E-Commerce Logistics: Background & Considerations for Manufacturers & Distributors

A PUBLICATION OF CERASIS

TABLE OF CONTENTS Introduction

1

eCommerce Logistics Background and What It Is?

2

What are the Major Considerations for Manufacturers & Distributors for eCommerce?

Conclusion

INTRODUCTION

INTRODUCTION What is logistics and how does it apply to ecommerce? As e-commerce continues its rapid growth into virtually every market sector, retailers are anxious to expand their presence online to capture this market share. For decades, consumer products have been distributed to retail stores in bulk, via pallet loads and cases. Now, online ordering is pushing brick-and-mortar retailers beyond this traditional supply chain infrastructure. Traditional fulfillment—encompassing receiving, putaway/storage, picking, transport through the distribution center (DC), sortation, value-added services, packing, and shipping—is a poor option for handling the needs of e-commerce. To compete in this virtual arena, picking, packing, and shipping single items and small volume orders to consumers is the name of the game. Orders require delivery to customers—not weekly or bi-weekly as with retail stores, but typically within 24 to 48 hours. Add to this complex fulfillment environment the demands of continual stock-keeping unit (SKU) proliferation. Internet retailers need to support an ever-increasing selection of merchandise that typically includes fast-moving items and many very slow-moving items. How these SKUs are picked and handled can present two very different operations. From the moment the online order is placed to when it is picked, packed, and shipped, every step in the process must be handled efficiently, consistently, and cost-effectively. In e-commerce, the distribution center provides much of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfillment center— customer satisfaction has to be a critical priority. In this first part of 2 e-books, we will cover the background of what is e-commerce logistics and the considerations manufacturers and distributors must make before they start selling & shipping online.

Chapter One eCommerce Logistics Background and What It Is?

E-Commerce Logistics: The Evolution of Logistics and Supply Chains from Direct to Store Models to ECommerce E-Commerce Logistics Models In developed economies, e-commerce logistics represents the latest big driver of change in logistics and physical distribution networks, which have evolved substantially over the past 40 years or so. Currently, it remains the case that as ecommerce continues to grow, most shippers, particularly multi-channel shippers, are still only just beginning to work out what this will entail for their distribution network infrastructures. Let’s Take a Look at the Evolution of Logistics From a distribution property perspective, this evolution has passed through various general phases and very broadly in the timeline as follows: • • • •

In the 1970s, most retail stores were replenished by direct deliveries from suppliers or wholesalers. In the 1980s, retailers started to centralize their store deliveries through new distribution centers which they controlled. In the 1990s, global sourcing (for non-food products) took off, with many retailers developing import centers to receive and process mostly containerized imports. From around 2000, e-commerce began to rapidly expand with pure-play (internet only) retailers leading the way in establishing e-fulfillment distribution networks

E-Commerce Logistics in Developed Markets In developed economies the growth of online retail has been stronger in sectors such as fashion, electrical and ICT goods, as opposed to food. In the former, where purchased items are typically distributed via a postal, parcel or freight network, e-commerce logistics models have led to a wave of new demand for four distinct types of logistics functions:

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Mega e-fulfillment centers where the merchandise is stocked and picked at item level. These facilities, which are either operated by the retailer or a logistics service provider, are typically 500,000 sq ft to one million sq ft in size, or even larger. They often operate 24/7. Parcel hubs/sortation centers which sort orders by zip or post code so that they can be delivered to the relevant parcel delivery center for final delivery to the customer’s home or designated collection point. Parcel delivery centers which handle the ‘last mile’ delivery to the customer Seamlessly integrated technology where shopping carts connect via API, web xml or some other connection to a transportation management system so shoppers are getting the exact price quote of shipping of larger items more suited for less than truckload modes, as these technology products for logistics, such as a TMS, must accomplish along with the shopping cart for better management: 1. Ability to organize and track shipment no matter what mode 2. Online order status and documentation 3. Online dispatch documentation and invoice, such as a bill of lading and freight invoice 4. Auto reminder for payments 5. Seamless interface with existing SCM or ERP system 6. Online alerts for critical information via text or mobile 7. Information systems reports on past data analysis, delivery history, etc.

These types of e-commerce logistics systems, based on the above considerations, ensure the following benefits to shippers, customers, and 3PL service providers: • Improved communication • Transparency into the supply chain • Improved customer satisfaction • Cost reduction • Improvement in efficiency • On-time delivery We will go further into the benefits of setting up an effective e-logistics structure and operation in this ongoing series. However, these are the top things to consider when looking to set up a program. With E-Commerce in the Equation, Let’s take a Look at Supply Chains, Then and Now (AKA, The Amazon Effect) It’s been close to 19 years since Jeff Bezos opened his online bookstore from a 400square foot garage in Seattle. Today, Amazon is one of the largest companies in America, with operations across the world and a stock valuation greater than most Fortune 500 companies. The concept, initially, was simple: to do business exclusively online, offering customers the convenience of shopping from home and giving the seller little overhead costs. Since ecommerce was born, everything has changed: the proliferation of the Internet into daily life; the look and feel of the online space; the speed of internet connections; even who is getting online and how they’re getting there! Convenience and low prices were the driving forces for ecommerce in the early days. But today, with ecommerce retailers catering to every kind of product, service, and shopping experience, the challenge has shifted. Here is a brief look at how direct-to-consumer order fulfillment has evolved over the years to match those challenges. So, How have Supply Chains Evolved in an E-Commerce Logistics World? Then: Supply chains handled old-school, brick and mortar retail, where products arrived in warehouses in bulk, were moved around in pallets and selected by the case, and were shipped out to store in bulk.

Now: Ecommerce poses the unique challenge of inventory arriving in bulk, but requires much care from there – receiving bulk orders, then inventorying and picking those SKUs as individual products. Therefore, ecommerce retailers have to find a way to standardize and synchronize business processes to have real-time access and insight to inventory movement. Often, with dozens of suppliers, multiple warehouses, and an extensive number of sales channels, the chances of a misplaced order are much higher. However, order fulfillment technologies have helped integrate the front-end and backend of online retail. The back-end process is now a collaborative effort thanks to automated software and real-time fulfillment data. The alignment of important touchpoints in the supply chain has reduced inefficiencies and had helped identify redundant processes. Heck, we even have robots that will pick inventory for us AND move it around the warehouse! How has Freight Shipping Changed in an E-Commerce Logistics World? Then: In the early days of e-commerce, it was about the convenience of ordering a product from home. No driving to the mall and no waiting in line, just living life and waiting for the package to be delivered to your doorstep. Shippers still used snail mail and phone calls to communicate with customers and order delivery times were in the weeks, not days. Free shipping quickly became a tool that brought in competitors’ customers, since there weren’t many carrier options, no additional costs (such as sales tax) existed, and order delivery times were slow anyway. Now: E-commerce merchants collect sales tax, fuel charges are much higher, and the ever-popular free shipping is the farthest thing from free to retailers. Other than giants like Amazon, not many retailers have the resources to operate multiple distribution centers in strategic locations and instead are turning to third party logistics service providers to reach their customers. The evolution of multiple shipping options allowing customers more control over the delivery process than ever before, expanding from only small package from USPS, UPS, and Fed Ex to now get larger items via less than truckload modes. It’s no longer about being the fastest rat in the e-commerce delivery race. Instead, it is about being able to deliver an order at a time frame and price point that customers want.

