Must-Know best practices in Ecommerce Logistics Planning

⏱ It will take you only 13 min to read this post

✨ Post actualizado el 04/10/2023 por David Costarrosa

Best practices in Ecommerce logistics planning

If there is something undeniable throughout the growth of ecommerce in general, it’s the development and professionalization of the logistics process.

Even just a few years ago, it was normal to have to wait 15-20 days to receive an order placed on an online store. 

However, this trend has been changing over time. 

One of the major contributors to this has been Amazon and its Amazon Prime program, established in 2005, but with a significant boom between 2017 and 2018, just as this Backlinko.com article explains and illustrates.

That’s why if you have an online store, and given this highly competitive and professionalized scenario, you cannot neglect something as important as logistics planning.

In this article, we will teach you the different logistics models that ecommerce utilizes and how important it is to have a strategic plan with the sole objective of being able to meet the demands of a user that is increasingly accustomed to making online transactions.

Ecommerce logistics models

When discussing logistics models for ecommerce, we must focus on 3 fundamental types: internal logistics (in-house logistics), external logistics (3PL or third-party logistics), and dropshipping

Each of them represents different responsibilities for a company’s internal organization and, for this reason, we will explain how they work so that you can decide which one best suits your business dynamic.

In-house Logistics3PL or Third-party LogisticsDropshipping
What is it?Internal logistics is developed entirely by the company and without the participation of an external company that carries out the storage of the stock or the control of the shipment of the packages.Third-party logistics is carried out by an external company which is, at the same time, in charge of managing the stock and coordinating with the transport company during the entire process of sending the package to the customer.Dropshipping is a logistics and business model in which, as a seller, you do not have access to stock or logistics control, but rather a supplier or third party who holds all the stock and is also responsible for shipping each package to customers.
Advantages

  1. One of the most substantial advantages of this type of logistics is the total control over everything that happens in the logistics process.

  2. In addition, you will also have stock storage, so you can know exactly what merchandise you have without depending on someone else.

  3. This, at the same time, will allow you to offer a personalized experience when it comes to packaging, shipping times and other additional services.

  4. Consequently, you will have a higher degree of autonomy and you will depend only on the transport company that delivers the package to the customer's home.


  1. One of the most important advantages is the professionalization of logistics.

  2. These types of companies specialize in stock management and package shipping handling, so you will save a lot of time as well as additional infrastructure and logistics costs.

  3. This will allow you to be able to scale your store much faster since you will have extra time to put your energy solely into growing your business.


  1. One of the most important advantages is that the economic barrier to entry will be very low, since you will not need to make an initial investment in merchandise but will use the supplier's own stock to start selling.

  2. In general, companies that offer this type of service tend to have a broad product catalog, which can also be an important point when making the decision to invest in this type of logistics.

  3. The scalability of this business model can be higher since, as mentioned above, they are usually suppliers with a large flow of merchandise and with a high probability of being able to handle many daily orders.

Disadvantages

  1. One of the big disadvantages of this type of logistics is all the additional costs involved in carrying out such a process unilaterally.
  2. In principle, you will need not only human resources, but also packaging materials, tracking software and technology for packaging the packages.

  3. Another important point is the complexity of stock management, a sensitive area that requires expertise in order to manage stock in a coordinated manner so as not to break stock at the most important sales moment of the year.

  4. Finally, we have to consider that the growth of the company must be coordinated with logistical growth, since the most important point is to be able to meet the demands of buyers when packages start arriving late or not at all.

  5. This could mean more investments in infrastructure and specialized personnel in the area.


  1. In terms of disadvantages, the most significant is the loss of control of both the stock and the logistics process.

  2. This point is non-negotiable since this is precisely what this logistics service is all about.

  3. In addition, you will become dependent on that company and will have to adapt to its shipping policies, which often do not coincide with what you could do if you had control of your stock.

  4. For example, companies usually have a work schedule, so if you wanted to speed up the assembly of packages overnight during Q4, you would not be able to do so.

