From supply chain disruptions to global shipping bottlenecks, the last few years have been hard on business logistics. Paired with labor shortages, rising operational costs, and sustainability initiatives, many eCommerce sellers have seen increasing expenses across every aspect of the supply chain.
Still, there’s ample opportunity to optimize and lower costs across the supply chain. The outlook is hopeful, with CSCMP’s 2024 State of Logistics Report showing a 10% reduction in logistical expenses from June 2023 to 2024 — the first drop since before the COVID-19 pandemic.
Part of that decrease is due to organizations finding efficiencies, outsourcing operations to benefit from economies of scale, and looking to refine their entire supply chains. Those and other initiatives can help your business continue to save money through strategic decisions in 2024 and beyond.
In this article, Ad Badger with MyFBAPrep will talk about:
Leverage AI and automation
Digitization has been a major trend in recent years and has expanded further with the introduction of large language models (LLM) that enable more and better automation. AI and automation can be a great asset to your business by creating alerts, tracking trends, sharing data predictions, and automatically prompting reorders and restocks. These advancements also affect your logistics through:
- Demand forecasting
- Inventory optimizatio
- Order fulfillment predictions
- Robotics
- Real-time visibility of goods and machinery
- Predictive maintenance
- KPI tracking to hone in on procedural improvements
Warehousing is a different story though when it comes to automation. For example, most eCommerce stores still benefit from hands-on, white-glove services for product preparation, quality control, and labeling.
That being said, automated data and analytics can slash manual error, identify opportunities for improvement, help enhance the customer experience, reduce costs, and refine workflows across the supply chain.
Utilize specialized machinery
Your eCommerce store has its own prep and pick-and-pack needs, so you should introduce warehouse efficiencies by matching machinery to those demands. For instance, you could invest in shrink-wrapping machines to eliminate having to wrap bundles and kits manually, adopt box erectors to reduce the time to pack goods, implement robotic pick and pack, introduce specialized shelving, or employ scanning tools that integrate into your software. Matching machinery to your needs can greatly improve efficiency in your warehouses, in turn saving money and reducing time to ship.
While custom machinery is often out of reach for many eCommerce sellers, brands like MyFBAPrep invest in specialized equipment to optimize operations and meet client needs based on contracted requirements, such as speeding up Slate’s FBA prep from 10 days to just 2.
Fast, Reliable 3PL for Amazon Sellers
Invest in sustainability
Trends in sustainability have increasingly forced businesses to consider sustainable packaging, right to repair, and carbon emissions. The SEC is likely to introduce new climate-related rules between 2025 and 2027, bringing new laws concerning sustainability and disclosure for eCommerce stores.
Multiple states are also introducing right to repair bills, although the legislation has yet to reach the federal level. This means you should start thinking about sustainable packaging, reverse logistics and repair, and ways to reduce your warehousing and delivery carbon footprints now to find cost-effective solutions and get ahead of the curve.
In addition, those efforts will prove to be a market differentiator, since competitors are less likely to follow suit this early in the trend.
Software that give you the keys to unlocking more profitable Amazon campaigns, without any of the stress.
Match packaging to products
Many sellers seek a cost-effective option that adequately protects their goods during transport. But packaging is also an opportunity to enrich the customer experience with branding, in the form of custom inserts, tape, and stickers, and sustainable or branded void fill. Adopting sustainable packaging can attract and keep more consumers as well by appealing to ethically conscious shoppers.
At the same time, the higher-quality materials reduce returns due to damaged items that result from inferior protection.
Look for supply chain resilience
Supply chain disruptions are a constant threat hanging over sellers’ heads. So, it’s important to look for and support supply chain resilience across diverse suppliers, decentralized distribution networks, and geographically spread warehousing.
Combining real-time data analytics with both warehouse and transport management software will enable you to track goods in live so you can take action the moment problems arise. If your risk of supply chain disruption is high, you must also calculate and maintain safety stock to mitigate issues.
Look into last-mile delivery
Last-mile delivery typically entails distributing inventory across small and micro-warehousing through a 3PL or 4PL network. Your logistics provider will move goods to a location closest to delivery and only hand them off to the carrier at or near that same point.
When paired with real-time data and in-depth information on sales trends, you can use those predictions to determine where sales are likely to happen and preemptively ready inventory.
Ultimately, that will reduce the cost and time for fulfillment once a shopper places an order. In turn, you should match delivery options to your business’s unique needs.
For example, if you sell oversized items like furniture, finding a 3PL with a fleet to deliver orders directly to the consumer can greatly reduce expenses versus hiring a carrier as a middleman.
Leverage expertise
As an eCommerce seller, you’re the expert in your products, while working with 3PLs gains you access to logistical expertise. Their knowledge extends to shipping and route optimization, choosing machinery for pick and pack, software selection, warehouse organization and layout, and more.
They find efficiencies that reduce costs and improve your customer experience. That’s why it’s important to work with a 3PL that offers human insights and optimization as well as AI advancements, as you need both.
Increase flexibility with a 4PL
Working with a 3PL creates dependencies on their storage and delivery services. If you move to a 4PL though, you access a managed network of warehousing and logistics, which makes your operations more resilient.
If something goes wrong at any stage of the supply chain, another supplier in the network can take over, ensuring continuity at every stage. A 4PL will match your needs to their network, so you gain tailored resources as well, including warehousing capacity, trucking, and last-mile delivery.
Wrapping up — It’s time to upgrade your fulfillment
Improving your brand’s logistics can yield cost optimizations, increased efficiency, a richer customer experience, reduced product damage, shorter timelines for product prep, and more. To see these long-term results though, you must pinpoint areas to refine and upgrade. Start by reviewing your current supply chain logistics and hone in on potential optimizations to produce seamless, robust operations.
About the Author:
Tom Wicky
Co-Founder / CEO
Tom is an entrepreneur, startup advisor, and management consultant with over 20 years of senior management experience. He is the Co-Founder and CEO of MyFBAPrep, the largest worldwide 3PL ecommerce warehouse network.
He managed the digital assets of local media companies across Europe as part of a $2 billion private equity investment led by Macquarie Bank. At the beginning of the Amazon FBA Marketplace, Tom built a data automation platform used to programmatically generate, manage and optimize over 1 million product listings on Amazon. He is a Boston sports fanatic and a recovering hot sauce junkie. Tom speaks Spanish and German and lives in Florida with his wife and three children.
- Follow MyFBAPrep’s Co-Founder on LinkedIn to explore 3PL and eCommerce growth strategies.
- Visit MyFBAPrep.com.
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