Distribution logistics is a key aspect for many business operations especially those that run eCommerce businesses and sell via virtual shopfronts.
What is distribution logistics?
Distribution logistics (also known as sales or transport logistics) is the movement of goods between the source of production and the customer.
Distribution logistics encompasses inventory, warehouse, supplier, vendor relationship and logistics management. For fast moving eCommerce businesses, having the right partner in distribution logistics can significantly boost your business success.
For many eCommerce retailers, distribution logistics plays a fundamental part in scaling their operations to previously unachievable levels of growth.
How can I use distribution logistics to improve my business?
There are many ways that logistics can improve your business. Here are a few key strategies:
Speed of delivery
One of the most obvious benefits is increased speed of goods to market. By using third-party logistics companies, you can get stock moving through your supply chain faster than if you had to manually handle this process yourself. Once customers place an online order, they eagerly wait and anticipate its coming delivery. Successful eCommerce businesses know that speed of delivery can make or break the customer buying experience. If you get this wrong, it can damage your brand and give rise to dissatisfied customers and poor reviews. However, when executed properly, the customer buying process becomes seamless and enables you to focus on other aspects of your business. By shifting goods from the producer to the consumer faster, you can also reduce the chances of damage, spoilage, theft, and obsolescence.
Efficient and accurate order fulfilment
By having a dedicated logistics team managing your stock, you can successfully fulfill customer orders more efficiently and deliver the right item to the right customer on time. By outsourcing your order picking and packing, you are boosting the efficiency of your business by decreasing the amount of time each product must be handled between producer and consumer. Efficient order fulfilment means moving stock from manufacturer to consumer with less friction.
Reliability of service
Smart business owners acknowledge that they cannot be everywhere at once. If you are reliant on yourself or your own team to fulfill all orders, then issues can arise during holiday periods or when people need to take sick leave. By outsourcing this valuable task to an external distribution logistics provider, you can ensure that orders are fulfilled consistently and with more reliability. Distribution logistics companies are also well staffed to handle the ups and downs of consumer demands. If you have an exceptionally large order to fulfill that would usually be problematic to tackle on your own, chances are the 3pl logistics company could hire additional contractors if and where needed.
Adaptability to disruption
The ability to be adaptable is one key aspect of scaling a profitable business. By working with a third-party logistics company, you are in a better position to make rapid changes to your supply chain depending on market changes or product innovations from competitors. Once you have seen an innovation that you would like to implement, it can be far easier to integrate this into an existing inventory management system (IMS) rather than changing your entire manual process, only to test a new initiative. A professional logistics provider will work with you to adapt your supply chain to align with the new demand.
Increased profits usually come from one of four areas: reduced freight costs, reduced labour costs, increased efficiency or improved supply chain. Securing the right distribution logistics provider is essential to achieving greater profits for your business. Boosting sales is an important aspect of growth. However, identifying ways to reduce your costs using real-time data is one of the best ways to improve your bottom line. Regular reviews of your logistics data can often yield new ideas and ways to innovate through your existing customer base or entering new markets.
Imagine that you have just received an order for 500 units but are currently away on holidays and simply cannot manage to fulfil this demand straight away. This is a common scenario for eCommerce business owners, especially those who have not properly delegated their distribution to a 3pl logistics company. Now imagine the same scenario where you are away on a holiday and there is an order of 500 units but since you have partnered with a 3pl specialist, you can simply relax durinf your holiday. The sale took place without your direct involvement, massively reducing your stress levels and allowing you to enjoy your personal time.
We have covered several key benefits of using distribution logistics for your business. To sum up, these advantages include speed of delivery, efficient and accurate order fulfilment, reliability of service, adaptability to disruption, greater profits, and less stress.
If you are currently looking for an eCommerce 3pl specialist, contact Invenco today so we can help you come up with an effective distribution logistics strategy for your business.