What is E-commerce?
E-Commerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions.
Logistics, are the processes of shipping order to customers or transporting an inventory to a merchant. The logistics process keeps a track of goods in transit and up unto the point of delivery.
Logistics management is the practice of locating and identifying potential distribution and shipping companies, and evaluating their effectiveness. For most businesses it is more cost effective to outsource the logistics to a third-party company that specializes in transport and storage, and this is especially true for eCommerce ventures.
The introduction of logistics in the shipping of goods has meant a sharp decrease in goods that go missing in transit, or drivers of vehicles who decide to take a detour on their way to the destination. The packages can be located at any point during the journey thanks to equipment in the truck or other means of transport being used. It has also improved delivery times, ensuring that customers have goods and products when they need them. The ultimate goal of logistics is to move goods from one point in the supply chain to the next in the fastest, most efficient and most cost effective manner possible.
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.
Working in the Forward Direction
A. Receiving the order on an eCommerce store
B. Providing a payment option
C. Preparing inventory
D. Packaging the item
E. Preparing its invoiceDispatching the order
F. Handing over the parcel to the courier company
G. Handing over the parcel to the courier company
In an eCommerce company logistics in the forward direction involves receiving an online order, arranging for the item, packaging, preparing its invoice, arranging the payment, dispatching, and delivering the item to the customer’s doorstep. The time between receiving the order and its distribution depends on the availability of the material and location of the consignee. For specific 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 shipment to its respective consignee through tracking SMS or email notifications.
Payment collection is essential for any eCommerce business owner, analogous to a retailer. An online retail company should have multiple payment options for better customer experience such as debit/ credit cards, bank transfers, and COD (cash on Delivery). In a country like India where buyers are more comfortable with dealing in physical money, COD option is of utmost significance.
Working in Reverse Direction
In spite of the best efforts the possibilities of incorrect or damaged shipments cannot be ruled out. In such situations an efficient reverse logistics is essential. It is the responsibility of logistics to take back these defective or damaged materials and replace them with proper order that satisfies the customer within a reasonable time. A hassle-free exchange or replacement process goes a long way in building trust between the buyer and an eCommerce company.
For any logistics business or online retail company-customer relationship is critical. This relationship is established by delivery boys who are 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.