5 fulfilment logistics tips to keep e-commerce costs down

Managing a tight budget is critical to running a successful e-commerce business. In a business landscape where costs are ever-rising, it's essential to make savings where you can. Many businesses end up overspending on the supply chain, particularly when it comes to fulfilment and logistics. 

Recent studies reveal that logistics costs for e-commerce businesses are on the increase. They typically fall between 5% and 15% of sales, but research from McKinsey & Company suggests that 12% and 15%  will become the norm.

Looking for ways to improve your bottom line? We've compiled a list of tips to help you manage these costs, keep them as low as possible, and leverage the right resources for a long-term strategy. 

Reducing your fulfilment and logistics cost down

Read on to learn how to: 

• Prioritise customer service.
• Implement smart and sustainable e-commerce fulfilment. 
• Introduce best practices for managing e-commerce shipping. 
• Choose the right fulfilment logistics partners. 
• Stay up to date with e-commerce fulfilment trends. 

#1 Prioritising customer service 

Excellent customer service positively impacts so many areas of your business, and that includes your logistics. You only need to break it down to see that a slick, customer-focused approach helps to minimise issues with order discrepancies, returns, handling, complaints and in worse-case scenarios, legal costs. 

Making sure the entire process is efficient and easy for the customer will help minimise these costs. To achieve this consider things like accurate picking/packing workflows, customer-initiated returns and effective returns management, from gone-away processing to stock control.

#2 Smart and sustainable e-commerce fulfilment

With waste costing e-commerce companies billions each year, it can be a huge contributing factor to rising logistics costs. Working in a way that’s sustainable and lean will help you strengthen your service offering and reduce fulfilment costs. 

Considering partnering with local companies, managing waste and running an energy-efficient operation will all help lower costs. Also look at the flow of your logistics, where waste occurs, and ways to integrate automation. This can include using AI to streamline workflows and communications.

#3 Best practices for managing e-commerce shipping

An understanding of the logistics workflow will enable you to reduce delays and minimise stuck shipments and return-to-sender issues. All these factors directly impact costs and time spent. 

Monitoring the journey of your shipments through the right technology (like AI platforms or through partners with this technology already embedded) can also offer full visibility of the logistic journey, and help you handle the process by proactively working on any delays in the chain.  

#4 Choosing the right fulfilment logistics partners

The global e-commerce logistics market was valued at 315.82 billion USD in 2022 and is expected to grow by 22.3% from 2023 to 2030. As it grows, more businesses choose to outsource their e-commerce fulfilment.

This can help reduce costs and increase efficiencies leading to cost savings across payroll, equipment and transportation. Partnering with a reliable logistics fulfilment company with a strong offering like Intersend, will also help you to focus on what you do best and take advantage of their infrastructure for a tailored, flexible approach. 

#5 Keep up with e-commerce fulfilment trends 

The rapid development of technology and a fast-moving, dynamic sector means that logistics fulfilment is changing all the time. Keeping up with the pace of e-commerce trends will enable your business to take advantage of the best opportunities as they enter the market. For example, some upcoming e-commerce trends for 2024 include social commerce, tech innovations and inventory management. 

Ultimately, the aim is to keep costs as low as possible, while seamlessly managing customer’s expectations. Being up to date on what’s new in e-commerce logistics will help you to achieve that.

To find out more about our e-commerce fulfilment services contact us now.