What All New Ecommerce Business Owners Need to Know about Logistics
By Dan Radak
To someone who has never run an ecommerce business, it may seem that all it takes are some good products and a website that will attract customers and help them convert. And while the products and the website are both essential parts of ecommerce, there is another factor that decides how successful or unsuccessful an online store is going to be – logistics.
Logistics is often neglected when people start thinking about going into ecommerce and they only later find out that shipping, storing, dealing with returns and other logistics-related processes can be superbly difficult to take care of.
Today, we will be taking a look into all the things new ecommerce business owners need to understand about the complex issue of logistics.
You Have to Pack It
If you thought logistics as a whole is overlooked, then the fact that you have to do packaging does not even register. In reality, you do. You have to put your product in a package that will get your product safe to the customer.
It seems like a simple enough thing to do, right? You put your product in a box and that’s that, right?
Well, there are dozens of types of boxes, both when it comes to sizes, shapes and features such as insulation or hazmat protection. Then there is the option to go with alternatives packaging options such as coffee bags which can be a game-changer in case your product cannot really break.
Of course, you need to keep your costs in mind, both when it comes to purchasing boxes and when it comes to shipping (bigger equals more expensive). If you sell products of different sizes, this means finding the right size boxes for each and figuring out how many of each to purchase.
It is not exactly rocket science, but it is something you have to think about.
Who Pays for It
Pretty much every marketing-oriented ecommerce article (especially those on cart abandonment) will tell you that offering free shipping is a must.
The only problem is that there is no such thing like free shipping.
Instead, it comes down to who pays for it. If you really offer free shipping, no strings attached, you are paying for it. And you will feel it when the time comes to review your revenue, there is no doubt about that.
Of course, you can offset this by increasing the prices, but your customers may not like this. You can also offset it so that both you and your customers pay for it (through a moderate price increase).
A great way to handle this is to let your customers see how much shipping really costs and to choose the carrier themselves (federal postal service, UPS, FedEx). This shows them that shipping is simply a cost that cannot be avoided and it also tells them that you are not adding to the prices of your products on account of shipping.
It comes down to some fine balancing and tuning and you need to start thinking about this sooner than later.
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