Online and digital shopping is booming in South Africa, and consumers are becoming comfortable with buying a much wider range of products online.
Once a customer orders and pays for products via an e-commerce website, the “non-digital” aspects of the transaction have to kick in. It’s up to your business to fulfil the order, locating, packaging and delivering the goods within the promised time.
If you have an e-business, you may choose to handle inventory storage and the order fulfilment process in-house. Alternatively, it may make more sense to outsource these back-end logistics to a third-party fulfilment and warehousing specialist.
Importance of not underestimating costs
A secret to success for e-commerce businesses is learning how to ship their products profitably.
It’s easy to underestimate the required capacity and the costs that go into storing, packaging and shipping items. This applies especially in e-commerce, with customers who’ve come to expect free or low-cost shipping, as well as very fast turnaround on their orders.
When to opt for third-party logistics (3PL)
Third-party fulfilment and warehousing typically has benefits for any e-commerce business that’s already making money, with reasonably stable cash flow.
It can result in cheaper, overall shipping rates and faster, more reliable deliveries to your customers. It can also free your business to focus on growth.
Outsourcing may also be the answer if:
- you’re too busy to take on the back-end of the business
- you don’t have ready access to the required space, equipment and delivery infrastructure
- your orders are seasonal or fluctuate significantly throughout the year.
When third-party logistics may not be suitable
Third-party logistics is less likely to suit your e-commerce business if:
- attractive, highly customised packaging – for example, with personally signed cards or elaborate decoration – is one of your selling points
- you use specialised equipment to customise products – for example, adding customers’ names or other unique details to items
- your business is a startup, still very small or struggling with limited cash flow; in this case, it makes sense to cut costs by handling as much as possible in-house.
Potential benefits of third-party fulfilment and warehousing
You can use third-party services as and when you need them, in accordance with seasonal and other fluctuations in demand. This may make more sense than investing heavily in equipment and capacity that won’t be used all the time.
You only pay for the space and services you need. Also, with a well-established logistics company, you’ll benefit from economies of scale, with cheaper storage space and shared transportation costs.
Reduced need for staff
With outsourcing, there’s no need to recruit, train and manage the large staff contingent required for receiving, inventory management, order processing and deliveries.
Logistics companies specialise in getting items where they need to go, and their success depends on their efficiency. Depending on the locations of their warehouses, they may also be equipped to store your inventory close to your main customer bases.
How ACT Logistics can help
We offer competitively priced e-commerce warehousing and fulfilment services across South Africa.
At ACT Logistics, we can:
- store your stock in clean, secure facilities
- pick and pack goods for distribution
- deliver goods to your customers or partners, quickly, professionally and affordably
- provide our logistics and distribution services under your own brand
- offer tailored e-commerce courier solutions designed to minimise costs and increase efficiency.
We also provide parcel-tracking technology that allows for accurate tracking in real time, from any internet-connected device.