The boom of E-commerce in today’s time, especially when the pandemic hit, significantly impacted global logistics and the supply chain, bringing international trading to its peak. Having said that, the major shipping routes for global trade have never been busier in keeping up with the flow of movement of the goods and services delivered around the world. But you might ask, how does E-Commerce business get affected by shipping routes?
In this article, we’ll discuss how shipping routes can affect your E-Commerce business. But before we dive into that, we need to learn what E-commerce is. This will give us an overview of how the shipping routes can impact your E-Commerce business. So, let’s start with the definition of E-Commerce.
What is E-Commerce?
E-Commerce or Electronic Commerce simply refers to buying or selling goods and services over the internet. And in this time when people are phone-reliant, the rise of E-Commerce began to surge, breaking international barriers. It paved the way for people to buy or sell items in the comfort of their own homes, which kept global logistics busy and brought traffic to shipping routes. Now, how do shipping routes affect your E-Commerce business?
How Shipping Routes Affect Your E-Commerce Business
When your E-Commerce business sells physical items, logistics is one of the first things you should focus on to deliver your items safely and on time. Planning the shipping routes is very critical, and here are some of the factors that would affect your entire business.
1. Product Costs and Pricing
Choosing a shipping route impacts the per-unit cost of your products—for instance, the shipping prices. They depend on different variables, including the location of the warehouse where the goods are coming from up to the customer’s address. And if the end destination is located in a remote area, it is for sure that the delivery charge may be higher.
You also need to take into consideration international shipping—if your E-Commerce business caters to customers all over the world. Planning the shipping routes for international shipping should be on top of your list.
2. Delivery Time
Logistics is the backbone of an E-Commerce business. Of course, you or if you’re using an online retailer, they set the duration of how long it would take for the items to be received by your customers. So, choosing a shipping route that could fit the delivery schedule is essential. Suppose there’s traffic in your selected shipping route or no direct shipping route is available. In that case, it will affect the time of delivery—which will then impact the image of your business because you broke the customer’s trust.
3. Business Exposure In An E-Commerce Platform (If Applicable)
Talking about a retail platform (like Amazon, eBay, or Alibaba) that brings your business to a broad market and sets a delivery timeframe, they can suspend your account on their platform if you fail to comply with their shipping rules. Marketplaces let you choose whether you want them to handle the shipping or you will. And since processing the shipping of items your own is much cheaper, businesses often do that. The only drawback is failure to comply with the rules could affect your store’s exposure in the marketplace.
4. Inventory Management Costs
One of the most expensive aspects of operating any business is your inventory. Managing your inventory well is crucial because uncontrollable factors may affect your shipping routes. For example, when there’s an extreme weather conditions on your usual shipping route, shipping may be delayed—worst, it may affect the quality of your product (if selling fragile items). When that happens, you’ll still need to handle the inventory accordingly to fulfill your customer’s orders, which will cost you more.
These factors in the shipping routes impact the growth of your business. That is why having a strategic shipping plan is best and we’ll give you options to consider for your E-commerce business.
Types of Shipping Approach For An E-Commerce Business
After knowing the effects that shipping routes can bring to your E-Commerce business, knowing the shipping option for your offered goods and services should be next to consider. Here are five shipping methods that you can choose from.
- D2C – Direct to consumer.
A new breed of consumer companies has rapidly grown their loyal following by eliminating intermediaries. This is best for starting an e-commerce business with customers near them.
- White label and private label.
Applying your name and brand to a generic product that you have purchased from a distributor is known as “white labeling.”
When a merchant uses private labeling, a manufacturer creates a special product just for them to sell. You may maintain a tight rein on your production and design expenditures with private labeling and white labeling while searching for a competitive edge in technology and marketing.
A retailer uses a wholesaling strategy when selling its goods in large quantities at a discount.
Although wholesale is typically a B2B (business-to-business) operation, many businesses now provide it to frugal customers in a B2C setting.
Dropshipping is one of the e-commerce strategies that is expanding the quickest. Being successful in it will help your E-Commerce business grow.
Typically, drop shippers promote and advertise goods that are supplied by a third party, such as Printful or AliExpress. By putting buyers and manufacturers in contact, drop shippers serve as a middleman. Users of BigCommerce can integrate inventory for their shops from suppliers all over the world using simple technologies.
- Subscription service.
Publishing companies have been using the subscription model to send their devoted clients books on a regular basis since the 1600s. With e-commerce, businesses are going beyond publications. In almost every business of today’s time, subscription services have emerged to offer clients convenience and savings.
In general, shipping impacts an e-commerce business. Any changes that happen in the shipping routes affect the entire business operation. So, if you’re starting an E-Commerce business, you should always focus on logistics, for it will be the key to your success, besides the quality of your services.