What You Need to Know About the State of eCommerce Logistics

Today’s logistics empire is not your grandfather’s or even your father’s logistics operation. Consumers are expressing an unprecedented amount of power through eCommerce, and in fact, eCommerce logistics is growing increasingly reliant on small parcel and package delivery options daily. Meanwhile, eCommerce is catalyzing significant changes in retail real estate as more companies vie for warehouse space and transportation services to meet a growing number of online orders, explains Alexander Frei and John Morris of Area Development. But, the changes are not limited to warehousing, and you need to understand how they will impact the modern supply chain. Warehousing Expansion Is a Must. In 2011, eCommerce represented a fraction of overall retail operations. But, by the end of 2012, eCommerce logistics had grown to 5 percent. Today, eCommerce is the primary driver of small package logistics. More importantly, small packages make up $82.2 billion of the logistics industry, and that number will only grow from here. As a result, more incoming orders and greater order diversity naturally requires increased numbers of warehouses. Fortunately, some shippers have a plan for enhancing warehouse usage. Warehouses Renew Focus on Inventory Control. The simplest way of making a warehouse run efficiently is by managing inventory better. At the same time, more warehouses only mean more products can be stored. They do not mean more packages can be sent. So, the only solution to better managing inventory for eCommerce is by changing the internal layout of a warehouse, reports Inbound Logistics.

Employees need to be able to access a variety of products with the shortest travel distance. Consequently, warehouses are creating new picking procedures and using advanced software systems to automatically identify what items should be picked in a given order. For example, some warehouses are keeping a huge variety of products within small areas of a warehouse, allowing for the rapid picking and packaging into small parcels. The short bin-to-package distance enables workers to pick more products, and in some cases, robotics are being deployed to further enhance the number of picked orders. As a result, warehouses can ship more packages. Predictive, Real-Time Analytics Are King of eCommerce Logistics Strategy. Analytics are critical to helping warehouses and shippers determine the fastest routes to get products to customers. However, actual transportation represents a small portion of areas that need to be analyzed. For example, the location of distribution centers impacts the distance between warehouse and consumer. Yet, warehouses cannot be conveniently located in every region, or can they? The eCommerce consumer expects free shipping, fast delivery, and hassle-free returns, asserts the Eli Broad College of Business at Michigan State University. Therefore, traditional warehouse and distribution center models are being abandoned in favor of smaller, localized regional centers to handle specific markets. But, this brings back the fundamental problem of small packages that many shippers experience; small package shipping tends to be labor-intensive and costly. Logistics Providers and Truckers Move to 3PL-Based Operations. Third-party logistics providers (3PLs) offer significant advantages to shippers and retailers engaged in eCommerce. In addition, many retailers lack the resources and equipment to provide low-cost shipping and returns processes to their eCommerce consumers. As a result, shippers and retailers have turned to 3PLs to provide expanded resources, web analytics, increased visibility of shipments, handling of web orders and web portal needs, and technology-based picking for eCommerce orders, such as robotics and low-energy sensors.

Existing fleets are also stretched to the breaking point. The capacity crunch seems to be only growing worse, and the major carriers have already taken steps to increase rates for 2016 and beyond. Yet, dimensional pricing models are starting to make shipping highvolume, low-weight products costlier than high-weight, low volume products. Unfortunately, the only way to stay competitive with the major carriers is by having access to discounted, negotiated rates through a 3PL. International Shipping and Fulfillment Processes Are Getting More Complicated. eCommerce logistics is not just a big deal for shippers and retailers in the U.S. According to Athira A Nair of Your Story, eCommerce in India is expected to be valued at more than $220 billion by 2025. Yet, the whole value of the logistics empire in India as of today is only $300 billion, with an annual compounded growth rate of 12.17 percent until 2020. Consequently, the overall value of the logistics market in India could easily double in size by 2025, and other markets around the world show similar trends, explains Patrick Burnson of Logistics Management. So, the problem starts to arise when more companies seek to keep shipping costs down in an international eCommerce market.

Fortunately, 3PLs have large global footprints, capable of organizing and adapting to the growth of eCommerce logistics across international borders. This will help to avoid customs’ delays and problems when moving across international and geographic boundaries. Since the majority of online sales are shipped via small package, having the ability to convert small package to LTL or to full truckload is essential to keeping up with the demand and pressures of lower prices. In other words, the vitality of a 3PL is necessary if today’s eCommerce businesses hope to survive throughout future growth of online sales and distribution. eCommerce logistics is only going to continue to influence logistics operations around the globe, and many businesses will unlock huge markets and tap into new resources through the expansion of eCommerce. However, these businesses need to understand the current state of logistics in eCommerce in order to prepare for the ecommerce needs of the future.

Why OmniChannel Solutions are Needed in Shipping & Logistics to Meet Consumer Demand

E-commerce and omnichannel solutions are rapidly becoming the next frontier in the use of the Internet of Things and better order fulfillment processes. When the Internet first arrived, the idea of waiting for an extended period to receive a product was great, asserts Gordon Hellberg of Material Handling and Logistics. It opened up doors and gave millions access to products that were never available in local areas, regions, or other countries. However, Amazon is shaking up the mix by seeking to make today’s e-commerce practices obsolete, and shipping and logistics providers need to understand why.

Renewed Focus on Last-Mile Delivery and Multiple Order Fulfillment Options The use of omnichannel solutions to increase sales through all accessible means, which includes e-commerce, social media sales, printed advertising and catalogs, and brick-and-mortar stores. With more products coming in, the pressure will be on distributors and order fulfillment centers to create warehousing space and eliminate wasted space wherever possible. According to Patrick Burnson of Logistics Management, small facilities and storefronts may actually become miniaturized order fulfillment centers, reducing the length of time for order processing and enabling last-mile delivery within hours, if not minutes. Alternatively, this model will be applied to enhance the use of store pick up, which has been used extensively by Wal-Mart to create a comprehensive omnichannel environment. Customers have the option to have products shipped to home or the store, and this eliminates any confusion about how much space is needed within each store. Furthermore, this model of e-commerce and omnichannel solutions has enabled Wal-Mart to optimize load consolidation processes and reduce costs across the organization.

Consumers are also expecting more of manufacturers and shipping companies. They want products delivered, installed, and checked for quality, which will generate a new type of shipping process that requires certified technicians to be part of the delivery and customer service experience. Similarly, products will be relocated to be as close to customers as possible, which will naturally lead to an increased use of technologies, such as 3D printing. E-Commerce & OmniChannel Solutions Continue to Drive Competition

The push toward a more efficient, data-driven supply chain will result in more competition among companies. As companies take steps to achieve lower rates, by utilizing third-party logistics providers (3PLs), the competition will further increase. This relationship will become more dependent-based, and rates will continue to decline even though the actual demand on the system will increase slightly. This lead to benefits for today’s e-commerce retailers and those in the B2B industrial space who may have common orders.

