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Warehousing & Fulfillment

5 Logistics Best Practices for Supply Chain Leaders

Warehousing & Fulfillment
December 3, 2021
7 min read
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These logistics best practices will help businesses of all sizes turn their supply chain into a revenue driver for their business.

Improving logistics and supply chain has become a top priority for many businesses recovering from recent supply chain disruptions while trying to keep up with consumer demand. These five best practices are essential for merchants of all sizes to achieve flexibility and efficiency in their supply chain.

Logistics Best Practice #1: Treat Logistics as an Essential Business Process

Handling logistics should not be viewed as something external to your business practices — quite the opposite. In fact for many SMBs, finding the right logistics solution is integral to business success. Prioritizing logistics strategy in early phases of business development can position your business for rapid and sustainable growth.

2021’s supply chain issues showed many businesses — from large retailers to small merchants — that a disruption to the supply chain means a disruption to sales. Or as Mark Livingston of YBell Fitness put it, “You can have the best product and best sales platform in the world, but if you can’t get your product to your end customer, you’re dead in the water.”

Optimizing fulfillment to meet customer expectations for fast and affordable shipping can actually drive sales at the top of the funnel. Our 2021 consumer survey showed that 69% of consumers more likely to click on an ad that mentions fast and free shipping.

What’s more, delivery promises can have a significant effect on cart conversion rates as well. Our recent merchant survey data revealed that 65% merchants saw cart conversion rates increase by as much as 25% when 1-2 day delivery was offered at checkout, and 59% of merchants saw more repeat customers with a 1-2 day delivery promise.

Optimizing a sales strategy without optimizing your supply chain to support those sales will ultimately lead to negative customer reviews, poor retention rates, and complicated or overpriced fulfillment solutions.

Logistics Best Practice #2: Find an Asset-Light Solution

Major retailers may have the capital to invest in in-house fulfillment, but for most merchants, outsourcing logistics can help free up resources to invest in their core business competencies. The day-to-day demands of managing warehouse space, equipment, and labor can siphon resources away from sales and marketing, customer service, and product development.

Children’s furniture brand, ECR4Kids had a sophisticated fulfillment network, with multiple warehouse locations that they managed in-house. Their logistics operations were serving their retail partners well, but when they decided to launch into to direct to consumer (D2C) marketplace sales, they knew they needed an outsourced partner to help them meet D2C 1- to 2-day shipping expectations.

They decided to outsource all of their D2C shipments to a 4PL and continue to fulfill their retail orders in-house. However, at the end of their trial period with their new 4PL partner, they realized that their entire business could benefit from the hands-off, asset-light outsourced fulfillment model, so they moved out of all of their warehouses, transitioning all of their fulfillment operations to the 4PL.

Watch the full ECR4Kids case study at https://ware2go.co/ecr4kids/

Logistics Best Practice #3: Find a Flexible and Scalable Solution

Recent supply chain disruptions highlighted the need for supply resilience to succeed in the face of uncertainty. Merchants who were able to pivot their freight strategy in time for the 2021 peak holiday shopping season were more likely to avoid the stockouts and missed sales that plagued many large retailers.

Even outside of major disruptions, most merchants experience some degree of seasonal demand spikes. Rather than getting locked in to lengthy agreements or hit with peak surcharges, merchants should consider on-demand warehousing to manage seasonal demand. With an on-demand warehousing solution, merchants can pay only for the space and labor they need when they need it, scaling back on resources during the off-season to maximize the profitability of seasonal sales.

Take for example, CoolersByU, a provider of “ready-to-paint” coolers and kits. CoolerByU targets primarily college students involved in Greeklife communities, creating heavily seasonal demand cycles for their business. Given these challenges, CoolersByU prioritized a fulfillment provider that could quickly scale up or down with them according to demand. By partnering with one of these on-demand fulfillment partners, CoolersByU reduced shipping expenses by 30% and eliminated 25 weekly hours of in-house fulfillment responsibilities, all while adopting a solution that allows them to scale fulfillment up and down based on need. 

Logistics Best Practice #4: Plan Ahead

Your business goals should determine your approach to logistics rather than the other way around. For example, Hungry Harry’s, an allergy-friendly line of baking mixes knew from the start that they would have an omnichannel approach to sales. Although they launched their brand with a D2C ecommerce channel, they knew they would ultimately go after distribution to major supermarket chains.

In support of this strategy they prioritized finding a fulfillment partner with the flexibility and expertise to fulfill a mix of orders from small parcel residential shipments to full pallet retail shipments. Their commitment to their long-term business objectives enabled them to find a partner that they could “grow into” as their brand grew.

Logistics Best Practice #5: Prioritize Technology

The logistics industry isn’t necessarily known for technology. Although to some degree, the business of moving inventory and fulfilling orders will always be an analogue process, there are many aspects of logistics that (and should) be automated. The backbone of a digitized supply chain is a powerful warehouse management system (WMS). The best WMS will lend several efficiencies to logistics operations:

  • Automated order processing to ensure orders are filled as quickly as possible (often same-day)
  • Inventory management to guard against stockouts and missed sales opportunities
  • Delivery tracking for visibility all the way through the final mile

Ware2Go’s flexible fulfillment solution enables merchants of all sizes to compete and grow with integrated technology, a distributed warehouse network to enable nationwide 1- to 2-day shipping, and in-depth reporting to inform more strategic supply chain decisions. To learn more about partnership with Ware2Go, talk to one of our fulfillment experts today.

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