Blog Month: May 2022

Short term – Long term

The importance of fulfillment as a service and site supply logistic management is widely known in the corporate world.  This is true for shippers, carriers, and any packaging and distribution resource management teams.

For those dealing with cross-border logistics and shipping these concerns are even more critical. Issues such as reliable site supply, packaging and distribution management, and customer retention all directly impact logistics companies and their partners. Also, poor fulfillment management can lead to fulfillment costs comprising as much as 20% of net revenue, reports Forbes, up from 5-10% today.

Choosing a fulfillment partner that is up to the challenge can save transportation service providers a lot of time and money by avoiding potential problems in the future. It is important to keep in mind that the partnership may last a significant amount of time. 

So short and long-term needs for shipping services with digitization and automation must be addressed.

This means that sometimes, the long-term element must be prioritized over the short-term elements. Everything from packaging and distribution to third-party collaborations needs to be carefully considered when choosing a partner within the logistics industry.

5 Key Elements to look out for

In this article, logistics companies will learn about the five most important aspects to look out for when choosing a fulfillment partner for on-site supply, order fulfillment, and logistics. They are as follows:

Experience and Reputation

When management teams choose an inexperienced provider that’s new to the industry, they run the risk of delivering a poor brand experience to customers. The impression on the end customer is often directly related to fulfillment performance.  

This increases the need to partner with a well-established, reputable company that is experienced in  site supply logistics and fulfillment. Even the largest logistics companies today rely on a team of experienced fulfillment partners and outside parties to get the job done.

It is vital to conduct business with a company that has years of proven experience and staff that is trained and knowledgeable in all areas of the business and supply chain management. 

Business owners and logistics companies in North America and other regions as well often look for partners with a similar business model and approach to business. This way all involved parties will have direct feedback that enables faster and more accurate decision-making.

Lastly, meeting the  packaging and distribution and fulfillment partner in person might reinforce the relationship which could lead to potentially increased problem-solving in the future. Don’t disregard your company’s reputation in favor of price and make sure they are professional and reliable before you choose them as a partner. 

Navigating the changing landscape of e-commerce and current market trends requires reliable coordination and collaboration at all times. 

Seamless Integration

This element of  site supply logistics management makes the initial set-up process much easier. Set-up should not be a hassle and should not be the most dreaded part of the onboarding and integration process. 

An experienced professional fulfillment partner usually has all types of integrations available that make your life easier.  Third party logistics can help keep things running smoothly day in and day out.

They sometimes offer real-time views of transport, inventory management, warehousing, etc. Make sure to discuss this topic thoroughly before establishing your partnership to avoid the rise of potential issues in the future. 

When reviewing the integration possibilities, consider aspects such as omnichannel integration (price/delivery/transport/warehousing), CRM/ERP platform integration, automated email communications, real-time packaging and distribution, etc. It is well worth the effort to find  logistics companies  that offer these sorts of solutions and services.

Reverse Logistics and Performance

Fulfillment service providers, like  logistics companies and other shipping service providers, can also offer the option to handle the complete returns process. Known as reverse logistics, this is the backward flow of inventory and shipments. It can significantly complicate supply lines and make life harder for logistics managers and business owners. 

Working with a partner experienced in reverse logistics and performance can save time and money. 

Reverse logistics is vital for successful shipping logistics and packaging and distribution. It should always be considered due to the high brand impact potential. This is especially true of cross-border e-commerce and shipping where returns could potentially cost more than the initial shipment.

Make sure to review the performance metrics of logistics companies and partners to ensure there are no nasty surprises down the road and that everyone involved knows what to expect. Also, make sure to consider switching your current service provider and partner if there is a better option available that can save you time and money.

Warehouse Locations

We currently live in an era that follows the golden rule of ‘the faster the better’. Of course, this is not always true, however, customers do expect their shipments to be delivered to them as fast as possible. 7+ days for delivery times are usually not acceptable anymore for site supply logistic services. 

The average delivery time within Europe is around 2-3 days. Experienced fulfillment partners sometimes even offer same-day delivery, depending on your business model. Regardless, it is important to have knowledge of the fulfillment partners’ infrastructure. 

Knowing where their warehouses are located and even knowing traffic routes might validate the claims of delivery performance.  It will significantly improve packaging and distribution, and boost the services and logistics solutions offered.