For example, small-business e-stores have managed to create environments that allow customers to see inventory in real time, reducing problems with excessive ordering. Consequently, the number of shipments will decrease, but the cost will need to stay competitive with Amazon’s offerings. Omni-Channel Solutions Will Expand to Include and Use New Technologies Newer technologies make up one of the most exciting parts of the supply chain to watch in 2016. Shipping and logistics providers will turn to technology to achieve the impossible, reports Peter Kinds of ControlPay. This will include the use of autonomous vehicles and drones for delivery, and the reverse logistics supply chain will also need to deploy new technologies. In reverse logistics, returns will be one of the key areas in which omnichannel solutions will adapt. For example, a customer who simply ordered the wrong product may actually be close to another customer who ordered the incorrect, delivered item. To shipping providers, verifying the product has not been opened or tampered with will be the key to reducing unnecessary delays and transferring the product to the nearest appropriate party. In our example, last-mile delivery services could be used to pick up the product from customer A, check it for quality, and deliver it to customer B on the next block. As a result, the provider does not incur any additional costs for reverse logistics as the respective driver would have already been in the area. Although this practice may not necessarily be in motion today, it represents how much the supply chain will change from what is considered typical processes to keep up with the growing demands in an e-commerce-driven world. Shipping and Logistics Providers Seek to Attract Millennials Millennials are the paradigm of a digital generation. They are aware of what’s happening in the world more than any civilization throughout history due to social media, and they will be the source for future positions within shipping and logistics providers. Regardless of how they’re portrayed on late-night television, millennials are an asset to the industry, and they will value corporate responsibility, explains Todd Miller of Sterling Partners.

E-commerce must maintain end-to-end visibility to be successful, and this degree of visibility is the hallmark of all corporate responsibility initiatives. Consequently, the need to implement better analytics and real-time management resources to ensure everything is reported and delivered accurately will grow in tandem. With the ecommerce and omnichannel industry set to grow by 9.69 percent in the next four years, shipping and logistics providers cannot afford to ignore the demands of millennials any longer. The modern supply chain is entering adolescence. Shipping and logistics providers are carving their paths for how to be successful, and many lessons are being learned along the way. E-commerce and omnichannel solutions are like final exams in adolescence. They are frightening, and they will create plenty of stress. However, they are critical to ensuring the success and development of organizations into prosperous aspects of society and the economy.

The Rise of Logistics Technology in E-Commerce

Logistics technologies are changing how modern retailers operate. Huge warehouses are being built to house an infinitely higher number of products. Home Depot is revamping their distribution center strategy to include a host of regional centers, and logistics providers stand to reap significant profits from increased collaboration in the marketplace. However, the rise of e-commerce will naturally lead to greater focus on logistics technologies, and you need to understand how this increase the role of logistics technology in e-commerce in the global economy. What’s Driving Investments in Logistics Technology in E-Commerce? Two primary forces are contributing to the need for logistics technology in ecommerce. Both of these forces are actually just the cascading events from engaging in e-commerce, and you need to think about what they mean to today’s shippers. E-commerce Rises to Power. E-commerce is growing at astonishing rates. More customers are able to shop online from anywhere, and the number of mobile devices is climbing as well. As a result, companies are doubling down on their efforts to meet the surge in demand and across global omni-channel sales. By 2017, e-commerce will generate $370 billion in the U.S., and the compounded annual growth rate is expected to stay at or above 10 percent over the next half-decade, reports William B. Cassidy of JOC.com.

Globalization Promotes International Shipping and Logistics. The globalization of logistics technology in e-commerce makes it an ideal venture for international shippers. While some companies may operate in-house logistics enterprises, such as Home Depot with its 80-percent distribution capacity for omnichannel sales, many companies will turn to logistics providers to achieve further cost savings. Meanwhile, some companies simply lack the resources to ship products overseas, and logistics providers will need to increase technology investment to push today’s fleets beyond their current capacity.

Benefits of Logistics Technology in E-Commerce. Logistics technologies have huge untapped potential for improving the e-commerce landscape. By nature, logistics providers have focused the majority of their resources of developing the most cost-effective solutions for their clients over years. As a result, they are perfected poised to provide the services needed as the world’s economies come together to increase e-commerce sales and activity. New Business Models Reduce Operating Costs.

Logistics providers focus on revamping existing business models to create a productive, cost-savings oriented environment, explains Ricard Coelho of TAS Portugal S. A. Furthermore, companies with a surplus of services, such as extra trucks, can benefit by turning their existing logistics capabilities into sources for other logistics providers. In other words, these collaborating entities can both achieve profits by simply combing resources through the use of a third-party logistics provider (3PL). Better Control of Order Fulfillment.

The order fulfillment processes of e-commerce require a system capable of syncing across multiple systems. For example, Nutrisystem uses a 150 unique SKU system to reduce overhead and ensure orders are sent out as soon as possible, reports Inbound Logistics. Furthermore, connected systems enable automated order tracking and realtime analysis of all systems at any time, which reduces unnecessary delays and errors during fulfillment. In fact, control from these information-visibility systems directly leads to a more fluid inventory pipeline and better customer satisfaction.

More Focus on Value-Added Services to Increase Revenue. Many businesses lack the capabilities to increase customer satisfaction, reduce errors in order processing or catch overbilling issues. Many of these problems are simply the result of small-business processes, but the shift toward logistics technology in ecommerce is making these minor problems major deterrents for customers. Consequently, logistics technologies have grown to include a host of value-added services, most notably auditing services, to ensure small business have the tools and resources available to continue growth in what is becoming an e-commerce-based market. Greater Conversion Rates for Businesses. Consumers are also looking to business for benefits in every purchase. How quickly does it take to get the product? Is there a shipping cost? What is the returns policy? These questions for vital to consumers, and they help determine if a consumer becomes more than online window-shopper. The conversion from online window shopping to a customer is not taken lightly, and businesses need to pull out all the stops to promote this conversion. For example, a customer is less likely to make a purchase if the same item can be purchased on Amazon with free shipping. As a result, logistics technologies are needed to give small businesses the opportunity to assess a variety of modes of transit to reduce shipping times and virtually eliminate the cost of shipping for the customer. Obviously, it would be ill-advised to believe logistics systems promote free shipping. But, the key to making this work is by creating an environment where the overall profits of sales outweigh the costs of shipping products on the part of the seller, which is actually the process seen when retailers offer “Free Shipping on Orders Over $X!” Ultimately, more orders equate to more profits, so “eating the shipping cost” does not seem like a major expense.

Synchronicity Among All Systems. Customers want their orders as soon as possible. Amazon’s hopes of making twohour deliveries possible attest to this notion. As a result, logistics technologies must be capable of handling reordering or rerouting of goods automatically to ensure the supply chain can get products to customers as quickly as possible. In other words, products to be more diverse and distributed to optimize the e-commerce supply chain. Additionally, the volume of orders and products shipped requires synchronicity across warehouse management systems, transportation management systems and existing analytics systems. However, synchronicity is even better when all of the needs are met from within the same dedicated system, such as the Cerasis Rater. Logistics technology investments represent one of the most significant explosions of growth in the history of e-commerce, and through logistics technologies, retailers will be able to meet customers’ expectations and provide unparalleled assistance and guidance in the shopping experience. By understanding these facts, businesses will thrive in the future of an increasingly global marketplace.

