Ecommerce popularity is edging up every year. In 2018, it represented 14.3 % of retail sales, up from 11.6% two years earlier. When you tally retail sales growth in total, ecommerce commanded 51 percent of growth last year.
Our company works with a number of ecommerce distributors, so we have seen the effects of this growth firsthand. Largely as a result of the ecommerce boom, we’ve expanded the storage capacity of our distribution center and we’ve added more people in our distribution center.
Our distribution center, like hundreds around the country, is not just a place where customers store their goods. Our distribution center accepts shipments, stores products, tracks inventory, picks and packs orders and ships products for our clients.
If you have an ecommerce company, you should research distribution centers like ours. You might even want to take a tour to better understand how a distribution center could help your company navigate the supply chain and get products to customers quicker and more efficiently. You’ll learn that Amazon is not the only company that offers fast shipping, sophisticated inventory control and deep dives into customer buying habits.
Over the last six years, an increasing number of ecommerce distributors have come to us for help in fulfilling their orders and shipping their products.
Typically, their companies began small, with a promising product or products. The business was launched online and the company “headquarters” ended up in whatever space was available at the owner’s house.
Before long, sales shot up like a Saturn rocket and the staff found themselves buried in boxes, bubble wrap and shipping labels and on first-name basis with the UPS delivery driver and workers at their local post office.
As small ecommerce distribution companies grow, distribution becomes a distraction from important business considerations like sales and product development. It also becomes difficult to keep up with increasing orders and seasonal demand. Not being able to keep with distribution will eventually hamper growth and it could also damage customer relations.
The key is not to wait too late to turn to a third-party logistics partner to handle fulfillment. Here are some of the benefits small e commerce distributors reap from outsourcing distribution of their products.
Amazon, which dominates ecommerce, has set a high bar when it comes to distribution. Two-day delivery is an expectation.
One problem small online retailers face is the inability to keep up with orders when their business takes off. A third-party fulfillment partner is better able to handle upswings in business. For example, as our clients’ shipments have increased, we have grown our capacity to handle their needs by adding storage space and staff.
If you’ve tried to hire seasonal help recently, you understand the upside of working with a distribution center that can more easily scale up and down to meet its many customers’ distribution needs. The national unemployment rate was 3.8 percent in early 2019, which means there are few qualified applicants for the jobs available.
Many factors play into shipping costs, which is why it is wise to have an distribution center review the total picture. It’s also important to keep shipping costs low as more ecommerce distributors opt to not pass shipping costs on to their customers. A recent report from the National Retail Federation found that 75 percent of customers expected free delivery on every order, up from 68 percent the year before.
Distribution centers have systems in place so that orders are checked and rechecked before they are shipped. Auditing orders cuts down on returns and improves customer satisfaction. Using a fulfillment professional also helps an ecommerce company’s bottomline because a distribution center can buy shipping materials like boxes and protective packaging in bulk and do research to determine how products can be shipped so they won’t be damaged. Those measures reduce the number of returns and improve customer satisfaction. And, to ensure the returns are handled quickly and accurately, the distribution center can work with its ecommerce client on a procedure for handling returns.
When ecommerce entrepreneurs want to make their shipments stand out in some way, for example by adding a thank you note or a special coupon, a distribution center can easily add that to the packing process.
Sophisticated inventory management systems that distribution centers like ours use are a major benefit to ecommerce companies. Ours not only lets our staff to keep up with our clients’ orders and shipments, but it allows us to set up inventory alerts and reports for our clients. Our clients can also hop on the system themselves to check on their products and orders.
If your ecommerce distribution business is ready to look at a third-party professional to handle its fulfillment and shipping needs, give us a call.
Subscribe to our newsletter
Get all our latest content for Fulfillment delivered to your inbox each month.sign up
Get Started Here