  5. Another negative aspect is the inability to customize each package or to add anything extra inside them, except for when you have a specific agreement with the logistics company in place.


  1. One of the most significant disadvantages is that you have no control over anything and, moreover, you do not know in what condition the item is shipped to the customer.

  2. Another con is that it is usually a low profit margin model, since it is the supplier who takes all the investment risks.

  3. In addition, if you want to start this type of model with Chinese suppliers, you will have to face high shipping times, language barriers as well as culture and concept shock regarding customer service in general.

When to chooseThis type of logistics is often used by new companies or small entrepreneurs who are taking their first steps and learning about everything related to their business and their online store.This process is essential for companies that already have experience and a significant flow of sales and that are looking to make a quality leap to a higher level to offer their customers professionalism and speed in the shipment of packages.Dropshipping is ideal for entrepreneurs who are looking for extra income or are taking their first steps in the world of ecommerce and online stores.

Best practices in ecommerce logistics planning

Thorough logistics strategy planning

As this article from the Getcircuit.com blog nicely summarizes, a comprehensive logistics strategy will help your company stay competitive and continuously improve customer service.

To do so, it will be necessary to focus on these 4 key points:

By optimizing each link in the value chain, from raw material acquisition to product delivery, a company can maximize both efficiency and customer satisfaction.

  • Customer Service: One of the keys to any logistics strategy is to provide maximum customer satisfaction by offering not only a quality logistics service but also delivery times that meet current standards.
  • Inventory management: Inventory management is another factor that has a direct impact on the logistics process and must be addressed by trained personnel specialized in this area. A dependable 3PL service can also assist in procurement management, ensuring a steady flow of materials to maintain inventory.
  • Warehousing: Having a company that offers a good warehousing service, as we have explained above, will be a differentiating factor that will determine an added value in terms of the professionalization of the company’s logistics service and planning.
  • Information Technology (IT): The technological aspect cannot be ignored, and that is why the use of management software will be a very important player in order to develop the logistics strategy efficiently.

Having these 4 pillars outlined and developed will allow for the creation of a comprehensive strategy that means you can identify and efficiently address the logistics challenges of the business, which in turn contributes to an improved service, increased efficiency and greater profitability.

This entire logistics strategy must be aligned with the company’s business objectives in order to meet delivery deadlines responsibly and on time with the objective of guaranteeing a service that satisfies customer needs.

An effective logistics strategy hinges on competent global Supply Chain Management, which encompasses everything from procuring raw materials to ensuring the final delivery of the product to the customer.

Partnership with reliable third-party logistics providers

As we have explained above, partnering with Third-party Logistics (3PL) services will allow you to add the field of professionalization to the logistics of your company.

This is essential when scaling a store or facing a quantitative leap in terms of the amount of monthly sales, since the use of a 3PL service offered by professional logistics companies  will allow you to delegate the inventory management and shipping of products in order to increase the profitability of the store.

In the retail industry, efficient inventory management is particularly crucial to keep operations smooth and prevent understocking or overstocking.

The role of Beeping

Reliable 3PL services play a vital role in efficient Order Fulfillment, handling all steps from storage to packaging and shipping of products.

Logistics service to grow your ecommerce

Express shipping

Customized support

Online catalog

Imported products

At Beeping we have a specialized service in which we can help you to professionalize the entire stock management area of your store, as well as the shipment of your packages through a highly professionalized template.

Store your products in our warehouse

Personalized package

Customize the boxes of your shoes or your jewelry or introduce personalized flyers with discounts.

Returns service

Your customer wants to change size? We take care of sending a new size.

cajas

Control of stock

Keep track of how much stock you have of each variant.

contra reembolso

Cash on delivery available

You will be able to offer your customers the possibility of cash on delivery.

Efficient inventory management

Let’s start this section with a question: Why is it important to manage product inventory efficiently?

First of all, it will allow you to correctly plan the necessary actions at each time of the year.