The Expanding Use of E-Commerce for Manufacturing Companies How the Internet has transformed the manufacturing and order fulfillment process is no small secret. However, the realm of e-commerce for manufacturing companies is rapidly growing, and modern manufacturers are starting to see a shift from businessto-consumer (B2C) sales to business-to-business (B2B) sales. Manufacturing and shipping process have historically focused on producing a product, sending it to the store, and having a consumer purchase the product. However, e-commerce has created an era in which the B2B and B2C side of e-commerce are merging. In fact, ecommerce platforms are expected to grow to more than $2 billion by 2019, at a compound annual growth rate of approximately 12 percent, asserts Peter Sheldon and Michael Yamnitsky of Forrester Research. Take a look at how changes in e-commerce will impact manufacturers in the coming year. What's Driving the Need For Better E-Commerce For Manufacturing Companies? Millennials are becoming a dominant factor in the manufacturing space, and millennials make up 34 percent of all sales professionals. This outnumbers the baby boomer population in sales by five percent. Additionally, consumers are starting to demand a personalized, low-cost, and reliable solution to their needs. Since the Internet has inherently given birth to the age of smartphone, more consumers are looking for faster, customer service-laden experiences. Yet, this is a tricky ideal as expanding customer service would seem to contradict the self-service demand in e-commerce, explains Ian O’Brien. Essentially, consumers want to be able to reach customer service as needed, but consumers want to see and experience a platform that does not really need any customer service. Consequently, this goes back to the level of content in an ecommerce for manufacturing platform.

E-commerce for manufacturing companies is also on the rise thanks to the general growth of e-commerce expected to continue through 2018 as shown in the graph below.

Content Will Become Kings Retailers and companies have already experienced the potential pitfalls of poor quality content on their online sales channels. In fact, Google penalizes businesses, individual parties, and other organizations who fail to deliver a satisfying, non-spun (“original and thought-provoking”) online experience. The self-service side of an e-commerce for manufacturing platform must operate efficiently and reflect the value, resolve, and knowledge of the respective company. As explained by Bob Barr, content management will become one of the most important aspects of a manufacturing e-commerce platform. Although much focus relies on differentiating product catalogs and information, which may number into the thousands, if not tens of thousands, part of the issue in content management revolves around how it affects the customer service experience.

For businesses in the B2B market share, more businesses are looking for ways to operate and make transactions between other businesses in the digital space. As a result, the number of e-commerce-based transactions from the manufacturing sector has grown exponentially. This lends itself to the need for a self-sufficient platform, which forms the basis for providing and delivering information to potential buyers. Cloud-Based Systems Will Help to Merge Existing, Legacy Systems With Newer Technologies Historically, manufacturers have use many different systems in the production and shipment of a given product. These systems included an enterprise resource planning system, a transportation management system, a warehouse management system, and a system for managing and tracking returns and refunds. Unfortunately, many of these systems were not originally designed to operate in tandem with each other, and communication between outdated systems is nearly impossible. However, APIs, Integration, the Internet of Things, other connection services and cloud-based technologies are helping organizations migrate from legacy systems to an interconnected, smart, and predictive systems. Ultimately, this will help manufacturers thrive in a digital space, especially as the role of competition becomes even more pronounced. Take a moment to think about traditional competition and competition in the online marketplace. Traditional competition left your consumers with few options. However, modern competition, fueled by a growing number of entities in e-commerce for manufacturing solutions, makes your competitors from around the world a potential threat to retaining and acquiring new customers. As a result, an existing manufacturer must be willing to take many steps to merge with the potential offerings of other businesses, such as those in the aftermarket service parts supply chain, to effectively retain and gain new customers. The Aftermarket Parts Supply Chain Will Grow Reliant on E-Commerce Most modern products are not designed for one-time use. This can be exemplified by viewing how manufacturers must create parts for the automotive industry. In a report by Frost & Sullivan, asserts Alan Sage, 10 to 15 percent of all global sales parts for automotive aftermarket purposes will be used and processed in e-commerce for manufacturing platforms by 2025. As a result, manufacturers face two potential results: • •

Partner with distribution centers, dealers, and consumers in the goal of creating a superior e-commerce solution. Cut out the other parties, and risk losing a significant share of the market.

Although the service parts supply chain would seem to survive a non-e-commerce solution, one critical aspect remains, automotive service centers and technicians will probably be looking to the competitors who do offer an e-commerce solution for the purchase of parts for needed repairs. Ultimately, avoiding the merging of the manufacturing and distribution processes would be a travesty for manufacturers. E-Commerce for Manufacturing Will Become Increasingly Omnichannel in Approach and Execution Customers do not want a partially fulfilling experience: they want an over-the-top, noholds-barred experience in e-commerce. Manufacturers must consider how an omnichannel experience impacts e-commerce. An omnichannel solution focuses on connecting an online and a brick and mortar establishment into a single, unified solution. For example, Walmart allows customers to purchase products online, which may be directly from the manufacturer in some cases, pick up these products in the store, or even return them if a problem arises. Walmart probably represents one of the most effective omnichannel solutions in e-commerce in the world. B2B e-commerce spending will exceed $1 trillion dollars by 2020, elucidates Oren Ezra. An omnichannel solution is practically impossible without e-commerce, and conversely, ecommerce for manufacturing is difficult to manage without an omnichannel solution. Customers want to be able to have options and maintain accountability with the manufacturer at practically any stage in the shipping and order process. Ultimately, an omnichannel approach allows a business to gain additional trust from the consumer, which results in increased revenue, better customer satisfaction ratings, reduced costs, fewer mistakes, better productivity for employees, and less rework. Obviously, omnichannel solutions will naturally lead to reduction in the number of employees in sales positions. However, this means more heads will be available to work on boosting production, which results in subsequent positive experiences for all involved parties. E-commerce for manufacturing companies is changing how businesses do business with other businesses. The idea of always selling the traditional way of manufacturing to retail only is dying, and businesses need to embrace the idea of working in a multi- or omnichannel environment, to include e-commerce, in order to achieve a positive growth and return on investment. Consumers are growing more powerful through social media and the Internet, and manufacturers must be ready and willing to adapt to their demands in 2016. Failure to do so would be a futile effort in a world where a dead smartphone is tantamount to a wasted day.

[Infographic] The Impact of the Internet to Implement eLogistics With the emergence of new digital technologies and real time information update and exchange through web-based devices, eLogistics have transformed the traditional methods of transportation and trade logistics with integrated applications and the use of software means to enhance the commercial trading process. Several technologies are being developed to conduct international transactions and keep track of their shipment, while negotiating with freight companies, retailers and suppliers, the following come into play for the effectiveness of eLogistics:

Freight Forwarding Management Systems It is necessary to implement web-based tracking of your shipments which also makes it easier to handle complicated international shipments and keep track of their locations and the time duration which they would eventually take to reach their destination. Data Interchange in Real Time The on-going data exchange in real time which involves the transmission of trade and custom documents digitally among different stakeholders of the supply chain and logistics so that all the necessary logistics transportation and make haste to reach their destinations and deliver without causing any delay for the international trade business. Transportation System It is necessary to implement effective transportation system and network by large distributors who handle shipments in high bulk volumes for both domestic and international shipment traffic. With an electronic digital system; transit time and duration can easily be calculated, stakeholders can assess an overall transportation strategy to make amendments. In this way, stakeholders can make the best use of the available information and decide upon preferred carriers, trucks or trailers based upon the shipment specifications, destination and freight charges. Logistic industry experts have termed the use of internet for eLogistics as an effective and efficient medium to exchange information among different stakeholders and thus have increased the productivity of logistics solutions which also reduces the overall additional transportation costs. Integrating eLogistics for the Supply Chain Process

The use of eLogistics in the supply chain process can transmit and exchange information not only to the carriers but to business managers, suppliers, clients, retailers and freight forwarder. It simplifies complicated processes for handling complicated bulk shipments and consolidates transportation carriers to adapt easier routes and easily track and trace their whereabouts and maintain the communication process for custom documents, bills, certificates, email documents and transportation carrier rate quotations and schedules.

