What is logistics for eCommerce?
eCommerce logistics is an intricate process that involves several steps. Online retailers use eCommerce logistics to ensure that online orders can be processed and delivered accurately and efficiently across the world, and to guarantee that products are always available to meet demand.
The steps and processes involved in eCommerce logistics include:
- Inventory management
- Order processing
- Warehousing
- Picking and packing
- Shipping
- Reverse logistics
In this article, we’re going to take a look at each of the key steps involved in logistics for eCommerce, and explore how they come together to create an efficient process for both businesses and customers.
In this article
Logistics for eCommerce explained
Inventory management
Before looking at the journey of an order through the eCommerce logistics process, it’s important to understand the role that inventory management plays in the eCommerce supply chain.
For eCommerce businesses, inventory management involves ordering, storing, and using the right amount of inventory at the right time. It’s important for online retailers to have as close to the optimal amount of inventory on-hand as possible.
Having too little inventory could result in stockouts, while having too much could result in unnecessary storage costs or an inefficient fulfilment process.
Ultimately, implementing inventory management best practices is essential for running a smooth and efficient eCommerce logistics operation.
Warehousing
In eCommerce logistics warehouses are facilities where items are stored to await fulfilment. Traditionally, warehouses served as storage facilities for retailers’ inventory, bridging the gap between the manufacturing process and the products’ availability on the shop floor.
While they still perform that function for traditional brick and mortar stores, many warehouses now operate as fulfilment centres. The difference is that orders are sent directly from the fulfilment centre to the end customer, rather than to a retailer.
Warehouses and fulfilment centres are an essential part of eCommerce logistics because they enable the entirety of a retailer’s stock to be kept in one place, resulting in greater supply chain efficiency.
Order processing
Order processing begins when a customer makes an order through your online store. The action triggers the order processing system, and the details are automatically transferred to the fulfilment centre’s Warehouse Management System (WMS).
Once the WMS has confirmed that the items in the order are available to be fulfilled, the order fulfilment process can begin.
Thanks to modern integration technologies, order processing is automatic and instantaneous, allowing orders to be fulfilled much quicker than before.
Picking and packing
Once an order has been confirmed and validated by the Warehouse Management System, the order can be prepared for shipping via the picking and packing process.
First, an order must be picked. A picker will be notified that an order has been placed, and the WMS will direct them to the location of the products that are part of the order. Often, the picker will have multiple orders to pick before handing their trolley over to the packers. By picking multiple orders on one route, dispatch times are reduced significantly.
Once an order has been picked, it is then handed over to the packer. The packer will select the most cost-effective packaging option for the order. In some cases, the online retailer will have custom packaging and so that will be used as a default.
Depending on the order being packed, the packer may need to insert dunnage such as crinkle paper or compressed air bags to ensure the items are not damaged in transit. Once the order has been carefully packed, it is then labelled for carrier collection and placed into the dispatch area.
Shipping
During the final stages of the packing process, the packer will label the order for dispatch. This label contains all the information required for the carrier to transport the order to the final destination.
The label contains personal information such as name and address, as well as carrier information such as the service provider, selected shipping service, and a barcode. This barcode facilitates the carrier’s billing process and enables the updating of tracking information.
A carrier will collect the order from the fulfilment centre or warehouse, and from here the last-mile delivery process begins. Depending on where the order is being shipped to, it will be transported to one or more of the carrier’s transportation hubs en route to the end customer.
Reverse logistics
Reverse logistics is the process of the end customer returning an order to the online retailer, usually to the fulfilment centre operating on their behalf. Customers return products for all sorts of reasons; perhaps the wrong order arrived or wasn’t as described, or perhaps it arrived too late. Sometimes, customers simply change their minds.
To instigate the reverse logistics process, the customer needs to notify the eCommerce brand that they’d like to return to the product, who will usually approve or decline based on their shipping policy.
If a returns request is approved, the customer will print off a label (or this might be supplied by the retailer), and return the order to the fulfilment centre. There, the return will be processed and dealt with. Depending on the reason for return or the nature of the product, returned items will normally be put back into storage for resale, recycled, sent to landfill, or destroyed.
Improve your eCommerce logistics with James and James Fulfilment
Here at James and James, we can take care of the complex world of eCommerce logistics for you.
With industry-leading fulfilment services, a global network of fulfilment centres, and award-winning inventory management tools, we’ll ensure your orders go out correctly, on time, every time.
All while empowering you to make informed business decisions with real-time inventory and sales data at your fingertips.
To learn more about how we can help, don’t hesitate to give us a call on +44 (0)333 200 9958, or fill in our online contact form.
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