How Does eCommerce Logistics Work?
Logistics is the greatest challenge for any eCommerce company especially in a country like India whose territory is vast. eCommerce logistics model has become so advanced that online buyers could track their consignment from the date of dispatch from factory or warehouse till delivery at consignees address. It is even more difficult in rainy season as extensive areas get flooded and many bridges get damaged.
Earlier, before the advent of eCommerce companies, retailers sourced goods either from manufacturers or distributors. Now, after the introduction of online shopping stores, the intermediaries cease to exist and the dealing is done directly between supplier and end-user: C& F (clearing and forwarding agents), distributors, dealers, and retailers have no role in this direct selling process. With these intermediaries removed, eCommerce shipping has become an important part of the supply chain management and emerged as a highly specialized service with the majority of them being managed by eCommerce companies themselves.
Logistics includes inventory management, warehousing, packaging, labeling, billing, shipping, payment collection, return, and exchange. These together constitute a huge task. Along with these, a logistics also requires thorough knowledge about territories, roads and road conditions, regulations regarding the movement of goods, and transport laws. The principal purpose of creating a logistics unit is faster, safer, and more accurate delivery of consignments.
How eCommerce Logistics Works
A logistics company functions in two directions:
- Forward Direction – Distribution and delivery of goods to buyers.
- Reverse Direction – Exchanging or replacement of defective, damaged or wrong shipments.
Both these processes become easy if logistics is managed and controlled by an eCommerce company.
Working in the Forward Direction
For an eCommerce company logistics in the forward direction involves logging of an online order, arranging for the item, packaging, preparing its invoice, arrange for payment, dispatching, and delivery. The time between logging an order to its delivery depends on the availability of the material and location of the consignee. For certain locations, a separate delivery charge could be applicable. From the time of dispatch until delivery of a consignment, it is the responsibility of the seller to notify the exact location of a consignment to its respective consignee through tracking.
Payment collection is essential for any supplier, and an eCommerce company is not an exception. An online retail company should have multiple payment options: by debit/ credit cards, bank transfers, and COD (cash on delivery). In a country like India where buyers are more comfortable with dealing in cash, COD option is of utmost significance.
Working in Reverse Direction
In spite of the best efforts the possibilities of wrong or damaged shipments cannot be ruled out. In such situations an efficient reverse logistics is important. It is the responsibility of logistics to take back these defective or damaged materials and replace them with proper materials within a reasonable time. A hassle-free exchange or replacement process goes a long way in building trust between buyer and an eCommerce company.
For any logistics or online retail company customer relationship is critical. This relationship is established by delivery boys who are actually the face of an eCommerce company to buyers. Delivery boys must always be well behaved and patient with customers. Attention must be paid to complaints with assurances of rectifying them soon. It is advisable to have delivery boys with a cheerful disposition.