Smart Logistics – Reach your destination faster with smart logistics

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Published on: July 6, 2021 / Updated on: July 6, 2021 – Author: Konrad Wolfenstein

Smart Logistics – Reaching your destination faster with smart logistics – Image: Xpert.Digital & elenabsl|Shutterstock.com

Smart Logistics: Intelligent logistics solutions for small e-shops & start-ups

When it comes to maintaining efficient warehouse processes during growth phases, e-commerce startups quickly reach their logistical limits. This is usually due to a lack of experience handling increased volumes and an internal warehouse management infrastructure that is inadequately prepared for the growing demands. This article demonstrates that it doesn't have to be this way.

A rapidly growing customer base, an expanding product range, and consequently, a steadily increasing volume of shipments: what appears to many retailers as an ideal business situation can quickly overwhelm companies. To remain competitive in this fierce market, sometimes costly investments (such as free returns) are required, demanding significant financial resources and attention. Furthermore, the increased logistical challenges are easily overlooked.

Those who fail to invest in efficient structures will quickly fall behind, as a functioning logistics system is the key to the business success of online retailers. Adding to the challenge is the fact that the logistics industry is constantly evolving with technological innovations. For example, the use of drones in warehouses for inventory and product management is no longer just a pipe dream. The use of interactive extended reality technologies such as augmented and virtual reality for the efficient control of warehouse processes is also on the rise. Newcomers, in particular, risk becoming overwhelmed. Therefore, it is advisable to carefully weigh the pros and cons of investing in the relevant technology beforehand and, if necessary, seek support from external consultants.

Challenges for online retailers

Operators of online shops, and especially e-commerce startups, face three logistical challenges that they must quickly address in order to remain successful in business:

1. Scalability of the systems

While modern online shops, and especially innovative startups, are characterized by their flexibility, logistics systems are often the exact opposite: they are difficult to adapt to current developments. However, particularly during the growth phase, logistics processes must be able to scale flexibly. This requires that they are scalable both upwards and downwards and can adapt flexibly to changes.

2. Fluctuating demand

Especially for rapidly growing startups, the difficulty of predicting demand poses a challenge. “When will my products be most frequently purchased?” and “Will the high demand for my products continue?” are crucial questions. A single incorrect answer to these questions leads to high costs and customer dissatisfaction. Therefore, reliable tools for forecasting future sales volumes are essential.

3. Returns Management

Giving customers the option to return their goods creates significant logistical challenges and increasing costs – which rise even further if returns are free. This can quickly overwhelm the financial resources of startups or rapidly growing companies in sectors with high return rates (e.g., textiles, shoes).

Modern warehousing processes as a logistical answer

To ensure efficient processes even during rapid growth, companies should invest in flexible and scalable logistics. Basically, companies have two options here:

1. Investment in warehouse technology

Inefficient shipping processes pose a significant risk to online retailers. Just because a small retailer initially stored goods on shelves in their basement and shipped them individually from home after receiving an order doesn't mean they have to maintain this system when handling 200 orders a day. As the product range expands, such warehousing quickly becomes unwieldy. This often leads to incorrectly ordered items, inadequate packaging, and excessively slow shipping. While this is frustrating for customers, it costs the online retailer real money. Customer satisfaction is paramount, and thanks to major players like Amazon and Zalando, shoppers are accustomed to high-quality shipping. Negative experiences therefore quickly lead to higher return rates and lost customers. This risk can be mitigated with efficient logistics processes and systems.

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2. Outsourcing

Especially for startups that aren't yet able to accurately assess their logistics processes and order volumes, outsourcing fulfillment to an external logistics provider is an attractive alternative. While this solution is somewhat more expensive than managing it in-house, it eliminates the uncertainties of internal logistics management. Furthermore, professional handling of the fulfillment process can improve not only delivery quality but also the company's profitability. Numerous fulfillment providers now offer their clients a wide range of additional services beyond warehousing and shipping, such as shop management or professional photography of the products being listed.

Efficient logistics processes are essential for a successful start in e-commerce. This can be achieved by consistently relying on high-performance technology from the outset and keeping abreast of innovations in this field.

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That's why Xpert.Plus is ideal for smart logistics and high-bay warehouse planning : Smart Logistics with SEO, Extended Reality , IoT and Intralogistics 4.0

Xpert.Plus is a project from Xpert.Digital. We have many years of experience in supporting and advising on storage solutions and in warehouse optimization , which we bundle in a large network Xpert.Plus

Konrad Wolfenstein

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Xpert.Digital – Konrad Wolfenstein

Xpert.Digital is a hub for industry with a focus on digitalization, mechanical engineering, logistics/intralogistics and photovoltaics.

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