Online Retail Logistics
The new frontier
Online Retail Logistics
eCommerce and online retail sales are growing at a rate of 20.7% for small and medium business and make up more than a third of all online sales. What is your strategy?
There is no doubt that a large part of the future of retail and business to business (B2B) supply chain will be online. The current online retail market is still only scratching the surface with an estimated 7% of retail sales delivered via the internet, but growing at a rate of 20.7% for SME (but only 13.5% p.a. for large corporates) compared to only 4.2% for conventional retail. Some retailers are combining eCommerce with conventional retail outlets with massive success (see Cell Bikes case study). Other companies are investing heavily into pureplay online retail and eCommerce start ups.
New supply chains are created for each eCommerce start up. This activity effectively transfers work out of the established supply chains of the major retailers into the hands of new eCommerce businesses with great ideas but often little logistics and warehouse experience.
Many will start in a garage or shed or the back of the retail shop, but quickly grow into a small warehouse and distribution operation requiring a business system with order and inventory management linked to their online business system. This was the exactly the story with Go-To Skincare. At some point in time the owner of the eCommerce business starts to recognise that they might not be managing their distribution as well as they should:
- they have growing customer complaints and declining service levels, or
- their margins are thin and their distribution costs too high, or
- capacity or inefficiencies are holding back their growth and they know they will need to invest to grow but are not sure what will deliver the results they need
At this point we recommend a short review to work out the best way to move forward.
The 10X Logistics Review –
Find out what you need to scale without stress
How would you like to find 10X more?
A review of your logistics will typically uncover at least 10X more value than the cost of the review.
There are two options at this point:
- Get some help and press on
This is where we come in. From our perspective, it’s almost always better to run your own distribution rather than to outsource it, so if you are considering this you should definitely call us before taking the leap.
Here are the quick rules to outsourcing your warehouse.
better to outsource
It is better to outsource your warehouse than to do it yourself badly.
Outsourcing your warehouse
Outsourcing your warehouse will almost always more expensive than doing it yourself well, so if margins are thin it may be better to do it yourself. If your business is complex with demanding customers you will also be better off doing it yourself. Doing your own warehousing will require some up front capital investment but you can go a long way with second hand racking and a used or hire forklift.
developing key supplier relationship
If you can afford it and don’t want the hassle or capital investment of running your own warehouse, and are prepared to put the work into finding the right logistics service provider, and then working at developing that key supplier relationship, then go ahead and outsource.
- Note that outsourcing your warehouse does not get rid of all your problems. Your logistics provider can only do so much for you, so you must still ensure that your stock is sent to them in an orderly manner, that your product database is up to date, and any system interactions or interfaces are reliable and error free. If your stock is a mess now then your logistics provider will charge you a premium to sort it out for you.
having full control over your own business
Nothing beats having full control over your own business critical processes, so if you regard control over your warehouse and order fulfillment as critical to your success, then you should manage your own warehouse.
If you just don’t know and want to talk it over, call us!
If you manage your own warehouse or want to insource your currently outsourced warehouse to reduce costs and get back control, then at Logistics Help:
guide you through the complexities
We can guide you through the complexities of developing a good warehouse layout, racking and materials handling equipment that is aligned with your business strategy and your stock and order profile.
help you choose and configure your business
We can help you choose and configure your business systems to get the best out of them and manage your labour force more productively.
reduce your headcount
Depending on how large you have grown we will also show you how to reduce your labour costs and reduce your headcount.
orders out on time
We can help you to get all your orders out on time, in full and accurate.
Warehouse Management System
If you’re ready we can help you implement a Warehouse Management System (WMS) to boost your productivity and accuracy. We can help you manage your freight and reduce freight costs.
inventory management, forecasting and planning
We can help you with your inventory management, forecasting and planning to make sure you have the right amount of stock to service your demand and keep your customers happy.
In short we will help you create the High Performance Logistics you need to grow your online business
New Book! Online Retail Logistics for Business Leaders
Coming soon in 2018
The reality is that you have not made a sale until your product is in the hands of your customer. Your business won’t thrive and grow unless you have high performance logistics operations that consistently deliver your promise to your customers.
In this book Andrew Clark – the founder of Logistics Help shares his invaluable experience in logistics for online retail. Find out more about the book and how you could contribute your story to help others.