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What is e-logistics? Benefits and Challenges

Ngoc Lee
What is e-logistics? Benefits and Challenges
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In the current digital age, buying and selling goods in cyberspace is not new to us. That opens up a vast business opportunity, and to be successful in this e-commerce field, you must have complete knowledge and optimal strategies. If you are looking for that then this article is for you. In this article, we will tell you what is E-logistics? its difficulties and challenges, and effective business strategies that you should refer to.

What is E-Logistics? Definition and specificities

You can understand E-logistics as the management of physical flows (goods) of an organization when they sell items on a digital website (e-commerce site, website, etc.). This requires setting up certain processes to optimize specific thread management. 

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What is a e-logistics
What is  e-logistics

Electronic logistics, although linked with conventional logistics, still has distinctive characteristics. This activity requires an e-commerce shipping service. 

Several reasons contribute to this:

  • In recent years, shopping over the internet has become more and more a new buying trend for people. According to FEVAD, internet purchases will increase by 32% by 2020. Having a dedicated logistics service for this sales channel has therefore become important for all businesses, not just e-commerce.
  • Internet shoppers are becoming more demanding and buying smarter. They can compare products on the e-commerce platform with just one click. Therefore, businesses that want to succeed in this market need high-quality products, good customer service, and especially fast delivery.
  • E-commerce withdrawal times are also significantly longer than traditional shopping. The customer may no longer be satisfied with the final product received. Therefore, implementing a return management policy for online sellers is very important.

What are the stakes for your online shop?

Delivery at the heart of customer satisfaction

According to a report from Fevad, more than 35% of customers with a bad delivery experience will never return to purchase from the same eCommerce site again. Therefore, it is important for e-sellers to be able to ensure perfect delivery service to their end recipients, and many activities can be taken to ensure complete consumer satisfaction. 

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Offer several delivery methods

Today, when the quality of goods is almost the same, customers increasingly expect faster shipping speeds. Therefore, delivery speed will be something that e-commerce businesses care about. In addition to these standard shipping offers, more and more e-commerce companies are opting for eco-delivery: a survey by Generix found that more than 87% of French customers would be interested in an alternative method. sustainable distribution. Therefore, customizing your supply chain by implementing bicycle or electric vehicle door-to-door delivery can be a great way to set yourself apart from the competition and ensure customer satisfaction.

Free delivery

Besides the speed of delivery, the shipping cost will also be something that customers care about when buying on e-commerce. It is proven by PayPal and ComScore reports that 43% of buyers in France would be willing to refuse a purchase if the shipping price is too high. So in order to boost sales, offering free shipping packages would be an effective strategy. However, you will need to balance profitability and cost structure when using this method, you should offer free shipping programs to customers on their next purchase to build loyalty in the future. a certain amount of time to attract new customers.

Delivery tracking

With the mentality of wanting to have the assurance of their goods being delivered to them, providing your customers with the ability to track their goods will benefit your business. It both helps create peace of mind for customers and their loyalty to the business. Not only that, the goods tracking system will save your staff time in customer service management. 

Delivery tracking
 Delivery tracking

Set up an effective returns management policy

Profit is considered the lifeblood of e-commerce. Fevad reports that the return rate in regular commerce is around 8%, while it is 25% in e-commerce. Those numbers confirm that profit is the most important issue in this sector. Especially now, when buyers have made more strict and difficult purchasing decisions. Rebound's report shows that 46% of people do not want to buy a product again from a website that causes them to have a bad buying experience.

The Issues and Constraints of Logistics E-commerce 

The e-commerce supply chain, like logistics management in general, must be managed and optimized throughout the process. Outsourcing is often an effective answer to that problem. Some suggestions that you should not ignore to be able to achieve the best business performance:

  • Price is an element that is of interest to consumers. To have a loyal customer base and attract new customers, having a competitive, affordable price is inevitable. If the price is too high, the buying rate will decrease, but if the price is too low, it will affect sales. Another factor that will greatly affect the price is the delivery fee. Too high a delivery price will result in a high payment, which is not attractive to customers.
  • Speed of delivery, a customer can completely pay more to have his or her order delivered instantly, express delivery. That proves you really have to have methods to optimize delivery time.
  • In the views of customers, the environmental approach has grown in importance. Going via a company that sends things in overly big packaging with all kinds of options and does not allow for returns will no longer be an issue. As a result, we have to reconsider the entire offer: shipping, packing, and returns.

Which e-logistics solution should you opt for

Having solved the above problems, the question now is how to increase profits by taking advantage of those problems. Choosing the right e-logistics solution for your needs will answer this question. There are several options for you to consider:

Internal management

The main benefit of this organizational style is that it allows you flexibility in the day-to-day management of logistics. These activities include order control, inventory control, and packaging. In addition, it also provides you with a reference of shipping providers giving you complete control and easy reproducibility. However, this method will be difficult and time-consuming if your inventory increases.

Dropshipping

If you want to completely reduce the burden of inventory management, dropshipping will be a great choice. With this form, a manager or supplier will manage all activities in your business: sourcing raw materials, purchasing goods, packaging products, delivering... This strategy is not highly binding, so this strategy will be more suitable for small businesses. However, this type of logistics will not provide you with complete information about product quality and delivery time. 

Dropshipping
 Dropshipping

Outsourcing to a logistics professional

To offload logistics-related problems, outsourcing logistics professionals to support is chosen by many business owners because of the efficiency it brings in revenue and quality of work. You can benefit from the extensive experience of the experts you hire in the logistics and e-commerce business. However, there are a few things you need to keep in mind when using this tactic such as hiring professionals that match your working style and the future direction of your business. 

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Conclusion

E-logistics is a great opportunity for businesses today, but also full of challenges and difficulties. Therefore, to be successful in this field, you must clearly understand what is e-logistics? and train yourself to have a good judgment and understanding of market trends. Try to learn, and cultivate knowledge to have reasonable business plans to increase profits and please customers. We hope you have a good time with Efex.

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Ngoc LeeNgoc Lee is an Content Creator Manager at EFEX. She wields her long-term expertise in Logistics and Supply Chain, harnessing her top-notch writing and research skills to bring incredibly valuable content. Whether you're a small startup or a well-established enterprise, Ngoc Lee is here to equip you with the essential knowledge of e-commerce, fulfillment, and all things business-related.