Ecommerce Logistics: Simplified Definition

Ecommerce logistics or e-logistics is basically the process of delivering the product from the online marketplace or store to the customer. It also involves setting up specific systematic processes to ensure that the package goes smoothly from one stage to another before reaching the customer’s doorstep.

Ecommerce Logistics: Technical Definition

ClickPost defines ecommerce logistics as the processes or activities associated with transporting, storing, packaging and shipping inventory from the manufacturer to the online store or marketplace and then ultimately to the customer, it also includes other activities like order processing, labelling, packaging along with inventory management and supply chain management.  

How does ecommerce logistics work?

Ecommerce logistics is the various processes involved in the delivery mechanism like Inventory management, packaging, labelling, billing, warehousing, shipping, payment collection, return and exchange. Ecommerce logistics is all these processes put together and accomplished smoothly and efficiently. The main purpose of logistics is to deliver parcels faster, safer, and more accurately. The ecommerce logistics functions in two directions:

Forward direction- packaging, and shipping orders from the online retailer’s warehouse to the customer’s doorstep.

Reverse direction- Picking up orders from the customers to exchange or replace in case of defective, damaged or wrong orders. 

Why is ecommerce logistics necessary?

The goal of ecommerce logistics is to maximize the profits of an ecommerce business by optimizing the supply chain and improving customer satisfaction. Ecommerce logistics helps ecommerce businesses in the following ways:

Faster shipping capabilities- Ecommerce logistics help online retailers establish a logistics network that is needed to distribute inventory throughout their area of operation so that they can ship orders from warehouses closest to the customer and get their product delivered faster.

Performance reports and insights- Ecommerce logistics provide online businesses performance reports and distribution metrics to enable them to monitor, optimize and control their inventory and supply chain. This in turn gives valuable insight into the shipping performance and where it could be improved. 

Better reverse logistics- Ecommerce logistics helps online businesses to process and manage returns. It makes reverse logistics simple and cost-effective and helps the business to exchange or replace the returned product back into the inventory.

Scalability- Ecommerce logistics helps in optimizing the complete delivery mechanisms enabling online businesses to fulfil more orders and scale their operation faster and more efficiently.  

What are the processes involved in ecommerce logistics?

Ecommerce logistics have certain processes that are required to be followed so that it functions in a smooth and efficient manner. These processes are:

Inventory and warehousing- Inventory management and warehousing is an important part of ecommerce logistics as it ensures that the products are available and ready to be shipped as soon as an order is placed. This helps to save time and costs when it comes to shipping orders and also helps you keep track of your stock in real-time. 

Manifestation and pick-up- The process of order creation for shipping is called manifestation. It includes entering order details, printing shipping labels, and packaging before sending it for delivery. The last stage is assigning the order to be picked up by the carrier.

Transportation- After the order has been picked up by the designated carrier, it has to be safely transported to the final destination. Transportation also includes in-transit storage to store products in-between transportation between different hubs. 

Last-mile delivery and delivery exception- Last-mile delivery is the last part of the shipping process. It includes picking up the product from the nearest hub and delivering it to the customer. Another important thing involved in the shipping process is to manage delivery exceptions like delivery delays, transportations issues, and other shipping related problems. This can be managed by real-time tracking to keep customers updated.

Returns management- Reverse logistics is one of the most important parts of the logistics process, as it helps the business to reduce and manage product returns. In case the customer initiates a product return, ecommerce logistics help to pick up the product, process them for defects or damages and then transport them back to the warehouse to stock them as inventory.

What are the challenges of ecommerce logistics?

Some of the challenges of ecommerce logistics are:

  • High delivery or shipment charges

  • Tracking orders online

  • Managing returns

  • Delays in order processing

  • Errors in inventory management

  • A sudden surge in order volume

  • Cross border shipping

How is ecommerce logistics different from brick and mortar logistics? 

Ecommerce logistics and Brick and Mortar logistics are very different from each other. The function and mode of operation also vary. Ecommerce logistics focuses on transporting the products from the retailer’s warehouse to the customer, whereas brick and mortar logistics focuses on transporting products to the retailers. 

 

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