Raise Your Bottom Line by Streamlining Your Ecommerce Supply Chain
By Rylie Holt
You can spend so much time focusing on your e-commerce site, product development, and marketing that it can be common to overlook some of the little things that can make a big impact on your bottom line. Producing economies of scale may involve outsourcing, for instance, and thinking more strategically about all of the elements in your supply chain, including the seemingly most simple parts like shipping.
Strengthening your bottom line means to improve your margins by cutting costs and lead times, as well as attracting more customers, both new and returning customers, and pushing through the sale of those window shoppers who don’t quite finish their purchase.
Consider outsourcing overseas
The questions on how you approach your supply chain become even more pertinent as you start scaling up, which is where you start thinking more broadly about where you source your products or material and outsourcing. A lot of factors will bear weight on how you make this decision, including pricing, quality, and lead times but it can be challenging to consider all three elements, all at once.
Typically, you can make huge savings when you use assembly lines or source products overseas, although this can, at times, be controversial.
With some due diligence, however, overseas outsourcing makes sense economically. And it’s not just the final product you’ll be outsourcing here, but possibly different components like materials.
Connecting with partners, in many cases, factories is thus essential. Going directly to factories, instead of an intermediary, will help control your margins as well.
Just because these factories are overseas, the process of communicating with them does not have to be daunting. Just keep a few considerations in mind, including the need to be concise and precise. Where possible, send them a sample of what you’re after, including designs or logos. If you nail this, it’s much easier to streamline the whole process.
You can nurture this relationship over time, for instance, by slowly getting to know the sales rep and in time reaching out to the manager and the factory boss, and adopting local methods of communication to supplement regular channels like email. For instance, WeChat is popular in China.
However, one thing you’ll want to keep in the back of your mind is your intellectual property. Getting patents overseas can be tricky in some areas, and fighting legal battles abroad are more trouble than it’s worth. You can put this in place in the U.S., however, which will help stop imports that infringe copyright.
Packing and shipping
Another factor often overlooked with regards to streamlining processes and supply chains is shipping, the final process of getting the product to the consumer, which makes it a crucial part of your business.
It can also be a significant expense warranting some time to be invested in a shipping strategy.
There are several parts to a productive and streamlined approach to shipping. The first is considering shipping rates and shipping methods.
At the most rudimentary level, you can either pass the full cost of shipping on to your customer, give them free shipping or have a flat rate across the board of products you offer, despite weight, size, or origin, etc.
Free shipping will undoubtedly help reduce shopping cart abandonment. According to Incify.co, 58.6% of U.S. online shoppers have abandoned a cart within the last three months because “I was just browsing/not ready to buy.”
Whichever approach you take, it’s still worth weighing your products as shipping costs might not vary for you, and making this step for all your products will give you a better sense of costs involved.
You also then need to think about the type of packaging you use and how you will deliver the product. Will you need padded envelopes, or do you want to use branded packaging? If yes, you might want to consider using shipping labels that compatible with Zebra, Dymo & Avery since those are the most common labels printers; you can find affordable shipping labels from enkoproducts.com.
Remember to Keeping it light and as ergonomic as possible will help keep costs down, an incentive for your margins, and the customer. There are several delivery options you can choose from, including private couriers, DHL, UPS, or the national postal service.
Finally, consider insurance and tracking. This consideration adds on costs to you but can safeguard you against higher liabilities such as damaged or lost packages.
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