eCommerce logistics problems: the Elephant in the Room


Okay, here we are, running through the year 2022 full speed. And what have we learned by now? What did the previous two years teach us? Well, we’ve learned that we live in quite an unpredictable world, full of changes and that everything impacts our business. Those experiencing logistics problems know precisely what I’m talking about.

Statistics on eCommerce show that the numbers are declining for the first time in 9 years. Should that worry you? How to be prepared for the unpredictable future, and what changes can you make to secure your eCommerce business?

Oh, and yes, what are the biggest challenges in the logistics segment.

eCommerce logistics problems

Logistics problems: Keeping the pace

Don’t let your bad logistics experience turn into a bad customer experience in your eCommerce business.

If you have a bad reputation in the industry, it will spread like wildfire. Customers will leave reviews if they are unhappy with the service they received, and they will spread the word if they are happy.

Yes, yes, we all know the drill. But let’s be honest. It’s easier said than done.

If you need to export your goods abroad, or if your supplier is not near you, you have probably had some setbacks over the past two years because we’ve experienced a lot of stumbling blocks.

Remember the cargo ship stuck in the Suez canal? Yes, it’s just a little reminder of how things can go wrong. That accident totally messed up traffic and caused the supply chain crisis.

But that’s not the only thing that made everyone think twice about the efficiency of their supply chain. The problem is that keeping stocks in brick-and-mortar stores is a luxury for most eCommerce stores. And if we add to that customers’ expectation, where they expect to have a fast and seamless shopping experience, the red flag is up.

According to statistics, the estimated average annual cost to respondents’ organizations as a result of global supply chain disruptions in 2021, by region or country looks like the following:

Country/Region In millions of US dollars
The United States 228
Nordic countries 196
Global 184
The United Kingdom 146
DACH (Germany, Austria, Switzerland) 145

How to deal with this problem? How to decrease the chance of getting into the same situation again?

Simply by doing everything in your power to cover all parts of eCommerce logistics.

How to avoid logistics problems

The eCommerce logistics process encompasses:

  • manufacturing
  • labeling
  • storing
  • delivering a product to a customer

In order to run a successful eCommerce business, each of these phases needs to be covered entirely.

The best practice is to:

  1. Find an eCommerce logistics partner as soon as possible. Don’t forget that 3PLs (third-party logistics) will come in handy for short-distance distribution with lower costs. At the same time, for the long-distance delivery, it might be more valuable and practical to use a larger logistics company.
  2. Include extra services – that will add value to the product, such as special packaging, custom messages, etc.
  3. Include free shipping – it can decide whether your customer will buy your product or not.
  4. Delivery as fast as possible – In the future, the price will not be the only determinator when purchasing. You need to know that, according to statistics, customers are willing to pay 2.2% to 5% more for fast delivery.
  5. Automate whatever you can – Automation can save time and lower the chances of making mistakes. You can automate your ordering, marketing, shipping, and sales processes.
  6. Pay special attention to order accuracy – Making a mistake in the ordering process can have multiple adverse effects. You can have a negative review, you will 100% lose that customer, and you will have additional costs.
  7. Synchronize all your sales channels and inventory – You eliminate the possibility of selling out of stocks by synchronizing your sales channels and your inventory. For example, you can sell on Etsy, Shopify, and your website, and all channels get updated whenever you sell a product.
  8. Synchronize your warehouses – If you use several warehouses, you need a system that connects them. All of your warehouses need to be synced. So that you know where you have products and how many in every moment. Yes, it’s all related to the inventory.
  9. Cut the costs by regionalizing inventory – Having your products stored on a regional level lowers the shipping costs. You will be able to distribute your products to the customers quickly.
  10. Plan X, Y, Z – What’s your backup plan? If you don’t have it, you’re in trouble. World trade has become almost unpredictable. It is not wise not to have an additional supplier, or partner, to enable your business to flow smoothly regardless of the situation and avoid logistics problems.

So, what can you do to overcome the world economy’s challenges to your business? How to deal with the shift from globalization to regionalization as an emerging trend that recently everyone is aware of?

Diversify your supply chain. You don’t need to cut off every supplier, logistic center, or manufacturer on another continent. But make sure to provide a parallel regional supply chain.

That way, even if your globalized supply chain breaks, or experiences setbacks, your business won’t crash. Look at it as your safety net.

Will it increase the costs initially? Yes. Will it provide your business safety in turbulent times – Yes!

And to run this double supply chain system, you need to automate your logistics.

Logistic automation

The logistics and distribution sector includes many sub-sectors, including transportation, warehousing, retail distribution, and other activities that support the movement of goods from the point of origin to the point of consumption.

The sector’s efforts to become more efficient and less costly have led to the automation of many activities and tasks. Electronic data interchange, for example, is a standard method for transferring information and documents between companies, and the use of digital signatures and encryption has made it easier to protect data.

It’s much easier today to automate the logistic processes than it was 10 years ago, and you don’t need to double-check or waste your time on manual input. Everything is done automatically.

Thanks to iPaas solutions, such as SyncSpider, you can connect and sync any app, tool, platform, or marketplace you use and synchronize your business without worrying about making mistakes or hiring an additional workforce.

Logistics regionalization

Logistics plays a vital role in the functioning of an eCommerce business. In order to keep this running smoothly, you need to be prepared for changes and challenges.

Before 2020, the global supply chains were scattered worldwide, and when the transportation issue emerged, we all found out how fragile these supply chains were.

And though this system was functioning perfectly when everything ran smoothly, with low costs and efficiency, the moment we stumbled on the obstacle, we paid double the mistake of not having a backup plan.

How does logistics regionalization fit in it? Well, regionalization is a beneficial way for supply chains to utilize their existing networks of manufacturers by separating them into smaller sites.

Though initially, it might seem a more expensive solution, in the long run, it helps you bring products home to your customers while cutting costs and improving performance. And on top of all, you will have less chance of being stuck if something unexpected occurs.

When an organization breaks down a complex supply chain into smaller regional locations, it can easily streamline processes.

The eCommerce predictions

If we look at the eCommerce predictions, we can see that most eCommerce experts talk about AI, AR, virtual reality, mobile-friendly design, and the importance of the supply chain.

But things get even more complicated these days. Shipping prices are jumping sky-high, and it’s easily disrupted by various external factors which we cannot influence.

A few years back, the distance between you and your supplier was not a factor that could disable your functioning, whether retail or manufacturing. But today, we see adverse effects of these business partnerships due to lengthy and costly shipping.

Conclusion

Do you know what the secret is to successful businesses? They are always one step ahead; they always see what will happen in the near or far future. And that’s not their psychic gift; it’s more talent for gathering information and logical conclusions.

Don’t worry, eCommerce is here to stay, but it will transform, especially in a supply chain segment. In order to overcome eventual logistics problems, we will all need to diversify our supply chains and provide a regional backup.

Kristina Radosavljević

Kristina Radosavljević

Content writer at SyncSpider

Kristina is a content writer with more than 15 years of working experience in various industries.

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