It takes more than a good idea for an e-commerce start-up to be successful long term. High-priority logistics issues – or rather, issues that should be a high priority – crop up faster than you can say “fulfillment.” Neglecting them can interfere with your business’s growth. DB Schenker hopes to prevent this with its Vertical Market Start-up project. As head of the project, I advise e-commerce start-ups and help them put their logistics on strong, and flexible, footing. In this blog post, I’m sharing a few of my logistics tips for online sellers.
Logistics tip 1: know your sales markets
More than 500 million people – or, to put it a better way, potential customers – live in the European Union’s free trade area. Many e-commerce start-ups forget about that fact when writing their business plans. Instead, German start-ups often only think of their own country as their sales market.
This is a mistake. Not only are these companies forgetting about the potential of an enormous target group; they’re also giving up the opportunity to align their logistics with the larger market from the very beginning. Who says that distribution centers need to be located in your own country? I advised a Danish e-commerce start-up to address the German market from the very beginning. Its logistics center could soon be in Nuremberg, the heart of the EU’s free trade area.
That doesn’t mean that the fledgling company should try to enter all EU countries right away, but this step creates the necessary flexibility to expand sometime in the future, for example to Austria.
Logistics tip 2: think about your target groups and sales channels from the very beginning
Most e-commerce start-ups think only about B2C business. They want to be able to sell their products directly to customers through their webshop. By choosing this approach, they’re actually throwing away opportunities. Instead, it is worth thinking about whether their excellent product could be sold to other outlets and through multiple channels.
This is exactly the scenario I experienced with an energy drink company. The company wanted to sell B2C through its own online shop. But it quickly realized that supermarkets were interested in its drink, too. The problem was that neither the company’s replenishment nor its logistics were designed for larger volumes.
That’s why I recommend that e-commerce start-ups plan for every eventuality from the very beginning:
- Be generous when planning production resources to be able to handle additional orders.
- Hire an external logistics services provider that has the capacity to respond with flexibility to new channels and target groups, both in terms of warehousing and delivering products to end or business customers.
Logistics tip 3: coordinate promotions with your logistics specialist
You may be considering offering your product at a sale or special low price. But as a young e-commerce start-up, you don’t yet know how your target group will respond – or what the sale may mean for your logistics specialist. If it’s a hit, what starts out as a good thing may lead to unsatisfied customers if logistics bottlenecks occur, which can easily happen if you don’t coordinate with your provider.
That’s why it’s always necessary to consult with your logistics services provider in advance. Ideally, they will advise you based on their experience with other clients. But at the very least, they can increase warehouse capacity and staffing. This is essential, especially if they handle value added services such as picking and outer packaging for your company.
Logistics tip 4: ask your logistics services provider how it can relieve some of the pressure on your e-commerce start-up
The right logistics services provider can help your e-commerce start-up with any number of tasks, for example with replenishment. As “warehouse manager,” they can keep an eye on stock and re-order as soon as it falls below a specified minimum.
In addition to this fundamental task, they can also help speed up the fulfillment process – if you establish good communication practices. That’s why I recommend the companies I advise to set up an interface between their online shop and logistics provider. Orders that are received are immediately forwarded to the logistics company, which can then respond right away and send the merchandise without having to consult the company. This becomes even more important the faster customers expect to receive their order. And customers have higher and higher expectations, particularly when it comes to delivery and faster processing. They increasingly expect same-day delivery.
“ #Fulfillment, #SalesChannels, #SalesMarkets – valuable logistics tips for your #e-commerce #start-up“Tweet WhatsApp
The right logistics partner can also handle product and customer analysis work for you. As the recipient of returns, they are the first to know when the same three out of ten products get sent back, for example. It can collect data like this and make it available to your e-commerce start-up, ideally prepared in a clear format.
By handling logistics tasks for you, your logistics specialist can free up you and your e-commerce start-up to concentrate on your core tasks, such as finding new investors and sales markets and optimizing your shop.
Key Account Manager Vertical Market Start-Ups