Aside from maintaining efficient inventory, implementing Demand Forecasting is crucial to anticipate market fluctuations and adjust inventory strategies accordingly.

Inventory management is not the same in Q1 (January – February – March) as it is in Q4 (October – November – December) when sales are multiplied by 3 or even 10. This makes Peak Season Planning for eCommerce crucial.

For this, it is very important to follow up in real time through the professionalization of the personnel and using the support of Warehouse Management Systems (WMS) that analyzes the sales curves of each product and gives you an estimate of the necessary stock quantities in order not to overexert the stock and to be able to maintain a cash flow that allows you to continue developing the business.

In short and answering the question posed by Dotcomdist.com: What are the benefits of efficiently managing inventory?

  • Improves the organization of the company
  • Increases productivity
  • Allows for greater control of the products
  • Saves time and money
  • Improves and increases customer satisfaction by significantly reducing shipping errors due to internal stock organization.

Providing excellent customer service

Continuing with the last point of the previous section and, although it may not seem to be the case, there is a close relationship between a company’s logistics system and customer service.

Moreover, the first real contact between an ecommerce business and a customer occurs thanks to a well-functioning logistics process, since the purchase ends with the reception of the purchased product.

From here we can analyze that logistics planning has a direct impact on customer satisfaction in ecommerce.

“Logistics planning has a direct impact on customer satisfaction”.

But how can we manage customer expectations in terms of delivery times?

First of all, be realistic about delivery times. There is no point in promising delivery in 48 hours if you don’t have the right service or if you don’t take into account the customer’s location.

Then, it is very important to provide an online tracking number where the user can check the location of their package and the estimated delivery date in real time.

Always offering active communication is a factor that is highly valued by customers, especially in the digital world where there is no “face-to-face” or place to go to in order to complain about the status of a package.

Finally, having a clear returns policy also contributes to customer satisfaction and the idea of knowing that in case you have to return your product the reverse logistics process can be done in a fast and friendly way through customer service.

Ensuring fast and reliable delivery

DHL is one of the largest transportation companies in the world and in its article “Why faster & same-day delivery is a competitive edge for e-commerce businesses” it provides an interesting analysis on the advantages of having a fast and effective shipping strategy.

Enhance customer satisfaction

Fast shipping is directly associated with good customer service, which is why this aspect contributes strongly to positive user ratings when analyzing the shopping experience at an online store.

Higher conversion rates

Another interesting point made in the DHL article refers to the idea that offering a fast delivery service (same day or maximum 48 or 72 hours) is a very important purchasing decision factor for the customer.

To really drive this point home, according to this article published on Digitalcommerce360.com, 61% of users surveyed have said that the key point that tips the balance when ordering from an online store has to do with the speed of shipping.

And if we dig a little deeper into the analysis of this graph, 4 of the first 5 items highlighted are concerned with logistics processes.

In short, guaranteeing fast delivery is essential for the growth of an online store in these times because not only will it allow you to improve your image and customer satisfaction, it will also allow you to have a fundamental competitive pillar to differentiate yourself from the competition.

The future of ecommerce logistics

The Ogoship blog published an interesting analysis about the future of ecommerce logistics.

Within the story, it is interesting to highlight the turning point that the 2020 pandemic has meant and its weight in the increase in the price of materials used during the logistics process by up to 44%.

This has led different companies to rethink their business in order to remain competitive.

This is when not only a change of materials arises (changing plastics for cardboard, for example) but also the irruption of 3PL as a method of multifunctional supply.

The role of courier services is crucial in this respect, as they are responsible for the product’s final delivery to the customer.

There is also no doubt that the emergence of Logistics Optimization Technology such as AI, Machine Learning, and Automation will begin to gain more strength in an increasingly automated sector such as logistics.

What’s more, Amazon has started using drones for the delivery of its packages in some points of the United States, so it should come as no surprise  if we begin to receive packages via this method in the near future.

