Does your Ecommerce Brand need a Logistics Company and How to select one?
If you are a newbie in the fashion e-commerce industry, you may be wondering how to fulfill your shipping, warehousing and fulfillment needs. Warehousing and distribution are very important aspects of your business and you must choose wisely.
- Using the services of a drop-shipper who will fulfill product orders for you.
- Fulfilling your own orders independently with the help of your staff.
- Using a logistics company who will manage shipment, warehousing, and fulfillment.
It is important to understand when your business requires a third party shipment or it can be done by you in-house. Let us help you decide which option out of the two you should opt for and why. We have stated the pros and cons of both below depending on the stage your ecommerce business is in.
When to choose a third party logistics company or drop-shipper:
Flexibility in leases and variable pricing: If your fashion ecommerce brand is new or is in the early stages of operation, you might not want to commit to owning or renting your own warehouse. You can pay a monthly fee for the amount of space you occupy when required in busy/peak seasons. Also if the number of orders you process changes frequently or you are in the kind of fashion business that has seasonal or unevenly distributed sales, it might be a good idea to hire a logistics company.
Outsource staff needs: Inventory management and shipping require specialized skills and experience. Instead of hiring staff, you can let the job be done by the logistics company’s staff who has been trained in it and has extensive experience. It is also a cheaper alternative in comparison to having someone on the payroll.
Concentrate on growth instead of packing boxes: The skills that you bring to the table may be design or business management. You might not know a thing about shipping or packaging, so if you leave that to the experts at the logistics company, you can concentrate on the growth of your brand. Also as your business grows, you might not have the time to concentrate on packaging and warehousing needs of your business
Save on costs: You can benefit from the efficiencies of logistics companies and leverage their buying power on packaging and shipping costs due to their large scales of operation. There might also come a point in your online ecommerce business where you might outgrow the infrastructure that you currently use. At a time like that switching to a good logistics company can help you not dampen your business’s growth.
There are ecommerce businesses who mustn’t use logistics companies, firstly the ones who are at a very early stage of operation and just don’t have the cash flows to afford it. Secondly, the businesses who have very specialized needs that a logistics company can’t manage. For example a very unique style of packaging or style of delivery.
The process and challenges:
The process is pretty straightforward the orders you receive through your ecommerce site will be sent directly to the logistics company and they’ll take over from there. The packaging and shipment of the order to your customer is not your hassle any longer.
The returns process will also be taken care of by most renowned logistics companies very smoothly, providing your customers with a flawless and convenient experience. If a good is returned due to certain damage it will be sent back to your company or if it is returned due to a sizing issue or change of mind, it will be put back into the inventory to be sold to someone else.
Choosing a logistics company from a pool of options:
- Try to find a logistics company that caters to the needs of fashion/retail industry specifically. They will have the systems in place that are required for your niche.
- Observe if the logistics company has clients similar to your e-commerce business. You can ask the logistics company for references of their current clients. Do not be afraid to dig deeper and ask lots of questions.
Deciding on which logistics company to use will require some level of research, be it on Google or by asking for a recommendation from your network. However, don’t base this decision solely on price. Asking for a competitive price is important but do not compromise on quality, as a less than qualified logistics company can hamper your brand’s image in the eyes of your customer.
Deepika is ILFR’s Marketing Expert and oversees various ILFR marketing functions, including Brand Positioning, Social Media, Influencer Marketing, and Content Marketing.
Deepika is ILFR’s Marketing Expert and oversees various marketing functions, including Brand Positioning, Social Media, Influencer Marketing, and Content Marketing.