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Logistics

What Is Logistics?

eCommerce logistics is the process of moving orders from fulfillment centers to the consumer’s physical address or preferred pickup point. Sometimes, this process can also include packaging, especially when suppliers don’t stock goods until the customer places an order.

Components Of eCommerce Logistics Supply Chain

Logistics management in eCommerce is a multi-step process that includes various elements, such as:

  • Order Receipt

The customer places an order online, which gets automatically transmitted to the fulfillment center or 3PL warehouse.

  • Order Packaging

The team at the warehouse packages the product with regard to the customer’s preference, such as size, color, or even number of items.

  • Order Dispatch

The order is dispatched to the consumer, usually through a carrier given that the fulfillment center will likely be within the customer’s proximity.

  • Fulfillment

The customer receives the order and confirms the delivery. They can either consume the product or return it if there are any defects. In that case, the logistics will still follow the same cycle, but now in reverse.

How Logistics Works In eCommerce

Logistics and warehousing are critical components of any eCommerce operation. Typically, a brand stores its inventory with a third party, normally a logistics service provider who owns various warehouses across the target market region.

A customer then places an order via the brand’s websites, where the business will share the same with its logistics partners. The service provider then packages the product before delivering it to the end-user. It’s worth noting that the logistics service provider is like an auxiliary partner in the supply chain. Their work is to fulfill the order only.

Vital eCommerce Logistics Capabilities

Whether your company chooses to outsource logistics services to a third party or work with an in-house time, it’s paramount that the strategy meets critical eCommerce logistics capabilities, such as:

  • Big data analytics for insights into marketing and consumer behavior;
  • Automation for a seamless customer experience in the supply chain;
  • Swift returns management;
  • Synchronization for multiple warehouses and fulfillment centers management;
  • Inventory localization to reduce shipping cycle and costs.

In-House VS Outsourced Logistics

As the name suggests, in-house logistics include using your branded delivery pipelines to get the product to the end-user.

On the other hand, outsourced logistics involves reaching out to a third-party logistics company to handle order fulfillment on your behalf. Many businesses go with the latter option as it enables them to serve wider geographical locations, including overseas at minimal costs.

 

 

RELATED TERMS

Frequently Asked Questions About Logistics

What is eCommerce order fulfillment?

This refers to the act of storing inventory, packaging products, and delivering them to the end-user after they place an order. It can either be in-house or through eCommerce logistics companies.

What are some eCommerce logistics companies?

There are thousands of eCommerce logistics companies across the globe, with the popular ones being:

What is eCommerce warehousing?

This involves storing products in a physical fulfillment center for sale by online retailers. The known types of fulfillment centers include private, public, cooperative, consolidated, bonded, government warehouses, etc.

What is reverse logistics?

Reverse logistics happens when a customer wants to return an order through the same delivery pipeline in the supply chain. This can be done by distribution partners if there are contract issues; if the goods require proper disposal, or if there is a need for repackaging for re-use, etc.

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