns are received and credited to the correct account.

3. Software and automation

Technology plays a significant role in e-commerce logistics as many businesses use software and automation tools to manage their logistics operations. This goes well beyond robots pulling products or automated conveyor systems in warehouses. For many e-commerce businesses, products must be staged throughout their network to lower delivery times, increase efficiency and reduce labor costs.

Companies use multiple carriers or third-party logistics providers to manage freight moves between facilities and in the final mile as a product gets to the customer’s door. Coordinating all efforts requires a cohesive platform that takes data from a wide variety of inputs and distributes that information to a large team of stakeholders.

4. Freedom of choice

True customer satisfaction comes from having choices. In the e-commerce world, this means customers must have multiple delivery options, including same-day and next-day services. This requires businesses to have a well-organized logistics network to process and deliver orders quickly. It also means the shipping leaders must have access to a large number of providers because it’s not enough to simply have capacity. In today’s e-commerce world, it must also be the right kind of capacity.

5. Supply-chain management

Rock solid supply-chain management practices are the heart and soul of e-commerce logistics. Businesses must work with suppliers to ensure products are available when needed and delivered as promised. For many e-commerce businesses, their supply chain is an international one. Companies are bringing products or materials in from Asia or Central America, with outbound shipping needs that span the globe. The number of handoffs in the shipping cycle requires a high level of expertise and, often, a variety of specialized logistics professionals.

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