Working with shippers, carriers, customs brokerage companies, and logistics managers is vital to ongoing growth and recovery today. It ensures everyone knows what their responsibilities are and that everyone stays on the same page with   site supply logistics management.

Brand Reinforcement

The final point to consider when choosing a fulfillment partner for the modern-day service provider is the reliability and reputation of the logistics companies. It is often the small things that make a difference. 

Customization is an important element that should be considered when choosing a fulfillment partner.  Providing the customer with a strong personal brand experience can have highly positive impacts on customer retention and continuous purchases. 

Allowing managers and team members to use custom packaging options may make a difference for M-commerce businesses. It can also provide a competitive advantage by providing customers with the brand experience they seek. 

These five key elements should be kept in mind when considering a fulfillment partner to outsource your shipping and transportation services. Expert insight makes every step of the process, from site supply management,  packaging and distribution tracking, and customer service simpler and easier.  Whether you are dealing with truckload, ocean, rail, or air freight, improved logistics management and distribution will improve processes from start to finish.

Finding the best logistics companies can make all the difference! Would you like to know more about how to choose the correct fulfillment partner?  We have many services, including customized options that can meet all of your needs. Talk to a ModusLink Expert today to get started!

Bibliography

Prozan, Esther Kestenbaum (2022, May 21) Fulfillment Is At The Epicenter of E-Commerce Enablement Accessed October 19, 2022 From https://www.forbes.com/sites/forbesbusinesscouncil/2021/05/21/fulfillment-is-at-the-epicenter-of-e-commerce-enablement/?sh=2550fbb56113

Busby, A. (2019, 24 oktober). Fulfillment As A Service, Why The Future Of Delivery Is In The Clouds. Forbes. Geraadpleegd op 26 februari 2022, van https://www.forbes.com/sites/andrewbusby/2019/10/23/fulfillment-as-a-service-why-the-future-of-delivery-is-in-the-cloud/?sh=6b83309d4af1

business.com editorial staff. (2014, 25 juni). Benefits of Using an Order Fulfillment Service. Business.Com. Geraadpleegd op 2 maart 2022, van https://www.business.com/articles/benefits-of-using-an-order-fulfillment-service/

Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

Thill Inc. (2021, 21 oktober). Fulfillment Center Pros & Cons. Thill Inc. Geraadpleegd op 5 maart 2022, van https://thillinc.com/blog/fulfillment-center-pros-cons/

3Pl, L. (z.d.).  7 tips for choosing a fulfillment partner. Logicos. Geraadpleegd op 5 maart 2022, van https://www.logicos3pl.com/en/blog/tips-for-choosing-a-fulfillment-partner

Lab, T. F. (z.d.). 8 Essentials When Choosing a Fulfillment Company + 8 Best Companies for 2021. Thefulfillmentlab. Geraadpleegd op 7 maart 2022, van https://www.thefulfillmentlab.com/blog/choosing-fulfillment-company

Roggio, A. (2011, 4 november). 5 Reasons to Consider Fulfillment Services. Practical Ecommerce. Geraadpleegd op 5 maart 2022, van https://www.practicalecommerce.com/5-Reasons-to-Consider-Fulfillment-Services

Global e-commerce expansion continues to redefine the shape and complexity of supply chains. It is no secret that the world of e-commerce has been booming for a while. Experts forecast that the world of e-commerce will only continue to grow. 

According to Phaneuf, US e-commerce sales are expected to cross 1$ trillion for the first time in 2022. This goal was not expected to be reached before the pandemic until 2024. The  cross global growth is forecasted to reach %1.06 trillion in 2022 (Phaneuf, 2022). 

See the graph below illustrating the leading countries based on retail e-commerce sales growth in 2022. Even large players such as the US and India eExpect a high growth percentage in 2022 (Statista, 2022). 

Figure 1(Leading countries based on retail e-commerce sales growth in 2022 – (Statista, 2022))

Still, there are problems, such as trouble maintaining cross-global compliance with trade regulations and applying data to work more effectively. Let’s take a closer look at cross-border e-commerce challenges and how your network partnerships and improved global compliance rates can help you do more with less.

What is Cross-border E-commerce?

Simply put, cross-border e-commerce is when sales occur and result in transactions across literal country borders. 

For instance, a Dutch clothing store that sells and ships their products to foreign Spain (crossing borders) through their online website is conducting cross-border e-commerce. This sale can also be conducted from their computer or mobile device through marketplace platforms such as Amazon or eBay. But, this is where the complexity begins to grow. It’s no longer enough to maintain compliance with regulations in the home country but all countries and all countries during which goods might move across roads or other infrastructure. 

