Without a strategy for attack, no army should go into battle; likewise, no e-commerce business should begin operations without a plan in place to manage their logistics.
Logistics planning, while not the most exciting aspect of running an ecommerce business (nor how you imagined you’d be spending your time once you opened), is nevertheless critical to its success.
You make more of the “unknown” quantities in your logistics known — and with fewer unknowns, you can optimize your business operations and strengthen them against future crises — by taking the time to plan your supply chain, consider the elements of logistical processes, evaluate resources, and budget your expenditures.
Businesses that don’t have logistics planning face expensive surprises, inefficiencies, and the inability to expand their business effectively — especially during tough times.
Our team will look at what logistics planning is, why it’s critical for e-commerce, suggestions on how to optimize your logistics plan, and how a 3PL like Launch Fulfillment may help businesses develop through managing all internal and external logistics operations in this post.
What is logistics planning, and what does it involve?
It is a type of logistics management in which a firm’s owner plots out how to deliver the proper product to the right consumer at the perfect time and for the best price. The objective of logistics planning is to establish a lean and cost-effective logistics operation capable of delivering service levels at all times while also tolerating supply chain disruptions.
While the process for each company may appear somewhat different, it generally entails considering logistics systems (such as procurement, production, and delivery), as well as all of the logistical functions linked with each system, including warehousing, fulfillment, returns processing, raw material handling, and inventory management. The director of logistics is generally in charge of the planning procedure, though other important stakeholders may have a say.
These systems and processes are assessed for cost, optimized for efficiency, and adapted to meet unanticipated circumstances during logistics planning.
Why is it necessary for ecommerce firms to conduct logistics planning?
Both the safety and success of your company are dependent on effective logistics planning.
It, like any other planning or fallback plan, can assist your business avoid unanticipated issues. Logistics preparation, on the other hand, may help your company’s day-to-day operations and set you up for success in the near as well as long term.
Here are four of the most important advantages of ecommerce logistics planning.
1. Make a plan for attaining long-term objectives.
You may not be thinking too far into the future when you first start an ecommerce business — after all, just getting your brand off the ground is a full-time job in and of itself. However, once you’ve established yourself, logistics planning can ensure that your company can expand and survive.
Logistics planning necessitates considering your company’s goals in both the near and long terms. To make sound logistics decisions, you’ll first need to create objectives for how you’d like to expand in the future.
You’ll need to figure out how you’ll continue to satisfy your consumers’ demands while lowering costs in order to meet those goals and make money. It’s nearly impossible to do so without first developing logistics procedures such as storage, transportation, and fulfillment.
Having a solid logistics operation plan keeps you on track, on time, and in line with customer expectations, allowing you to focus your efforts toward your near-term objectives.
Those short-term objectives can help you reach long-term goals in the future. By establishing a resilient supply chain now, you’ll be less concerned about unusual circumstances or unforeseen challenges derailing your company later on.
2. Reduce supply chain costs
It’s simple for ecommerce firms to go over budget when it comes to delivery. When you’re busy, everything else goes out the window; this is especially true during the holidays, when even a small blunder might be magnified owing to the influx of customers.
You won’t be tempted to panic and choose a more expensive option for the sake of convenience if you have a logistics strategy in place. Rather, with time and planning, you may research the most cost-effective supply chain options while also taking into account hidden logistics expenses (such as labor, warehouse insurance, and equipment).
These companies provide services such as managing the fulfillment process, inventory management, order management, and transportation. As expert logisticians, they have learned how to run logistics operations more quickly and inexpensively than most ecommerce firms can do on their own — but as your partner, they will save you time and money.
With clear, transparent pricing for each service, a 3PL should also make logistics planning easier. Launch Fulfillment’s basic DTC fulfillment pricing structure is as follows:
Customers can easily understand what they will pay for ecommerce fulfillment since we’ve used this structure. To assist you keep your costs down and plan your logistics, we provide free standard packaging, data and analytics, as well as our best-in-class software.
3. Meet customer demand more quickly
Well-planned logistics systems are streamlined supply chains. Your company will always be in a position to meet client demand swiftly if you carefully maintain inventory levels, optimize processes, and obtain quick delivery possibilities.
Partnering with a 3PL reduces the burden on the business owner because it allows them to meet customer demand more quickly. Launch Fulfillment, for example, uses its logistics knowledge and resources to satisfy its end clients quickly and cost-effectively.
- When Steve Staffan, the founder of men’s fashion company Brummell: When a 3PL provides services to your business that would otherwise need to be supplied by another type of contractor, you can save time, money and frustration.
4. Increase revenue
The higher revenue that results from the other advantages of logistics planning is only natural, but it is also an important incentive to plan logistics on its own.
If you’ve stayed on course and cut supply chain expenses, you’ll almost certainly see monetary benefits from it.
Similarly, fulfilling customer expectations increases client satisfaction and loyalty, boosts the likelihood of repeat purchases, and frequently results in greater sales.
Finally, quickly meeting those needs through rapid delivery lowers your cart abandonment rate and improves your AOV, resulting in more profitable transactions.
If you want to grow your business, you must increase income over time, so it’s critical that you plan ahead to make the most of each transaction.