If you’re just starting an e-commerce business or considering starting one, how do you get it off the ground? While there is no single way to structure an e-commerce supply chain, there are numerous things to consider and many questions you must ask yourself about how you want your business to operate.
In the early days of e-commerce, if a consumer placed an online order and it magically appeared on the doorstep a week later, he or she was probably astonished that it showed it up at all. My, how things have changed! With Amazon driving the delivery bar ever higher, today’s consumers consider an order to be slow if it shows up in two days. With such a tight delivery window, e-commerce companies have to work very hard and very smart to stay in the game.
E-commerce is an exciting business because the sky’s the limit. When an e-commerce website is launched, it reaches a market the size of the entire U.S., or even the whole world. That’s a lot of upside to be had. The problem is, exposing your company to a vast geographic area is far easier than delivering to all points within that geography overnight or even the same day. And, without doing so around 95% of your market will label you as slow.
Let’s begin with the most basic issue: inventory. Unlike a traditional brick-and-mortar store, you don’t need a physical location for stocking and selling products — in fact, you don’t even need products! While you could manufacture and sell your own products, many e-tailers sell products made by others. Which do you prefer?
Many other decisions must be made as you set up the supply chain strategy that works best for you. How and where will you warehouse your inventory? Will you even need inventory? What do you need to consider when selecting a packaging vendor? Have you thought about logistics, or how to fulfill and deliver products? Would it make sense to outsource any or all of your operational tasks to a third-party logistics (3PL) provider?
The accompanying infographic, Getting Your Goods From Here to There: Setting Up Your E-Commerce Supply Chain Strategy, provides a lengthy list of questions, the answers to which will help you determine the optimal strategy for your business. Remember, there are no right answers, only anwers that are right for your business!