Did you know that U.S. companies spend over 20% of a product’s cost on supply chain expenses? That number has been on the rise in recent years, too, as ecommerce fulfillment becomes increasingly complex.
It’s no secret that ecommerce fulfillment can be a logistical nightmare. With products coming in from all over the world, it can be difficult to keep track of everything. It’s even harder to ensure that it arrives at the customer’s doorstep on time and in perfect condition.
Unfortunately, many businesses are struggling with skyrocketing logistics costs. This blog post will discuss five ways you can reduce your ecommerce fulfillment costs and improve your supply chain operations.
1. Automate Your Fulfilment Processes
Automating your order fulfillment can eliminate most of the costly mistakes made during manual processing. For example, cosmetics fulfillment order systems can help you keep track of inventory levels in real-time and take care of packaging and shipping as well. This way, you can avoid overstocking or being caught off guard by a sudden surge in demand.
For example, automated order fulfillment systems can help you keep track of inventory levels in real-time. This way, you can avoid overstocking or being caught off guard by a sudden surge in demand.
Other common mistakes of manual processes include:
- Shipping to the wrong address
- Incorrectly calculating shipping charges
- Forgetting to apply for discounts or promotions
- Not properly documenting special orders and instructions
- Incorrect inventory levels
Each of these mistakes can have a major impact on your business in terms of cost and customer satisfaction. Automating your fulfillment process can help you avoid these mistakes by providing real-time visibility into your inventory levels and order status.
The software will also allow you to automate your transportation management. This can help you reduce your shipping costs. By using an advanced transportation management system (TMS), you can optimize your shipments based on cost, transit time, and other factors.
2. Use a Third-Party Logistics Provider (or “Fulfillment Center”)
If you’re not ready to automate your ecommerce fulfillment process, another option is to outsource it to 3PL fulfillment services or fulfillment centers.
A fulfillment center is a type of warehouse specializing in storing and shipping ecommerce orders. These facilities are designed to handle the unique challenges of ecommerce fulfillment.
Some of these challenges include managing returns and processing large volumes of orders quickly and efficiently. Fulfillment centers can help you reduce logistics costs by giving you access to their state-of-the-art facilities and transportation management systems.
In addition, many fulfillment centers offer value-added services such as product customization, kitting, and assembly. They may also have e-commerce subscription fulfillment services to help you manage and grow your subscription business.
These services can help you save time and money by reducing the need for manual labor.
3. Reduce Your Shipping Costs
For most ecommerce businesses, transportation and logistics costs are a big part of your operating expenses. And if you’re not careful, these costs can quickly eat into your profits.
But by optimizing shipping costs, you can reduce these costs and improve your bottom line. But how can you reduce your shipping costs? To do this, you can:
- Weigh the packages and decrease the dimensions
- Reduce your shipping distance
- Negotiate for discounted shipping charges
- Find discounted suppliers
- Check out offers from the marketplaces and platforms you’re selling on
- Insure the package with a third-party company
Shipping charges can quickly add up. But by following the above tips, you can reduce these costs and improve your bottom line.
4. Order Consolidation
You can use order consolidation to ship multiple orders in one shipment. This can save you money on transportation and packaging costs. To do this, you should take the following steps:
- Gather all the orders that are going to the same address
- Put them into one box or package
- Ship them out together
This can be a great way to save money. However, t’s important to ensure you’re not sacrificing customer service in the process. Hence, you need to be careful not to over-promise on delivery times.
If you’re not careful, order consolidation can lead to longer shipping times, which can frustrate your customers. So, make sure you’re clear about the expected delivery time when using this method.
5. Improve Your Packaging
If you’re not careful, your packaging can add unnecessary costs to your shipping. This is because transportation companies will charge you based on the size and weight of your packages.
So, if you can reduce the size and weight of your packages, you can save a lot of money on shipping. You can do this by:
- Use lighter packaging materials
- Eliminate unnecessary packaging
- Pack items tightly together
- Use the right size box
Following these tips can optimize your packaging and reduce your shipping costs.
Additionally, your choice of packaging could cost you a lot of money through product damage. Therefore, you need to ensure that your packaging is adequate for the product you’re selling.
6. Strategize Your Order Returns
Order returns can eat into your profits and ruin your reputation as a merchant. This is especially true if you don’t manage returns properly. If you’re not strategic about your order returns, you could end up spending more on transportation costs and reverse logistics than you need to.
One way to cut costs is to use a fulfillment service that offers returns management.
A good fulfillment service will have a transportation network in place that can minimize the cost of returns. They will also have a system for managing returns so that you can track your return rate and take corrective action if necessary.
7. Invest in Workforce Training
Employee training is one of the most neglected aspects of any ecommerce business. However, it’s also one of the most important.
Your employees are the ones who will be handling your products and dealing with your customers. If they’re not properly trained, it could cost you a lot of money in the form of mistakes and errors.
Investing in workforce training will ensure that your employees are properly trained and equipped to deal with the challenges of ecommerce.
Improve Your Ecommerce Fulfillment by Reducing Logistic Costs
By following the above tips, you can reduce your logistics costs and improve your bottom line. However, it’s important to remember that shipping is just one part of your ecommerce fulfillment process. There are other areas where you can cut costs and improve your efficiency.
To learn more about how to optimize your business, check out other posts on our site for more informative tips.