How Prevalent Is Cross-border E-commerce Exactly? 

Cross-border logistics is growing throughout the e-commerce world in tandem with supply chain resilience, payment flexibility, and generalized market expansion. For instance, Dutch cross-border e-commerce has shown to be increasing significantly with 95% of Dutch consumers shop online nowadays (Emerce, 2022). 

The combined sales amount to 14.8billion euros. Dutch e-commerce infrastructure now includes  67.000 online stores alongside a strong, developed logistical network.

Potential risks to look out for

Most business activity comes with risk, including cross-border e-commerce. But cross global compliance risks can be broken into these three categories(Laubscher, 2021):

• Even a small number of disruptions can lead to lasting negative effects. For example, negative customer reviews have strong impacts on customer retention and prospect leads. Meanwhile, delayed orders result in lost profitability . Such issues are especially difficult for starting businesses with limited or relatively unknown brand reputations.

Many e-commerce businesses make the smart decision to outsource their cross-border logistics needs to a fulfillment service provider. Outsourcing reduces risk potential error and allows them to focus on their core business.

• Different, changing regulations are another risk. Proper conduct of cross-border e-commerce means your business must comply with the regulations of all affected countries. 

For instance, conducting  cross global commerce with many different countries, especially outside of the EU, inherently brings many risks. Changing regulations requires constant, extensive knowledge of what you can and cannot do when selling products. Small mistakes may result in heavily delayed shipments that spiral into accumulating negative effects. 

Before any cross-border transaction, know your compliance requirements. Further, scaling businesses often make use of external parties, such as consultancy parties, to ensure global compliance. Others completely outsource fulfillment procedures to cull all risks associated with cross- border logistics. 

• Fraudulent behavior is yet another risk. Bots (fake customers created by malware) might place tons of fraudulent orders. Also, use well-established, transparent payment service providers. 

Having multiple payment options also increases payment flexibility, and reducing the order threshold, such as minimum for international shipping, is a positive strategy. Inexperienced or limited payment service providers could lead to additional setbacks, and you might need to refund several orders.

Get Expert Help in Cross Global Compliance, Payment and More With ModusLink

Cross-border logistics is essential to the success of all brands and crucial to scaling your e-commerce businesses. Know the risks, stay tuned with industry regulations, and adjust your strategy accordingly. Or, do it all in one move by outsourcing to ModusLink. Talk to a ModusLink Expert today to get started with your own cross global plan and fulfillment strategy.

Bibliography

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Day, B. (2019, 3 juli). Cross-border commerce, waar moet je aan denken? Bluebird Day. Geraadpleegd op 13 maart 2022, van https://www.bluebirdday.nl/blog/cross-border-commerce-waar-moet-je-aan-denken

Ecommerce News Nederland. (z.d.). Crossborder ecommerce – Verkopen over de landsgrenzen. Ecommerce News. Geraadpleegd op 11 maart 2022, van https://www.ecommercenews.nl/tag/crossborder/

Emerce. (2022, 24 januari). E-commerce voorbij de landsgrens? Hoe je met cross-border selling begint. Geraadpleegd op 13 maart 2022, van https://www.emerce.nl/achtergrond/e-commerce-voorbij-de-landsgrens-hoe-je-met-cross-border-selling-begint

Keenan, M. (z.d.). Global Ecommerce: Stats and Trends to Watch to Succeed Internationally (2022). Shopify Plus. Geraadpleegd op 12 maart 2022, van https://www.shopify.com/enterprise/global-ecommerce-statistics

Laubscher, H. (2021, 15 september). Why Cross Border Ecommerce is the Future of Ecommerce. Ecommerce Platforms. Geraadpleegd op 14 maart 2022, van https://ecommerce-platforms.com/articles/cross-border-ecommerce-future-ecommerce

Phaneuf, A. (2022, 22 maart). eCommerce B2B Industry Statistics for 2022. Insider Intelligence. Geraadpleegd op 12 maart 2022, van https://www.insiderintelligence.com/insights/ecommerce-industry-statistics/

Statista. (2022, 18 februari). Fastest-growing retail e-commerce countries 2022. Geraadpleegd op 11 maart 2022, van https://www.statista.com/statistics/266064/revenue-growth-in-e-commerce-for-selected-countries/