Contract logistics

How Contract Logistics Help You Meet the Challenges of Ecommerce

There’s just about only one thing that matches the explosive growth of ecommerce and that is the increasingly high expectations of its customers. While not too long ago three-day delivery was the norm and there was the expectation of paying delivery charges, today customers want to be able to pick up orders within the hour or have them delivered this afternoon. And if you want to send your customers to the competition as fast as possible, just tell them that there’ll be a shipping charge.

It’s no wonder that the major ecommerce players, like Amazon and Google (yes, Google) are dumping buckets of cash into building more and larger distribution centres to warehouse products closer to customers, and developing ever faster means of delivery, from driverless vehicles to drones.

But where does that leave small to medium-sized ecommerce companies? They have built their businesses around developing and marketing a unique product or service. That’s their core competency; it’s what they do best.

Without the seemingly bottomless pockets of Google and Amazon, ecommerce companies risk taking focus and resources away from what makes them successful if they choose to develop and manage their own warehousing, distribution centres and last-mile delivery.

Contract Logistics to the Rescue

Fortunately, there’s an option to instantly put in place the warehousing space, order fulfillment solutions and distribution channels for ecommerce businesses of all sizes.

Unfortunately, too many ecommerce companies look at contract logistics as an added cost. In fact, all the benefits of contract logistics are designed to reduce costs. If they didn’t, ecommerce companies would have no reason to choose them.

Here are five ways that contract logistics either increase revenue or decrease costs in ways that many ecommerce businesses don’t consider:

1. Immediate Expertise

Warehousing is far more than the place and space to receive, store and ship your products. Contract logistics providers are experts in their field who not only provide a service, but who can actually introduce efficiencies in all aspects of what they do, specifically for your business.

2. A Single Line Item

If you kept all the services you get from a third-party logistics company in-house, you’d need to manage a number of different departments and disciplines. When you outsource those logistics, suddenly they all become one, easier to manage function.

3. Fully Scalable

Especially when an ecommerce business is growing, logistics requirements can change quickly. During growth spurts, your company needs to scramble to find space, transportation and storage in short order. During lulls, you’ll need to carry the overhead of unused capacity. Contract logistics let your business breathe easier by expanding and contracting to meet its needs.

4. Reduced Risk

If during that mad scramble to meet a rush of orders you happened to miss a delivery, or you had an unsatisfied customer, the incident could become a viral nightmare when all of the customer’s followers find out about it on social media. Contract logistics not only eliminates that risk, but it can include customer services, like managing all aspects of product returns, needed to keep them loyal.

5. Always Current

Logistics are the business of third-party providers. They inherently keep up-to-date on innovations, technological advancement and new procedures. They have the resources to invest in those innovations that help your business benefit from more options and efficiencies to improve your bottom line.

If you still think of contract logistics as being a cost and not an opportunity, you owe it to yourself to at least learn more about all the ways they can optimize your business, reduce costs and increase revenue. Give us a call here at Pival, we’ll be happy to answer your questions.