E-commerce logistics: 7 common mistakes to avoid

E-commerce logistics are a real challenge for most brands. The goal is to wow consumers with an outstanding delivery experience at every touchpoint: the promise of a fast delivery, real-time tracking of their package, an unforgettable unboxing experience, and simple product returns in case they are not satisfied with their purchase.

As an e-commerce seller, you know it is easier said than done. So, what are the 7 most common mistakes to avoid in e-commerce logistics? How can you turn shipping into a delightful customer experience that increases your revenue? 

1. Poor stock management, a challenge for e-commerce logistics

Proper stock management is a critical success factor for e-tailers. Estimates vary, but inventory can represent between 30% and 40% of total assets for e-commerce brands. Whereas stock management errors accounted for over €255 billion in losses in revenue for e-tailers, representing 12% of their total sales.

A good organization must be in place to avoid : 

• Overstocking: keeping too many products generates costs of immobilization and returns to suppliers;
  

• Under-stocking: running on a just-in-time basis is a good bet as long as you are sure you won’t run out of stock. Nothing is more disturbing for buyers than not being able to buy something they want during Black Friday or Christmas because it is out of stock. 
  

The key to finding the right balance is to study the ratio between the customer acquisition efforts for each product and the sales volume. Your goal? Identify your best-selling products to avoid running out of stock, and exclude underperforming items.

2. Order processing errors

A diminished customer experience

When a customer orders an item from your e-shop and receives the wrong product, their first physical interaction with your brand is disappointing. On top of it, they need to put on additional work:

• notify you of the mistake;
• return the products;
• wait for the right product to arrive or getting reimbursed.

Depending on the situation, the customer has to reschedule the delivery with the carrier or go back to a relay point. This can undermine the trust between the customer and your brand. They will remember the quality of the product but mainly the fact that the delivery was painful.

Order processing errors are a waste of time not only for the customer but also for the brand.

The impact on revenue

As you can imagine, order processing errors impact your business. Delivery issues cost e-tailers more than €250 million during the holiday season and over €1.2 billion in potential lost revenue from shoppers who will not return after a poor experience.

One WMS company estimates that the average error rate is between 1 and 3%. With an average error rate of 2%, the estimate takes into account several factors:

• The cost of order fulfillment - whether done correctly or not it requires human work;
• Order mistakes dissatisfy customers, and it may impact retention;
• The cost of returning the products is your responsibility, which cuts into your margin. 
• The cost of shipping the correct item ordered necessarily adds extra logistics cost;
• The packaging costs double because you two products to be packaged (one for the wrong product shipped and another for the new product shipped);
• The commercial gesture to apologize for the mistake is sometimes necessary to keep the customer's trust.

E-commerce logistics comprehends several stages, each of which involves difficulty. It is up to you to monitor the quality of the delivery which is ultimately as important as the product itself.

3. Scalability: a real challenge for e-commerce logistics

The challenge of scalability for an e-tailer 

Scalability is your ability to handle the sudden peaks of growth of your business.

This means that when faced with growing demand, such as for holiday periods or sales, you must be able to put in place the appropriate e-commerce logistics to deliver, in time, a large number of goods. 

Therefore, the volume of requests also means the risk of additional errors: out of stock, wrong orders, missed deliveries, etc. All these elements are costly for your company.

E-commerce logistics facing scalability: some thoughts

First of all, with experience, you already know the periods of more intense purchases. Similarly, if you are developing a brand with a media spotlight on you, you should also be prepared for an order boom.

Then, as a business owner, it is up to you to make strategic choices to save time. For example, hiring a logistician is an excellent way to optimize order taking, packaging, and shipping. You can also hire temporary workers to whom you will have to devote enough time to train them properly.

Finally, if everything is done on the web, pay attention to your hosting. It's essential that your site can handle a lot of traffic during busy times. There is nothing more harmful to you than losing ordered baskets or having your website down because your traffic exploded.

4. Lack of real-time visibility: an opportunity for improvement

The importance of visibility for the end customer

For the consumer, having a "sense of control" over their purchase is reassuring. This requires letting track their package in real-time.

Thus, provide a place in his personal space that informs him of the progress of the order: the success of the purchase, preparation of the package, the shipment, the delivery etc. 

You can also do this via a mailing that informs him about the preparation of his order and its delivery.

Real-time visibility: an effective lever for e-commerce logistics

The real-time vision of your company allows you to optimize your logistic operations. It is clear that you can do it in-house but working with a logistics partner specialized in e-commerce, gives you global visibility on :

• the stocks ;
• the best-sellers ;
• the immobilized products ;
• the orders placed ;
• the status of delivery ;
• delivered orders;
• delivery failures and complaints;
• the generated turnover.
  

A well-built dashboard is a real way to identify the gaps and strengths of your organization and make strategic decisions based on them.

5. Hidden costs: the downside of e-commerce logistics

A lack of transparency on shipping costs weakens your brand's image. When you order a product, what could be worse than to find yourself with a bill that you didn't expect.

You then have the double mission to be precise on the delivery costs and to minimize their amount. High shipping costs discourage people from buying. 

Your goal? Find a balance between efficient delivery and reasonable shipping costs. The most important thing is to offer customers an informed choice. It's even more important because 59% of online buyers abandon their orders because of delivery options that are deemed unsatisfactory. 

Therefore, offering several options to your customer is a good solution:

• fast delivery ;
• standard delivery;
• delivery in relay points and lockers.

In each case, clearly indicate the price to be paid in black and white.

From a commercial point of view, free delivery costs, for standard and relay points, are highly appreciated by the consumer. But this is only possible if you can afford it and depend on the product ordered.

Dans chacun des cas, indiquez bien noir sur blanc le prix à payer.

6. The choice of a logistics partner: an objective analysis of existing solutions is required

If you've decided that "in-house" logistics management is becoming too messy, it may be time to professionalize your e-commerce logistics. Spending your time dispatching orders is not your core business. And, it would be more useful to devote your time to developing your business!

The first thing to do is to benchmark the logistics providers on the market. At Bigblue, we are here to help you grow your e-commerce with an outstanding delivery experience. 

Laure Babin, founder of Zèta Shoes, spends 20 minutes in the morning, and 20 minutes at night to manage her logistics through Bigblue’s platform. We have helped her scale from 100 monthly orders to 10 000 with automated logistics.

Ready to turn your logistics into a growth lever? Let’s talk!

7. Returns management errors

Let’s start with the bad news: you will not be able to avoid reshipment. However, they can become an opportunity! If correctly implemented, a returns policy for e-commerce offers you the chance to prove to your future clients that you care about their needs and address their concerns. This is particularly important, knowing that most e-tailers don’t meet the expectations of their customers.

A well-thought product returns weigh in more heavily than we could imagine in the success of a brand. Even more so, knowing that 92% of buyers indicated they would buy again on the same e-shop if the returns processes are simple. 

Being slow to meet customer’s demands concerning returns can negatively impact your revenue. Buyer dissatisfaction will quickly show on client’s ratings and reviews about your e-commerce. This will also be the case for negative comments on your social media. 

f left unattended, your brand image will suffer, and you’ll struggle even more to convince new clients to trust you. A vicious circle to avoid…

Operationally, an inefficient e-commerce returns policy will make you waste a lot of time. And thus, it will distract you from growing your business. In this blog article, we tell you how to build an effective returns policy.