Warehouse Management Processes ELogistics also simplifies processes for storage, stock keeping, movement and replenishment of the shipment load, keep track of mixed items, locate difficult shipment orders and the reporting and counting of inventory. With proper SKU reference coding and integrating the information software can make it available for other stakeholders with the use of internet. Ultimately, the impact of internet and eLogistics has made trade and logistics complicated processes much easier and simple for freight management services, where business managers link all important aspects of the supply chain process and make necessary considerations for the best practices in logistics or freight services.

Top 11 Trends in eFulfillment Technology

In 2015, global eCommerce generated more than $6.6 trillion, reports James Keller of Internet Retailer, and 2016 is shaping up to surpass last year’s records. Meanwhile, major payment processing companies, such as Visa, and dominant shippers are turning their attentiveness to improving global eCommerce this year. But, retailers of all sizes are furthering the goals of eCommerce by enhancing the overall experience for sales professionals and customers. Take a look at some of the trends in efulfillment and how they will shape 2016. Here's the Top 11 Trends in eFulfillment Technology 1. Replacement of Old eCommerce Platforms. Older, antiquated eCommerce platforms are being replaced to make way for the efulfillment burden to of tomorrow. More customers will be engaged in eCommerce this year than ever before, and retailers are seeing a definite shift in the number of customers making online purchases. As a result, older systems will need to have the ability to adapt to surges in eCommerce demand, which inherently warrants increased collaboration among technologies in warehouses and among shippers. 2. More Use of SaaS Systems for eCommerce. With the growth of newer, better systems for managing eCommerce, the use on-site software suites will be replaced by software-as-a-service platforms. This will further bridge the divide between cloud technologies and the online shopper. Consequently, these systems will allow for automated updating and unsurpassed cloud-computing capabilities, promoting a faster, more efficient supply chain.

3. Greater Use of Integrated Marketplaces for Third-Party Sellers. Third-party sellers will become more heavily involved in eCommerce thanks to online marketplaces like Amazon increasing the visibility of small businesses, asserts Bill Briggs of Internet Retailer. As a result, the eCommerce platforms of 2016 will need to handle order fulfillment for a variety of vendors and even more customers. 4. Contextual Shopping to Enhance Customers’ Experiences. Competition in eCommerce is more personalized than ever, but customers are growing weary of tracking login passwords, entering rewards numbers and additional stresses. As a result, the online shopping experience will evolve to include contextual ad displays and offers without necessarily subscribing to a company’s clubs and rewards circles. The only way to achieve this goal will be through advanced predictive analytics systems to better track trends for market-specific areas and actions, promoting a more seamless connection between brick-and-mortar stores and online shopping environments. 5. Increased Customer Engagement and Outreach. Today’s companies must also be willing to reach out to customers in new ways. The days of email marketing are dying, and today’s customers want to engage with companies before experiencing a problem. As a result, efulfillment centers will need to become more active and helpful to customers before purchases are actually made. This will also help to drive sales and encourage competition among businesses. 6. Stronger Focus on Mobile Technologies and Mobile Development. Businesses that avoid using mobile technologies, especially apps, to reach customers will fail. Not only are customers demand anytime orders and assistance, but they expect to have access to apps and websites optimized for the mobile experience. 6. Stronger Focus on Mobile Technologies and Mobile Development. Businesses that avoid using mobile technologies, especially apps, to reach customers will fail. Not only are customers demand anytime orders and assistance, but they expect to have access to apps and websites optimized for the mobile experience.

7. More Emphasis on Real-Time Analytics. Real-time analytics will continue to replace traditional analytics through 2016. The days of reviewing historic data are irrelevant, and more businesses will need access to the most accurate, real-time data to make informed decisions. This may include potential delays during shipping, cost of shipping and changes in the political climate. Yet, the true applications of analytics can expand to virtually any issue a shipper or warehouse may be subject to. 8. Transition to Sustainable Operations. The modern shopper is also vitally aware of what businesses are and are not using green technologies to promote a more sustainable future. As a result, modern businesses will need to increase the visibility of operations to customers and ensure green technologies are being used wherever applicable. 9. Multi-Order eFulfillment Grows Critical. Since emerging markets and global eCommerce have skyrocketed, players in eCommerce growth will need to avoid the isolation of working with single-package types, reports Tara Sporrer of Multichannel Merchant. In other words, today’s businesses will need to combine small package, less than truckload and full truckload capabilities to push efficiency beyond the capacity of traditional systems. 10. Greater Options Through More Localized, Regional Centers. The age of the centralized distribution center is over. With a surge in new customers from new or aging markets, localized, regional centers will be required to help shippers and retailers get products to customers faster and at a cheaper cost. Ultimately, having a wider selection of products in locations nearer to the customer will help keep shipping costs down, especially as UPS and FedEx increase costs throughout the year.

11. Collaboration to Expedite Shipments. For many warehouses, the idea of competition will change drastically throughout the remainder of 2016. Avoiding interaction and collaboration with competition are leading to a resurgence of monopolies and increased costs to the customers, which could only serve to harm the industry. However, more companies are realizing significant returns can be achieved by simply working with competitors to keep prices low for the customer. As a result, the increase in shipping volume will offset the potential losses of working independently, which will further enhance the overall strength of the eCommerce-driven economy this year. Efulfillment is a breakthrough in how humanity gets what it needs. Like the marvels of engineering and design of the recent and distant past, efulfillment will need to grow and evolve to meet the demands of an increasing market size, but the only way to evolve will be by providing what customers want, at reasonable prices and with unprecedented speed of delivery. Fortunately, these 11 trends will make the goals of efulfillment possible.

Chapter Two What are the Major Considerations 9. Multi-Order eFulfillment Grows Critical. for Manufacturers & Distributors for eCommerce?

5 Areas of Focus to Personalize the ECommerce Experience in an Omni-Channel Supply Chain World In this chapter we will focus on how 5 areas of focus can bring back the focus on the customer by personalized their online shopping experience. These are but extensions of the idea to maximize omni- channel strategies by putting the customer at the heart of the supply chain. 5 Strategies to Personalize Your Web Experience to Put the Customer Focus at the Heart of the Omni-Channel Supply Chain I think you will agree with me that modern business is inseparably linked with Internet. Launching your own ecommerce project online is a key to spectacular revenue growth and a nice opportunity to find a large number of potential customers as you pivot to an omni-channel supply chain. Large and small companies provide customers with all possible products and services via their own virtual online stores or huge multi-department shopping malls. Most modern customers can't imagine their lives without shopping online, as they are able to order any required product without overcoming long distances and wasting their precious time standing in long turns. However, plenty of website owners can't boast of having a strong base of return clients and high revenues. Did you notice that some simply made web stores are always visited by a large amount of customers and other bright and shiny websites disappear from online business environment? The answer is simple – customers appreciate a sophisticated and hassle-free shopping experience and visit only websites with high performance and an excellent customer service. The main aim of any website owner is to make his customers feel like special guests and provide them with smart website services, which will be able to meet their personal and business needs and preferences.

