According to Forrester, 57 % of B2C e-commerce sales in the USA currently go through marketplaces1. This explains why this new distribution channel is rapidly gaining in popularity among vendors!
That said, success is more than just a click away. The level of customer service has to follow, and at all times, including peaks of activity for the vendor such as the run-up to Christmas. This implies having adopted a good e-logistics system and appropriate organization upstream.
The simplest solution for the vendor is to delegate the management of their e-logistics to a professional, i.e., a marketplace operator, who avails of an efficient tool to adapt continuously to market constraints.
Unfortunately, while post-Covid economic recovery is more buoyant than anticipated, the transport network is struggling to follow suit. Let’s not forget either the rise in raw material and energy costs and the maritime freight crisis with soaring container prices on Asia-Europe links. Road transport is also lagging behind.
There is a shortage of between 40,000 to 50,000 drivers in France, which is twice the rate of 20172. This shortage concerns the whole of Europe, with an estimated deficit of 500,000 drivers across the continent. Given the difficulties currently faced by truckers, how can a marketplace vendor ensure service quality and cost optimization? Unless you’re an expert in e-logistics, managing this is going to be tricky. Hence the option to out-source.
Two options to consider for your e-logistcs: Dropshipping and Fulfillment
Dropshipping
For the first scenario, the vendor sells and ships via their supplier. More specifically, the procedure is as follows: the customer orders goods from the vendor through the intermediary of the marketplace1. The vendor orders the goods from the supplier and the latter ships the goods to the customer. This eliminates the need for storage space. The ideal solution if your suppliers are reliable, because they are the ones shipping the goods directly to the customer. Delivery quality is thus in their hands.
Fulfillment
In the second scenario, the product is sold by the vendor, but shipped by the marketplace. This option, known as Fulfillment, includes storage, order preparation, packing, shipping and returns management. This last aspect is primordial at present.
While the returns rate for traditional commerce lies at around 8, it rises to 25% for e-commerce, according to FEVAD (French Federation for E-commerce and Distance Selling)3. By facilitating the returns process, the vendor nurtures trust with their e-customers, who are then more inclined to repeat an order.
Centralize and pool to cut your e-logistics costs
With an e-logistics service provider, vendors can centralize orders via a single tool. This makes life easier for the vendor, because once you reach a certain volume of orders, sometimes on several marketplaces, things can get a little difficult to follow! How do you know who is buying what and from which platform?
In addition, with simplification still in mind, this tool enables the vendor to choose the delivery mode which best matches their needs. This way, stock flows faster and the service costs less. With a partner such as Octopia, the vendor also benefits from more competitive rates thanks to the large volumes managed by the platform.
Efficient right to the last mile
According to FEVAD, 35% of customers who have had a negative delivery experience will not repeat an order on the same online circuit3. The facts speak for themselves; loyalty is based on flawless delivery. And customized, if possible, because customers want choice!
While home delivery is the most favored option (87% of cyber-buyers4), delivery to pick-up points is also very popular in France. Shipping lead time is also a key criterion, with 24h-delivery a decisive factor in 2021. For all these reasons, Octopia has adapted its services and offers various shipping options: standard, express or pick-up point. On a European scale, what’s more, which is very practical! The change in needs must be taken into account, however.
With the health crisis, the environmental crisis and the congestion of cities, last mile delivery has also emerged as a new issue for vendors. New solutions are thus coming to light, such as collaborative delivery or the use of electric vehicles and bicycles, providing a host of alternative means for sustainable and ethical last mile delivery, in keeping with the new desires of consumers.
The trick is for the vendor and their service provider to find the right formula to balance costs, given that last mile delivery is the costliest step.
The closer you get to the end consumer, the more unit transport costs rise.
Extend customer experience with delivery tracking
What’s the final piece of the puzzle? Customer tracking. The optimal delivery experience relies both on the delivery promise (on time) and customized shipping (with order tracking and notifications, etc.).
The aim is to offer outstanding customer experience from start to finish, i.e., from the moment the customer decides to buy to after-sales service. Customer service obviously includes returns for an unsatisfactory order, implying that these shipping costs must be well managed according to the geographical zone in question.
E-logistics, the added value of a partner
The added value of Octopia lies in the globality of its e-logistics service for vendors. Its various modules enable Octopia to meet all the needs of end customers while generating maximum satisfaction, and to relieve vendors from a range of tasks and the stress of market constraints (carrier issues, container hold-ups, etc.).
This results in great scores for vendors, who attain a better position in the marketplace which in turn guarantees enhanced business performance. A winning strategy all round!
Find out more about Octopia Fulfillment
[1] Forrester Predictions 2022
[2] BP2R webinar: Carriers’ survey on the road haulage 2021 conjuncture
[3] e-commerce 2020 report- FEVAD
[4] FEVAD e-commerce barometer for the 1st quarter
