Ecommerce companies are not exempt from ensuring that their supply chains need to run smoothly. All levels of operation are essential and if an e-commerce company is to succeed, then its supply chain should run without a hitch.
There are even more links to this chain than traditional companies as they have to focus on everything from raw material procurement, manufacturing, and distribution and all of these factors need to operate in sync.
E-commerce misconception
Many people believe that an e-commerce business is limited to a website and acting as a middleman between the supplier and the customer. However, a successful e-commerce operation includes product configuration, infrastructure design and development, logistics, payment gateways and supply chain management.
When the supply chain fails, customer experience is affected and the business’s growth can be harmed. Although the supply chain might look different for each e-commerce business, it still needs to be set up and maintained.
OpEx learning can provide e-commerce companies the skills to hone in on any inefficient part of their chain and improve on it. Their courses are designed to give businesses an edge over their competitors through innovation and problem-solving skills.
Keeping an eye on inventory
In traditional businesses, inventory is kept in personal warehouses and sold to customers. E-commerce works differently in that stock is not kept in their warehouses but rather in the inventory of larger wholesalers. This reduces the risk of the e-commerce business, as they opt for utilizing the drop-shipping model for inventory.
The risk, however, comes in when the process of buying a product and delivering it to customers is flawed. Shipping can sometimes take weeks, so strategies need to be developed by e-commerce businesses to make this element of the supply chain run smoothly.
Reverse logistics
Inevitably, e-commerce businesses need to cater for returns and refunds, which makes reverse logistics imperative for the success of the supply chain. Businesses have to plan for the movement of goods from the consumer back to the point of origin, which places an extra link in the supply chain.
Again, if this process is not managed well, customers could become dissatisfied with the service and opt to turn to other avenues for product delivery. If the return and refund policies are not clearly defined, or when the process is not efficient, customers could post negative reviews, which could also harm the company's image and reputation.
Product availability
Statistics have shown that a product availability of 95% is sufficient for an e-commerce website to remain effective. If a customer cannot find a product, they will quickly find another store that has the product. Customers feel that online shopping should mean that stock is readily available because floor space is not an issue.
Consequently, e-commerce businesses need to place a high value on supplier management. When products are no longer available, the webmaster should remove the outdated products immediately. When false hope is created, customers can become impatient and irritated, resulting in bad reviews again.
Cost reduction and global trading
A key benefit of e-commerce is that it is cost-effective. Many companies opt for an online shop because they can reduce the costs of their business dramatically. However, when supply chain management is not done properly, then costs can increase. Every aspect of the supply chain needs to run smoothly for the business to be profitable.
It also enables the business to operate on a global scale by importing raw materials from anywhere and exporting finished products to any country. By managing delivery times well, customers will never feel frustrated and the business will grow even more.