Furthermore, a simple and secure ecommerce checkout process can boost customer trust and lead to higher conversion rates.

Amazon's drone

Given this scenario, it will be essential to be attentive to new technologies and invest efficiently in order to maintain customer satisfaction at its peak by offering fast and efficient shipments.

Conclusion

In this article we have reviewed the importance of having a logistics strategy that adapts to the needs of the store and customers.

It is also very important to choose the right logistics method, whether it is internal logistics, external logistics or dropshipping.

Beeping puts an entire team of professionals at your disposal so that you can offer a 3PL service that will position your store and give it a leap in quality with regards to efficiency and speed in the logistics of ecommerce shipments.

In short, you should take all these points into account, and take note of the future trends in ecommerce logistics, in order not to miss the train and focus on the crucial point of customer satisfaction.

FAQ

🔠 What is the role of logistics planning in eCommerce operations?

It plays a fundamental role in coordinating the entire logistical process of a product until it is delivered to the buyer’s home. In addition, it is closely linked to customer satisfaction, which generates a constant reflow of sales.

🧐 How does efficient logistics planning affect my eCommerce business' bottom line?

As we have reviewed in this article, efficient logistics planning has direct business results.

Among other things, it allows you to reduce costs, improve customer satisfaction, earn more money and have operational efficiency and organization.

✅ What are the best practices for devising an eCommerce logistics plan?

The best way to carry out an ecommerce logistics plan is by focusing on comprehensive logistics planning points, evaluating the possibility of partnering with a 3PL service, efficiently managing inventory and ensuring fast and efficient shipping. The result of a good job will be reflected in customer satisfaction.

👍🏻 How can I optimize my eCommerce supply chain through effective logistics planning?

The best way to achieve this internally is to optimize your own logistics resources, improve the sourcing of goods and develop a strategy where you can be strong at peak sales times of the year.

If you are unable to respond to any of the points, you can use an external service to make up for your company’s internal shortcomings.

📦 How does a third-party logistics (3PL) service contribute to logistics planning in eCommerce?

The addition of a 3PL will allow you to focus your energy on store growth without having to worry about the hassle and responsibilities of managing the logistics of your products.

✍🏻 What models of logistics can be implemented for better planning in eCommerce?

The 3 models we have explained in this article, each with its advantages and disadvantages: In-house logistics, external logistics or 3PL and dropshipping.

😎 How do I handle reverse logistics planning in my eCommerce business?

We recommend you write down each of the aspects we have detailed about reverse logistics in ecommerce in this article of our blog.

👌🏻 What are the key factors to consider in planning the logistics for international eCommerce?

In the case of logistics planning for international ecommerce, you must take into account some factors:

  • Stay up to date with the customs regulations of the destination country as well as the documentation to be presented at the customs of your country.
  • Have a reliable carrier with a track record in the international shipment of packages.
  • Verify that transit and handling times meet your customer’s demand in order to guarantee maximum satisfaction.
  • Offer a multilingual customer service with which you can meet the demands and queries that may arise.
💻 How does technology play a role in logistics planning for eCommerce?

As we have explained in this article, technology plays a fundamental role in logistics planning since through management software you will have access not only to the stock of your products but also to different reports that help you to know when to invest and which new products could be the next big thing.

🤝🏻 What steps can be taken to make the logistics planning process more efficient for peak selling seasons in eCommerce?

For this point it is important, first of all, to analyze the sector in order to know when you will have sales peaks and to be able to adapt the logistics so that the negative ramifications have as little impact as possible on the store.

In addition, taking advantage of an additional service or having a specific meeting with your logistics company will be key in order to get their opinion and know what the delivery times will be and how they will be handled on these special dates.

Contenidos 📋
The first step to success is to work with the best.Learn more about our logistics service.

2 thoughts on “Must-Know best practices in Ecommerce Logistics Planning”

  1. Nice and clear, congratulations on the blog! I really like how you explain every logistics term

Leave a Comment

Your email address will not be published. Required fields are marked *