How To Improve Your Distribution Logistics
From the manufacturing of a product, all the way to a customer purchasing the product and receiving their order, distribution logistics are key part of the ecommerce supply chain. When it comes to an online retail business, as there is no store front, quick and accurate distribution of a business’s products, is a key aspect to the ecommerce business model.
There are a number of aspects along the distribution chain, and whilst it is important having great distribution, it is equally important to maintain a profit and keep costs relatively low. In order to keep costs as efficient as possible, an ecommerce business will need to obtain the correct balance between having enough stock to meet customer demand, to avoid losses in sales, and not having excess stock to optimise storage in order to keep costs low.
Distribution logistics for direct-to-consumer businesses and brands, is the full process of moving the finished product from the supplier or manufacturer directly to the retailer or distribution centres, like UK Fulfilment, where the fulfilment process operates.
From the fulfilment centre, orders are picked and packed for delivery to the customer. Online brands and fulfilment centres then work with various courier providers like Royal Mail, DPD, UK Mail etc, to ensure deliveries are delivered on time and at the most affordable rate.
Ecommerce Distribution Logistics
Indirect distribution allows direct-to-consumer brands to have elasticity to outsource their fulfilment to a third-party logistics or fulfilment provider, such as UK Fulfilment. Indirect distribution involves shipping your stock to a fulfilment provider, who will provide storage and warehousing, picking, and packing, as well as courier shipment to the customer for the ecommerce brand or business.
A fulfilment centre can offer various resources to a client, but all fulfilment centres differ on their capabilities. Fulfilment centres, like UK Fulfilment, offer various resources along with fulfilment, from their experience and expertise to customer support to ensure your operations and deliveries run smooth and on time. Using a fulfilment centre will also eradicate the need invest in infrastructure and warehouse management systems for your own ecommerce business, which will help in reducing costs. With UK Fulfilment’s WMS, StoreFeeder, you can connect a variety of your sales channels, from marketplaces like Amazon, Etsy and Ebay, and your website platforms like Shopify, to UK Fulfilment’s software. You will be able to have complete transparency of your orders in one dashboard.
Direct distribution basically entails the owner of the goods handling the distribution management in-house and cutting out the ‘middle-men’. Once the inventory has been assembled, it is directly shipped to the online retailer, who fulfil and dispatch orders from their establishment, be it a warehouse, office, or home.
In order to maintain a seamless fulfilment process in-house, online brands and retailers will need and have to invest in their own warehouse and inventory management software in order to track their stock levels and which orders have been fulfilled. In direct distribution the online retailer will also have to set up their own shipping methods and strategy. This will require setting up relationships with the correct couriers for their business model, so that profit margins can be kept high with shipping costs kept low without compromising on the quality of the shipment service.
How to Improve your Distribution Logistics
Use a Fulfilment and Third-Party Logistics Partner (3PL)
Using a fulfilment centre or 3PL, like UK Fulfilment, is the best option to improve an online retailer’s distribution, whilst also alleviating the time taken for the business to fulfil and manage their orders. Fulfilment partners, like UK Fulfilment, do not solely handle an online retailer’s fulfilment, but also handle their warehousing and distribution, which enables them to efficiently manage an online retailer’s inventory whilst vastly improving their fulfilment service and keeping costs low. From storage to shipping costs, fulfilment centre’s keep operation costs low through economies of scale. Most online retail business will have high overheads if they have to rent their own storage or warehouse space, as well as employing staff to manage the space. Utilising a 3PL, like UK Fulfilment, you will only pay for the space you use, keeping costs as efficient as possible for your business.
Demand forecasting is vital in order to make the correct decisions, on not only obtaining accurate levels of inventory in which to order, but also how to handle distribution needs of your orders as well. Having the correct formula in place to forecast inventory, which uses the history of past orders and the even the data of number orders in that specific date in previous years. Having enriched data, can assist you in optimising your decisions in a number of areas, from improving your inventory management, to when to have a sale which ultimately can help keep your storage costs efficient whilst giving your customer’s a positive experience.
Utilise Warehouse & Inventory Management Technology
Having and utilising the correct technology for your supply chain in today’s world is imperative to helping your business operate a smooth-running supply chain. Technology can help improve many varying aspects of an online retail business from tracking stock levels, to managing orders and fulfilment, as well as assisting in shipment supervision. Having an effective warehouse and inventory management system in place is important in maintaining an efficient supply chain to ultimately keep your customers happy, and keeping your sales flowing.