Logistics in a Nutshell for Ecommerce Operations
Updated: Apr 22, 2022
The fluctuating states of the pandemic, coupled with the global supply chain crisis, have hit some businesses harder than others. With concerns like cross-border shipping bottlenecks and surging freight costs cropping up at the drop of a hat, the past year in logistics has revealed a multitude of opportunities for businesses to build more resilient fulfilment processes. Amid the unpredictability, some independent online sellers have managed to stay on top of things by improving their logistics capabilities to build brand loyalty and achieve high return purchase rates.
This begs the question, what makes the difference between zero and hero? We spoke with Cedric Soh, Vice President of Operations at Una Brands, and Jolene Ng, Regional Acquisitions Lead at Una Brands, to understand more about the logistical challenges faced by startups and SMEs in the APAC region and how to overcome them.
As a Seller, what are the key things I should note to enhance my logistics and distribution processes?
Demand Planning & Ensuring Sufficient Stock
Anticipating demand can help you ensure consistent stock levels, and enable you to maximise profits by ensuring all available demand is met. While running out of stock could seem like a happy problem, it can negatively affect customer satisfaction and your business in the long run. Customers might feel frustrated or annoyed by sellers whose items are consistently sold out, and consider switching to a new seller altogether. By maintaining inventory in the respective countries you are based in (main site of delivery and orders), you will be able to ensure quick deliveries to your customers.
Offering On-Demand Free Shipping
Believe it or not, free shipping might just be the factor that makes or breaks your sale. If you haven’t toyed with the idea of offering free shipping, findings show that it might be time to start.
84% of global survey respondents based their choices of online retailers on whether or not they offered free shipping. Separately, yet another 84% added an item to their cart to meet a minimum threshold price for free shipping.
On top of increasing basket sizes as people try to hit the minimum amount to obtain free shipping, free shipping goes a long way in making a seller or brand a consumer’s preferred choice. Despite most consumers expecting free shipping as a standard, online sellers have yet to catch up.
Protip: If it is challenging for you to offer free shipping, you can reward your customers in other ways and ultimately increase the average order volume. Offering discounts like dollars or a percentage off when buyers hit a certain basket size could incentivise them where free shipping is unavailable. Similar to obtaining free shipping, shoppers are motivated to increase their basket sizes to get rewarded with these coupons.
Diversify & Decentralise Warehousing
Having a third-party logistics (3PL) partner on-hand as a backup to prepare for contingencies could be the difference between delivery hiccups and a smooth fulfilment process. By leveraging the expertise of a 3PL partner, you will be able to improve efficiency while focusing on other aspects of your business.
Protip: Pick a partner who owns warehouses in the countries you expect your product to sell best in. This ensures the efficiency of your fulfilment process and gives you flexibility as partners can be engaged on a contractual basis to best suit your needs. Alternatively, choose logistics partners who decentralise warehousing through Offsite Consolidation Centres (OCCs) to keep last-mile fulfilment time and costs low.
How can Una Brands help?
As an ecommerce aggregator, our expertise in operations allows us to leverage some of the industry’s best practices.
With multiple brands in our portfolio, Una can turn Full Container Load (FCL) into a reality by consolidating our brands into central warehouses and optimising our shipments. Striving for FCL helps to lower the shipping cost per unit by consolidating voluminous shipments in one batch. This is a more strategic approach compared to Less than Container Load (LCL), especially in current business environments where freight can be volatile and unpredictable.
To top it all off, our Business Intelligence team works closely with our Strategy & Planning team to forecast demand, enabling us to find the perfect balance between costs and demand by determining the best quantity of each SKU to ship from each brand. The Growth team and a Brand Manager also guide your brand to ensure success in a highly competitive ecommerce space.
Strategic operations management is the foundation of keeping your customers happy - by ironing out the kinks in your shipping process and backend operations, you can protect your prices from freight cost volatility and meet demand reliably. Ultimately, this allows consumers to build trust in your online store as a brand that they can reliably return to time and time again.