The UK is a global centre for e-commerce, with the industry standing tall at a value of over £2 billion in February of 2022. There has never been a better time to start a business in this still-emerging industry – but there are numerous challenges for new business owners to overcome. Logistics is one of these challenges, and arguably the most important; here are some key things to know about e-commerce logistics as a start-up.
Demand Planning
One of the core tenets to running a successful e-commerce business is ‘demand planning’, which is a specific form of analysis that can help you understand the shifting demands of your core audience. Demand planning examines demand over time, and forecasts demand for specific products at certain times of year.
Demand planning can be applied to your manufacture or wholesale process, giving you key insights into when to invest in more product, or when to rely on your existing inventory. In this way, you can keep a steady balance between reliance on your inventory and investment in it.
Free Shipping and the ‘Last Mile’
As an e-commerce business, the overwhelming majority of business you do with consumers will be via your online sites and portals. Every product you sell will need to be delivered to the consumer’s doorstep – making delivery a fundamental consideration for your business.
Free shipping has become something of a standard for many online outlets. The shipping part is the inconvenience, where purchasing online is a sheer convenience; reducing the footprint of the delivery on the sale of the product itself serves to centre the product for the consumer, improving their experience. This is a direct result of the ‘last mile’ phenomenon. The ‘last mile’ of any product’s trip to the consumer is of key importance to your business, and can be a costly part of the equation as a result.
Simply put, the last mile is the last leg of the product’s journey, from depot or warehouse to front door via next-day delivery or courier service. The customer’s impression of this last mile is the only physical impression they will have of your business’ customer service, even though the delivery services you use are unaffiliated with your business. As such, getting the balance between affordability and quality of service is key to getting repeat custom.
Decentralised Warehousing
But what of the warehouses from which your products are shipping? While you may have a central distribution centre, to which all finished products arrive and from which all products are sent to customers, it’s worth considering the role that decentralised warehousing could have in your business’ long-term success.
Decentralised warehousing serves to split your distribution centre up into a network, with hubs close to different urban centres in the UK or even internationally. These decentralised locations make it easier to ship your products to consumers, reducing the number of legs to any one product’s journey.