Personalization is a technology that helps website owners create a unique customer experience, based on results of past search and sales history, utilizing personal customer information, taking into consideration their interests and improving customer services. A personalized website has got more chances to meet customer's requirements and occupy leading positions in the ecommerce marketplace. In my article, I will try to reveal main personalization techniques that will increase customer loyalty dramatically and attract more clients to your website. Advanced Content

Very often by visiting a website, customers complain of lack of content or information overload. If you're faced with these issues, it's high time to personalize your website content. At first you must define what your content is about, find out and segment your audience, then personalize the content depending on demographic, industry, job functions, persona interests, and other rates. For example, tracking customers' locations and researching their interests can tell you what type of articles and reviews they prefer to read, as some of your visitors may like short informative content forms and the other ones will require more details and explanations. Displaying personalized content on a website is one of the best ways to increase the level of conversions significantly and retain more customers, satisfy their specific needs and force them to spend more time surfing your website and searching for more required products and services. Moreover, a website with personalized content is more Google (and other search engines) friendly, which makes it much more visible in search engines and drive more traffic in the sequel. Services Personalization Some of the most important aspects of your personalization strategy are customer service and support. You should offer different navigation options that will keep all previous customers' activities and allow them to continue shopping after making a purchase, without starting all the process from the beginning. Another indispensable element of a successful online store is a good personalized search engine. If your search box is equipped with product filters, then your customers will save their precious time and get relevant searching results. Also, vendors must pay attention to live customer support services, which were specially developed to research clients' issues and provide them with quick and professional real-time responses.

Besides standard personalized services, you can build strong relationships with your customers with the help of third-party data services. Using collected information about geolocation, weather or other environment features, you will be able to offer visitors required products according to the situation. Multi-Device Experience In modern conditions, customers prefer to go shopping through mobile devices and desktops. One of the current challenges, plenty of website owners have to face, is providing customers with lag-free cross-channel experience (similar to an issue free omni-channel supply chain). As a rule, websites can be displayed incorrectly on the screens of various desktops, tablets, and smartphones, and lack of various useful customer services can complicate the shopping process. In this case, vendors should think over a professional personalized development approach and improve performance and accessibility of their web stores as fast as possible. If you want to prevent shopping cart abandonment, you have to check and manage shopping cart services. It's quite important to pay personalized attention to your customers via providing them with useful applications, easy check out process and recommendation surveys, which can improve customer experience and boost the level of your ecommerce sales drastically. Personalized E-Mail Campaign

The best method to improve interaction between vendors and customers is email personalization. Possessing client contact information, any vendor is able to offer required products to his customers via sending them private letters. The main mistake merchants usually repeat when they communicate to customers, is a standard letter format and same products they offer to clients year to year. I can assure you that customers are tired of getting thousand of similar letters, so they will probably mark your letter as spam and forget about your online store forever.

First of all, personalize greetings in your letters, as I think that any customer will be glad to see his own name in a letter, dropped into an email box. Make your customers feel like top priority, by sending them letters with little discounts, free samples or birthday congratulation notes. Of course, don't forget to offer your visitors an email subscription form to inform them about new products and services that are available in your web store. Social Networks Personalization In addition, I want to mention that the most essential part of a personalization strategy is social media interaction. Customers always want to get in touch with a real person, but would not like to communicate with an automated software machine. It will be better if you share your social media ID with your customers and establish a company's page on Twitter and Facebook. Allow your clients to comment and complete surveys and reviews you place at your website. Furthermore, personalized feedback is a nice opportunity to inform your customers about policy of an online store brand, find fresh ideas that can bring your business to a new level, track and react to all customers' questions, complaints, preferences and gain customers' trust for many years to come.

[INFOGRAPHIC] eCommerce Platforms: Magento vs Shopify & LTL eCommerce Shipping Solutions When you view a Magento or a Shopify website, it's hard to find any visual difference between the two. Comparing them can get a little challenging as each one specializes in some criteria which may not be present in the other. According to the studies, Magento has been in existence for a while now and is extremely popular amongst the large corporations, as well as the medium businesses. This open source software has one of the most extensive features catalog, that you will ever find within any available e commerce platform. Though working with Magento is slightly expensive and requires the web development knowledge, it nevertheless provides an amazing experience of creating a website exactly the way you want. Along with a vast range of templates, addons or plugins to choose from, it also offers a variety of features for SEO, inbuilt marketing, analytics etc. Shopify is self hosting and offers a free domain name. Even though it has limited functionalities and isn’t too flexible, it is gradually gaining popularity mainly for its simplicity and round the clock support system. It is considered an apt platform for those with literally zero coding knowledge, who require a user friendly interface for setting up their websites quickly.

Take a look at the following infographic that attempts to compare the two best eCommerce platforms - Magento Vs Shopify

The Impact of Mobile Commerce on Distribution Companies Distribution companies are going to have some of the biggest impacts from mobile commerce. These effects will change standard processes, and some companies may not make it through the mobile revolution. However, distributors that take the time to learn what changes will be likely will be better prepared to become the leading supply chain partners of tomorrow. Let's take a look at some of the ways mobile commerce is impacting distributors today. Renewed Focus on Updating Existing Systems with Mobile Commerce. Some distributors are reluctant to run the updates required by their systems. Unfortunately, not updating systems as soon as possible can lead to a system-wide crash. According to Clean Link, avoiding necessary updates within a given distribution system may result in information bottlenecks and lead to problems for the end-user. Also, updates are starting to become routine and frequent, so avoiding even a few updates could cause problems in your distribution network. Responsive Web Design Is a Must. Your website needs to be responsive. According to Sarah Leung of Handshake, 52 percent of B2B buyers research products with their smartphones, and if your site is difficult to navigate or unresponsive to different devices and viewing on a smartphone, you could be losing business. Responsive web design refers to the ability of your site to adjust automatically to the best viewing sizes for different viewing screens. For example, a customer should be able to navigate your site more easily on a smartphone or tablet, and in fact, failure to optimize your site in this manner will result in a penalty against your site by Google.

More Businesses Want an Internet-Based Wholesale Environment. Businesses and vendors want to access Internet-based wholesale environments. This simplifies the ordering process and allows all parties to work together better and faster. Meanwhile, customers are accessing more retailers than ever through omnichannel solutions, and as a distributor, you need to be ready to handle information from vendors, consumers, and B2B partners. In other words, you site can no longer survive as a twopage or three-page information-only site. You need the ability to sell your services and products from within the distribution network.

SaaS Turnkey Solutions Are Encouraging Competition and Growth. The days of terminal-based systems have ended. Your distribution network should rely on systems that do not keep data on-premises or in faulty systems. Instead, Cloud-based software-as-a-service (SaaS) solutions can be automatically updated and managed from any location. As a result, your opportunities for growth are more lucrative. Concurrently, SaaS solutions are enabling smaller businesses and competitors to enter the market. Unfortunately, this means you will need to move harder and faster to maintain a firm grasp on your customer base.

Everyone Wants an App for That... Do you remember one of the most famous sayings when the iPhone was unveiled? “There’s an app for that” became synonymous with the push toward a revolutionary mobile phone, and in a sense, those words helped to create a new environment for shoppers and businesses alike. Customers and businesses want apps. Apps are easy to use, quick to load on smartphones and a source of information. Apps have been created for virtually every purpose known, and if you have not yet embraced the creation of an app for your business, you are falling behind. More importantly, your customers and B2B partners may not even be willing to try to access your system through a smartphone’s browser.

Integration Must Be Seamless. According to Samantha Carr of Handshake, integration, and personalization of the shopping experience will be critical to the success of the business through mobile commerce. Furthermore, clients and customers will want instant ordering capabilities, and real-time inventory updates will be needed to give customers as much information about a product as possible before placing an order. For example, an automated email announcing a favored product is back in stock may be warranted to encourage repeat purchases by both B2B and B2C sales.

