Running an eCommerce business could be a great way to reach your financial goals. It is also a lot of hard work, though. If you do not put forth the necessary effort, your plans of building a successful business will likely fall flat. Without solid supply chain management strategies in place, it is almost impossible to grow a profitable brand. Even if you do get lucky and achieve success, failing to implement effective strategies can impact your day-to-day operations, inhibit growth, and lead to your ultimate demise.
No matter what type of products you sell, having solid supply chain management strategies in place is vital. From craft supplies or wholesale t-shirts to customize to purses, pet treats, or personal care products, everything you buy with the intent of reselling needs to come from somewhere. If you haven’t nailed down exactly where those things will come from and how you will get them, you are setting yourself up for serious problems.
In addition to ensuring you are able to obtain the things you need, your supply chain strategy should play a significant role in reaching your business goals. Unfortunately, there is no “one-size-fits-all” solution. Supply chains and their associated challenges vary from one business to another, so it is crucial to adopt one that works for you. Keep reading to discover a few of the most common supply chain management strategies for eCommerce.
Improve Inbound Supply Chain Efficiency
If you are struggling to keep your online store stocked with products or you are looking to take your business to the next level, focusing on improving inbound supply chain efficiency is crucial. In this case, you need to take a close look at your current problems and what they are costing you, in terms of both money and time.
Figure out which vendors are causing issues, and work with them to find solutions. When that isn’t possible, seek out new vendors that will better meet your needs. You may also need to implement vendor compliance programs, upgrade your technology, or figure out what inbound and fulfillment tasks could be handled cheaper or faster further up in the supply chain.
Increase Warehouse Capacity
Not having enough space to store your supplies or merchandise prior to order fulfillment bogs down your supply chain. When you have to waste hours – or even days – trying to find space to store orders, your business suffers from decreased productivity.
When moving to a larger facility is not an option, determining how to maximize the space in your current warehouse is crucial. There are several considerations to keep in mind when designing an effective warehouse. Use them to redesign and reorganize your warehouse, and you will likely increase capacity and enhance productivity.
Reduce Delivery Times and Shipping Costs
Thanks to the Amazon Effect, consumers have grown accustomed to fast, free shipping. This, of course, creates challenges for smaller eCommerce companies that lack their own massive distribution centers, delivery drivers, etc. It does not mean that you are doomed from the start, though.
While you may not be able to deliver products to your customers for free within two days, you can take steps to reduce costs and shipping times. Offering free shipping increases your appeal to customers significantly, even if you have to slightly raise your prices to offset the expense. You might also be able to reduce delivery times by changing carriers or opening multiple distribution centers.
Use Third-Party Logistics
Third-party logistics – or 3PL – allows you to outsource fulfillment rather than handling it yourself. While this option is not right for every eCommerce business, it does work well for many medium and large companies.
Working with a 3PL company allows you to improve your supply chain in a few ways. First, it can significantly reduce the amount of time needed to process and ship orders. Second, depending on what company you choose, it could enable you to have products shipped from multiple warehouses across the country to cut down on shipping times. Third, the use of 3PL can facilitate growth without needing to hire more people for your internal team. This could save you both money and time.
Manage Workers More Effectively
Most eCommerce businesses rely on warehouse workers to pick, pack, and ship orders. Unfortunately, manual labor is not cheap. While automating your processes is an option that drastically reduces the cost of labor in the long run, it is not a feasible option for smaller businesses that do not have millions of dollars to invest in technology.
In this case, you may more effectively manage your employees by paying close attention to productivity, streamlining processes, and reducing employee turnover. Incentivizing hard work is a solid strategy, too. Find out more ways to manage labor in your eCommerce business more effectively.
Decrease Processing Times by Increasing Paperwork Accuracy
Dealing with paperwork inaccuracies bogs down supply chains. If you have not already implemented barcode technology and are still tracking everything manually, doing so is one of the easiest and most effective means of increasing accuracy and decreasing processing times.
Use barcodes in your receiving, putting away, picking, packing, and shipping, etc. processes, and you will be able to significantly speed things up and avoid costly delays. This type of tracking makes it easier to monitor your employees’ activities and productivity, too.
The Bottom Line
Whether you have built a small online business around reselling customized blank t-shirts or you’re running a multi-million-dollar corporation, solid supply chain strategies are vital to your success. Keep in mind, though, that the strategies outlined above are just a few of the many options. It is up to you to determine your business’s unique challenges, strengths, and weaknesses and implement a strategy that works for you.
You may also need to adjust or change strategies to keep up as your business grows and evolves. Building a successful online business is not something that happens overnight, but, with patience and dedication, you can be on your way to owning a highly profitable eCommerce site.
