To understand how e-commerce affects logistics, we must start by understanding that distribution strategy is one of the most important parts of e-commerce. Therefore, it is important that companies build an effective online sales channel that is fast and connected to the distribution area.
Changes in marketing affect all parties involved in end-to-end supply chains.
In this case, the great advances in e-commerce have made logistics processes take on greater importance and, consequently, it is necessary to think of new ways to carry them out.
E-commerce has pushed logistics to innovate. Supply chains must be more efficient, so that goods are delivered faster, warehouses function correctly and returns are handled properly.
What is the link between e-commerce and logistics?
This process includes the activities of selling, packaging, transporting and receiving the product in order to improve the customer’s shopping experience.
It is essential that these two concepts are perfectly coordinated to avoid delays in delivery, especially in the retail sector, where the number of daily orders is higher.
So, in addition to a fast website for purchasing, you need to establish how, and at what times, the distribution will take place.
A few years ago, sales were only made directly, so it was enough for a store open to the public to sell products, but e-commerce forces small and large companies to establish a direct channel between digital sales and delivery strategy.
Defining what e-commerce is in logistics may seem complex, but it refers to purchases made by customers through digital channels that must be shipped to the place defined by consumers.
This means that, when a sale arrives, the shipping details, date, value and after-sales conditions are immediately coordinated.
How does logistics work?
The first thing to say is that logistics is defined as the set of activities and processes by which goods are supplied to consumers through a distribution chain.
Define the distribution plan according to whether the customer is the last in the chain or an intermediary, establish the type of transportation, the form of packaging and any other considerations that the goods may involve.
If you remember making an online purchase, you will know how e-commerce shipping works. There are two types of logistics: internal logistics, which is dedicated to receiving the order, invoicing and packaging it, and external logistics, which is responsible for distributing the goods to the end consumer or customer.
As we can see, this system groups all the steps that a company has to perform to ship the merchandise when making a sale through its e-commerce.
Some of the main functions are:
- Control inventory: keeping track of available units can make the merchandise preparation process more efficient.
- Warehousing and packaging: refers to the operational activities within the warehouse and the packaging of goods.
- Transportation: this is one of the main functions, because it is responsible for distributing goods to customers, taking into account the special conditions of each product.
- Tracking: although it may seem that transportation is the final step in logistics, it encompasses knowing and following the route of shipments to ensure their successful completion.
- Reverse logistics: after delivering products to the customer, there are other activities to pay attention to, such as returns or complaints and claims management.
As such, we can see that logistics encompasses much more than the transportation of a product; rather, it is a process that involves various actions to make shipments satisfactorily.
What are the 4 key processes in logistics?
In order to define the company’s logistics plan, you need to be clear about issues such as how far the store is from the customer or the type of packaging required for each product.
But there are 4 key processes for logistics, and these are:
- Storage: the way in which each product is to be stored must be defined according to its size or special requirements for its preservation. It also includes activities that require the movement of goods within the warehouse.
- Inventory: this is a very important process for organizations because it defines which products are available and which are not, in order to prevent customers from buying any products that are not available. For this, it is important to establish the people in charge of these activities and the necessary software to have updated inventory data.
- Packaging: when an order is received, the form of packaging, the materials required and the people who will pack the goods must be defined.
- Transportation: products are transported and delivered to the customer. This process can be done with an in-house or outsourced distribution system. However, the type of tracking and reverse logistics required for each order must be defined.
What are the 4 types of logistics?
Every year, thousands of companies are created that are using the Internet to advertise their products or services, so it is almost impossible to know how many e-commerce companies there are today. To better define the concept, there are different types of logistics:
- Supply logistics: refers to the activities related to the delivery of raw materials to the company to be transformed into the final product. Operations are defined as: choosing suppliers, delivery verification, inventory management and verification of the quality of materials.
- Warehousing logistics: responsible for ensuring that merchandise is correctly recorded and stored. It covers the activities: updating the inventory, recording the arrival of products and incorporation into the inventory.
- Production logistics: responsible for transforming raw materials into the product. It includes transporting the materials to the warehouse and ensuring transformation into the end-product.
- Distribution logistics: refers to the processes for transporting the product to the consumer, but also the analysis and coordination of delivery. Issues such as size and type of packaging, packaging materials, evaluation of means of transport and distribution areas for each must be defined.
In order to establish a system according to the needs of customers and understand how e-commerce affects logistics, it is a good idea to hire companies that are experts in creating payment gateways that coordinate perfectly with the delivery process, and at PayRetailers you can increase your sales in Latin America via our wide range of local payment solutions so you can align with a new logistics process that helps you achieve your goals.