• 05 Jul 2017 4:17 AM | Anonymous

    E-commerce business has seen a tremendous success since its advent in the retail sector. The share of online sales compared to in-store sales has been continuously on the rise. However, the success of this ever-growing segment also demands a strategic and well-integrated supply chain process in place. Here are ten supply chain strategies that e-commerce businesses can consider:

    1. It is important to determine and forecast the size of your business because it will have a direct impact on your inventory management. Depending on the size of your business and current manpower and resources, decide whether you would want to outsource it to a supply chain management company or manage it internally. This will prevent you from order fulfilment snags in the future.

    2. Being in the e-commerce business you will have to source the products you would want to sell. For this, attending relevant trade exhibitions and contacting trade organisations pertaining to your line of business would turn out beneficial. As trade organisations also look forward to connecting manufacturers and retailers, this turns out to be a win-win for both of you.

    3. You should keep local retailers on your radar of thought. They might not have the bandwidth to sell their products outside local market but may be willing to partner with someone who could help them with sales elsewhere.

    4. Sourcing your products directly from the manufacturers certainly has its benefits. However, most manufacturers would opt to deal with wholesalers than small retailers because they want to sell large quantities of their product. At the same time, if a manufacturer is willing to work directly with you, it is most likely that their scale of production is too less to catch the attention of wholesale distributors. The risk here is they might not be able to keep up with your demand, at all times. Hence, depending on your projection of sales, make your decision on whether you should source from manufacturers or from wholesalers.

    5. The basic expectation of online customers is the speed of delivery i.e. it should be fast. This indicates that e-commerce businesses must consider having multiple distribution points to meet and improve delivery times.

    6. Both inbound and outbound freight are cost-incurring factors. Hence, opting for local vendors close to your distribution centres and being closer to the customer by having multiple distribution centres can lead to inbound-outbound freight savings.

    7. Labour is one of the highest cost incurring variables in the supply chain processes. Having multiple distribution centres will allow you to split the labour pool. Also, the tendency of attrition is lesser when you source labour locally.

    8. E-commerce business is here to stay and it is being proved with increasing transactions each day. This growing popularity means that you must be equipped to deliver products to every corner of your operational base i.e. ensure a good and practical last-mile delivery approach too.

    9. As important is the on-time delivery of a product, so is the return management too. The increase in the direct-to-customer base is an indication that your business is being accepted and appreciated. To maintain the tandem you must be equipped to handle processing of returned products due to damage, wrong order, order cancellation after the order has been dispatched etc.

    10. It is advisable for e-commerce businesses to build and capitalise on the synergy of multi-channel retailers and distribution system and drop shipping. This will open up channels of business and meet customer expectations too.

    The above-mentioned was an overview of the strategies that you must consider for starting and sustaining your e-commerce business. Well, of course, much depends on your plan and forecast, budget, size, and the stage of your business.

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