Advertising Will Become More Automated and Easier to Manage. Think back to the brief mention of apps. Apps are everywhere, and there is a common aspect of most free apps. Advertisements are the life force of free apps, and you can use this to leverage more visibility and automated marketing for your company. Furthermore, many app-based marketing campaigns are incredibly simple to upload and manage. Primarily, you need to contact Google AdWords, Facebook Ads, or other online advertising agencies and create a PPC marketing campaign. This advertising is much cheaper than traditional advertising, and the ads are up and running in record-breaking time. Inventory Management Is More Data-Based. Mobile commerce is also empowering better inventory management. Distributors have access to more information collected and analyzed from consumers’ and businesses’ actions online, which translates into more data to use in creating forecasts. More importantly, data-based estimates enable distributors to redirect the flow of goods to areas where increased sales are likely. As a result, the supply chain becomes more proactive to the order fulfillment process, reducing delays and costs along the way.

Mobile commerce is a revolution for distributors and the supply chain. Do not be fooled into thinking your competitors are not using mobile commerce. Your competition is already online, and it is time for you to make the move as well.

[INFOGRAPHIC] Logistics Technology: Why your E-commerce Store Needs a Mobile App? Reasons Why an E-Commerce Store Should Have a Mobile App Remember the last time you launched a campaign? A good 50% cash back on the products purchased within the next two hours was more alluring than you thought. The end of the day; however didn’t fetch you the number of orders that you actually expected. In hindsight, you would have surely realized the need to have an app for your store. Imagine the amazing numbers you could have generated by merely sending a flurry of push notifications to prospective buyers and even existing customers but that was only to be if you had an app. The aforementioned is good enough a reason and doesn’t require you to look into the stats that display increasing transformation of web users to a mobile device. Ecommerce is easier and effortless with great opportunity to reach wider population. You consumers would always want great products clubbed with interesting offers but at the same time, what’s important, is to make the convenience of ordering as simple as possible. An m-commerce visibility of your store is the need of the hour. The below infographic wonderfully drives you towards significant data that might just push you to make a move towards having that much needed mobile app for your store

Infographic: The Importance of Creating a Mobile App for your E-Commerce Store

85% of consumers prefer mobile app over mobile websites 41% of smartphone owners made a purchase from their mobile phone (in last 6 months) The growth of mobile commerce outpaced overall growth of e-commerce in 2013 1 out of every 3 visitors to the average retail website is mobile only By 2015, mobile shopping will account for $163 billion sales worldwide (12% of global e-commerce turnover)

E-Commerce Distribution: 10 Things Every Distributor Should Know About E-Commerce

E-commerce is both the greatest opportunity and most difficult challenge you will ever face as a distributor. There is more information in e-commerce distribution than you could possibly realize, and the potential for growth of your business is exponential. However, e-commerce can be scary and unforgiving. Fortunately, you can improve your chances of success by understanding the top 10 things or best practices, reports Leslie Hansen Harps of Inbound Logistics, every distributor should know about e-commerce. 1. Mobile E-Commerce Distribution Is Real.

Mobile e-commerce distribution is not simply an ideal; it is a fact. The majority of online shopping is through smartphones and apps, and your company needs to leverage this by providing services to those companies who have app-based and mobile-optimizing shopping environments for their customers. 2. B2B E-Commerce Is King. As a distributor, most of your customers are actually businesses. In the modern supply chain, you are going to need to realign your business strategy with partnering businesses. In other words, you need to transition to a business-to-business strategic partner and services provider.

3. AmazonSupply.com Is Your Biggest Threat. AmazonSupply.com, reports Insite Software, is one of your biggest threats to maintaining a role in the distribution network. Amazon has flooded the market with products, and now, the company is doing the same process to flood the supply chain. You need to consider that some of your business will be lost to AmazonSupply.com, and you need to work to encourage your customers to stay with your company. However, do not be discouraged when some clients or customers decide to abandon ship in favor of Amazon.

4. Overseas Manufacturing Is Not the Solution to E-Commerce Distribution Problems. Overseas manufacturing is more like opening a can of worms than opening doors if you plan on only selling your products in the U.S., reports Sean Ogle. While some overseas manufacturing can help your company, more customers are turning to products manufactured in the U.S., and this mindset is only growing stronger with the 2016 election. In another scenario, the 2016 election could have serious consequences for companies making products overseas, so today’s distributors need to focus on products manufactured in the U.S. as a priority. Ultimately, not counting on overseas manufacturing of products for sale in the U.S. can act as a safety net for today’s distributors. 5. You Need to Focus on the Customer Experience. The customer experience is one of the greatest problems in meeting the demands of an e-commerce driven world. According to Bob Trebilcock of Logistics Management, clients are focusing more on cycle time, and as a distributor, your ability to get products out equal to, if not faster than, Amazon can be the determining factor in if your customers or clients continue to work with your company. The key to making this practice work is by giving your clients options. For example, offer shipping options that range from two days to one week. Some customers will not mind the week, but those who need it sooner have the ability to get it sooner.

6. E-Commerce Is Ongoing and Continually Evolving. E-commerce distribution is not static; it is always evolving and growing in scope. More small businesses are entering the realm of e-commerce daily, and your competitors are waiting for the chance to pounce. You need to be proactive in getting your company in front of customers and other businesses. Even if business seems to be booming, you still need to work on marketing for e-commerce consumers because some time in the future the number of customers you currently have could change dramatically, and you need a backup plan.

7. Align Distribution Strategy With Information and Insights From Analytics. Use analytics to stay informed of how your business needs to adapt to the needs of ecommerce B2B businesses. Your strategy needs to align with the strategies of your B2B clients, and you should be willing to use this information to create new ideas and ways of working to give your clients the best rates and services possible. 8. Increase Your Visibility Through Advanced Shipping Notification (ASN). An advanced shipping notification (ASN) helps to keep your carriers happier and engaged by notifying them when you are about to ship a specific purchase order. This gives them a time to expect arrival of the product, and you can include all of the relevant information on the ASN for your shipment. Ultimately, this keeps the supply chain effective and connected. 9. Hold Vendors Accountable. Some vendors will ignore your processes and refuse the common decencies of business. As a distributor, you need to hold vendors accountable. If a vendor does not meet your expectations or adhere to the rules and guidelines in your company, create a way of encouraging adherence. This can be a suspension or other form of penalty. Advise the vendor that future occurrences could result in the dissolution of the B2B relationship. However, you must be reasonable in your rules and requests.

10. You Still Need to Manage the Returns Process. E-commerce distribution is going to inherently result in more returns than brick-andmortar shopping. Customers may order the wrong size, incorrect color or wrong product. You need to be prepared to handle a flow of goods back into your warehouse and distribution network from your customers, and nearly all online retailers offer free shipping on returns. As a result, you need a system to manage the whole returns process and print out return shipping labels for customers on-demand. Your education on e-commerce does not here. E-commerce is also evolving, and today’s insights may not necessarily reflect what tomorrow may bring. Rather than simply hoping for the best, you need to leverage the information found in these 10 factors to provide better service and products than your competitors. Ultimately, you can get more customers than you could have dreamed through e-commerce, but turning a blind-eye to e-commerce can spell your doom.

