[NB] 6 common logistics challenges for online retailers

… and how you can solve them!

Being responsible for the transport and logistics of an online store isn’t always easy. When you have to keep track of everything from inventory and purchasing management to routing and transporting goods from the warehouse, you can quickly lose track of countless details. These details can have a huge impact on both the customer experience in your online store and your store’s profitability, so there’s a lot to be gained from managing logistics well.

Here’s an overview of 6 common logistics challenges in e-commerce, along with some tips on how to overcome them.

1. Optimise your warehouse to handle orders better

One important measure is to manage the incoming goods from your suppliers. This allows you to reduce overstock or reverse stock shortages.

However, it’s also important to keep track of your inventory so you can keep an eye on what is and isn’t available. This availability plays a crucial role in the experience you offer your customers, who must not be disappointed when it comes to delivery times.

Your task is therefore to put in place a sensible supply strategy and organise your warehouse so that you can manage your inventory in the best possible way.

Solutions to implement

Choose a storage method that suits your business.

• The FIFO (first in, first out) method, where you store products that have been in stock for a long time as close to the packing area as possible, is ideal for perishable products.
• The LIFO (last in, first out) method (the opposite of FIFO) gives you easy access to the latest products.
• The ABC method allows you to optimise space according to product turnover – products that are ordered most often are closest to the pickers.

Implement a labelling method in your warehouse that clearly identifies each zone. For example, if you have chosen the ABC method, you can define zones A, B and C in your warehouse or label shelves according to the different product types they contain.

Equip yourself with a Warehouse Management System (WMS) to manage your stock and inventory. This is a software that allows you to track the receipt and issue of stock, so you always have a 360° view of what’s happening in your store.

2. Speed up order preparation

You know it well: Your customers expect ever faster and more efficient logistics, and fast delivery is a must for many customers. What’s more, you face competing e-commerce platforms that are increasingly introducing minimum delivery times, such as delivery within 24 or 48 hours.

From your side, as an online retailer, this requires not only choosing carriers that respect these kinds of deadlines, but also optimising your order picking to allow you to package your products quickly and efficiently.

Solutions to implement

Optimise the order handling area and especially the packing station. This will increase your packing speed, but also make the station more ergonomic to reduce the strain on your warehouse staff. Make sure you choose your table carefully (it needs to be as ergonomic as possible) and place the most commonly used tools within easy reach of your employees.

Read our guide to the packing station here

Choose time-saving packaging. Packaging such as automatic bottom boxes (which are assembled automatically by pressing the sides) or packaging with integrated protection can help you save precious seconds when packing.

Install packaging machines such as paper or air cushion machines. If you regularly use filler material in your shipments, these machines will increase packing speed and ensure your products are protected. You can also opt for strapping machines to speed up this stage of packing.

3. Provide a differentiating customer experience

To beat your competitors and retain customers, you need to work on the customer experience around your brand. Logistics is also important for your brand! As an online store, this obviously means offering your customers a seamless ecommerce experience.

Solutions to implement

Choose a carrier with a focus on customer experience. Firstly, you need to be able to offer your customers a range of shipping options. For home delivery, the carrier must provide real flexibility to your customers and offer optimal tracking of your shipments.

Plan well how your customers will unpack your products. Choose packaging that makes it easier to open your parcels. For example, you can choose boxes with an adhesive strip instead of tape. If you use packaging fillers and protection, you should also think about how it looks – for example, choose tissue paper in a colour that matches your brand. You should also think about how the packing slip looks, and consider adding little surprises to the packs to achieve that coveted ‘wow’ effect.

Customise your packaging – or create it to your specifications. In particular, you can highlight the brand colours on the packaging itself (outside or inside) or, as mentioned, on the package fill. You can also include a slogan, a current promotion or a QR code to continue the customer experience online.

4. Manage order journeys efficiently

Returns are also part of logistics, and the way you manage returns can be a real selling point for your potential customers. Customers want to be sure they’re ordering the right product and can return it if necessary.

Managing returns can be a difficult task for online stores. You need to regularly update stock levels and ensure that products are returned in optimal condition.

Solutions to implement

Provide good information in the online store about the rules that apply to returns. Communicate this on a separate page, but also on your sales pages. Make the return policy as clear as possible, including deadlines for when products must be returned and the possible costs. If possible, offer free returns.

Choose packaging for the return. These are specially designed to protect your items both during initial shipping and returns. They also have a double adhesive strip so the customer can reuse them directly without having to look for other packaging.

5. Get control of logistics costs

Regardless of the size of your online store, controlling logistics costs is crucial to profitability. Every element of logistics costs can be optimised in some way.

Solutions to implement

Reduce the weight and volume of express and international shipments. Most carriers charge fees for these types of deliveries based on the volumetric weight of the shipments. So take the time to eliminate empty space in your boxes by choosing packaging that is as true to size as possible.

To learn more, check out our article on volume weight here.

Conduct regular tenders to find the right carrier at the right price.

These tenders will help you find suppliers that match your and your customers’ expectations, and will also help you minimise your budget.

If necessary, consider using an e-commerce platform for logistics. You might consider this logistics outsourcing solution if you need to handle urgent parcels, deal with seasonal peaks or want to focus solely on your core business. Some platforms may offer shared shipping costs, allowing you to ship your products at a lower cost.

6. Implement environmentally responsible logistics for your online store

Consumers are increasingly inclined to opt out of brands that have environmentally unfriendly practices. Conversely, they remain loyal to brands that communicate their environmental and social commitments – and above all, stick to them.

You may already be working on the environmental responsibility of your products. But have you considered the important role logistics plays in this green picture?

Solutions to implement

Choose environmentally responsible packaging for your online store.

We recommend you take a look at RAJA’s 5 packaging principles. Here you can find inspiration for finding packaging that is better for the environment.

The 5 packaging principles are to:

• Reduce: You can reduce the consumption of packaging by keeping the weight and volume of packaging to the minimum necessary to provide good product protection. For example, you can use packaging with integrated protection, such as padded paper envelopes.
• Reuse: RAJA offers several types of packaging that are designed to be easily reused. Examples are returnable packaging, reusable plastic pallets or stackable plastic boxes instead of cardboard boxes for storage.
• Replace: To protect the environment, we need to replace packaging that is non-recyclable or has a high environmental impact with environmentally responsible alternatives. There are many innovative new products to choose from, such as paper bubble wrap or something as simple as paper packing tape.
• Innovate: Using bio-based packaging made from renewable natural materials helps to reduce our impact on the environment.
• Recycle: To move towards a circular economy that minimises waste and makes the most of resources, we need to develop our recycling to give packaging a second life. Here, RAJA can offer a wide range of packaging made from recycled materials, such as e-commerce bags made from recycled plastic.

If you incorporate all these best practices, you’re ready to implement more profitable, efficient and responsible logistics in your online store.