The Importance of Carrier Selection in ECommerce

Competition. It is the ultimate in business. It serves to keep a balance between reasonable prices and profit margins. It keeps companies from hiking their prices on consumers, and it encourages businesses to produce better products and meet customers’ expectations. While competition is good, it is often forgotten when thinking about shipping. Most businesses think their only options are FedEx, DHL or UPS, but in reality, there are dozens of carriers waiting to be tapped. However, these carriers are relatively smaller than the Big Three, and their services may be off limits if you can’t reach them in your area. But, that does not mean you shouldn’t explore them. We’ve discussed the importance of using parcel shippers, multi-carrier shipping programs and joint-ventures with Magento Freight Shipping in the past, but the importance of carrier selection is taking center-stage once more. E-commerce is increasing in size and reach, and you need to understand the vital role carrier selection plays in keeping e-commerce profitable and productive. What Is Carrier Selection? Carrier selection is an idea made up of two simple words. You need to have multiple carrier options available for selection to keep the price point and shipping cost of your products down. Your transportation costs are roughly equivalent to 5 percent of your total sales, so unless you want to willingly pay 5 percent, you need more options. Fortunately, a broad carrier selection gives you these options.

Why Do You Need a Variety of Carriers to Choose From? There are multiple benefits to working with a variety of carriers. More importantly, you do not have to worry about not getting hold of one carrier for all your needs. Instead, multiple options naturally lead to better service levels and cost savings throughout your business, but some of the additional reasons for expanding your carrier selection include the following: •

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Consumers Demand More Choices and Options. Consumers are not satisfied with standard shipping anymore. They want it today, and they want shipping costs to be ZERO. If you can’t meet those demands or be very close to them, they will find what they need from Amazon, Wal-Mart or E-Bay. E-Commerce Order Sizes and Delivery Requirements May Vary. E-commerce varies heavily in size. Although many packages are small parcels, some may be huge. Think of the difference between shipping a 65-inch TV and a bushel of apples. Both may be bulky, but the dimensions can vary dramatically. As a result, you need to have access to multiple types of shipping. Different Carriers May Offer Different Service Levels. Next-day air service is great, but what if a product takes longer by air than by truck? Different service levels must be available to ensure the fastest mode of transit possible. Carriers May Not Provide Open-Ended Services. Open-ended services are provided by carriers who work exclusively with other businesses and logistics service providers. In other words, some carriers may not even be available to you without a third-party logistics provider. More Carriers Equals More Competitive Rates. Carriers have a vested interest in getting your business, so having more carriers will give you access to more rates to choose from. Interlining Is Essential to Globalization of E-Commerce. Carriers are not necessarily capable of working globally, and some shipments may need to be transferred to another carrier for final or international delivery, otherwise known as interlining. This is critical to making sure you can reach your e-commerce customers from around the globe. Plus, this transfer increases rates, and as mentioned previously, more rates are better.

Other Benefits of Carrier Selection Through 3PLs. An expanded carrier selection is designed to save you money. While it may not seem like it initially, small cost savings add up to big profit margins over time. For example, imagine the options at your disposal when you transition from having three carriers to review to 60. But, managing this many carriers yourself is a huge time investment, so you need to take advantage of a 3PL to ensure you are seeing the best rates available for your needs. In other words, you don’t need to know the most expensive if the cheapest is first on the list. However, some additional benefits of using carrier selection through 3PLs include the following: •

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Auditing and Order Tracking Tools. 3PLs offer an array of auditing services, which can help you isolate errors in your system and processes, which reduce overhead. In addition, you and your customers can take advantage of more order tracking tools to help improve customer service as well. Assistance in Preventing Overbilling and Crediting Overpayments. Overbilling or double-billing is part of business, and even the most proactive systems will let a few instances slip through the cracks, but a 3PL can work to locate and credit incorrect billing issues. Web-Based Applications to Ensure Optimized Routes. Optimized routes lead to shorter delivery schedules and better reception by customers, promoting your brand from within. Better Alignment of Business Strategy With Goals of E-Commerce. Your business must adapt to e-commerce, and 3PLs can provide assistance with aligning your business strategy to the needs of e-commerce. Dashboarding Improves Communication in Your Operation. Dashboarding is also critical to your success, and your 3PL should offer metrics and dashboards to keep you in the loop and updated on your progress quickly. More Shipping Lanes and Availability. Having a broad carrier selection through a 3PL also opens up more shipping lanes and helps to prevent delays from unavailable carriers.

As a shipper or retailer, you have more power in deciding which carrier ships your products than you realize, and some lesser-known carriers could easily be cheaper solutions for local business. However, smaller carrier size means you may not even know those carriers exist, and in some cases, these carriers may have negotiated lower unpublished rates with 3PLs that bring them business. Ultimately, having more carrier options is the next step in the evolution of the supply chain to meet the demands of a world driven by e-commerce.

9. Multi-Order eFulfillment Grows Critical.

Conclusion

Within e-commerce, unpredictability is a constant factor. Flexibility in the supply chain, therefore, becomes critical. This can be derived from implementing the right software and automated systems that can support the fluidity that e-commerce requires. The flowering of e-commerce—while welcomed by most manufacturers and distributors/retailers—has introduced far more risk and complexity for logistics managers. Determining the optimal distribution network has never been more of a challenge, as shippers strive to strike a delicate balance between service and cost. “Any provider that establishes a strong reputation in e-commerce logistics and finds a formula which yields a consistently decent margin is set for years of success,” says David Buckby, and economist with the London-based consultancy Transport Intelligence [Ti]. Logistics is the backbone of all manufacturers’ & distributors’ success. In traditional supply chains, the movement of goods is very slow, more inventory is distributed in the supply chain and the operating cost of the facilities is exorbitant. Due to manual processes at each stage of the supply chain is dependent on people rather than machines. The efficiency is decreased due to human errors increasing the time and resources required in the supply chain. Traditional logistics is a memoir of the past which cannot survive in a digital age of technology and automation. Forrester Research predicts that by 2017, e-commerce sales will reach $270 billion, an increase from 8% to 10% of all U.S. retail sales. One of the main reasons behind the success of e-commerce is logistics. Fueled by technology and consumer preference, modern logistics empowers quick deliveries from the supplier to the warehouse and from the warehouse to the customers. In our next installment of this 2 part e-book series, we will cover the benefits of expanding (not replacing) a manufacturers’ & distributors’ traditional business model to e-commerce as well as how you may execute a sound e-commerce logistics program.

Currently, Cerasis offers manufacturers & distributors an e-commerce solutions to integrate with our TMS, the Cerasis Rater, the ability to calculate the cost of shipping freight from multiple LTL freight carriers. We developed the Cerasis Freight Shipping ecommerce Extension in such a way so that merchants will have the full functionality of the Cerasis transportation management system, the Cerasis Rater, to anyone who downloads the Cerasis Freight Shipping Extension for the Magento platform. Merchants who use the LTL eCommerce logistics freight shipping solution from Cerasis and WebShopApps have the following capabilities:

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Retrieve freight rates from over 25 Cerasis Select Carrier Partners. Option to offer eCommerce freight shipping only when an item marked as freight is in the cart, or if a pre-defined weight limit is exceeded; this extension is ideal if you sell a mix of freight and non-freight items. Use with the Dropship extension to specify standard shipping rates on items from one location and freight rates on items from another. Use with the Dimensional Shipping extension to send dimensions into the eCommerce freight shipping extension. Use with Shipping Override to only offer eCommerce freight shipping in specific countries / regions. Have full access to the freight transportation managed services of Cerasis to include viewing invoices online, run freight analysis reports and activity reports, turn-key freight claims management, and freight accounting services of freight payment and auditing.

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