Logistics can break your e-commerce

Logistics can break your ecommerce

For years when talking to senior leaders at companies who are looking to digitise their sales (aka ecommerce), one of the last things discussed is logistics.

Why you would ask? It's simple. Logistics does not show up on data dashboards, and vanity metrics like RoAS make people look better (lowest of low hanging fruits). Yet, logistics can break your D2C or B2B business. It is also the primary reason a lot of large companies go running to marketplaces like Amazon. Easy and fast delivery with no setup costs.

The case for e-commerce logistics

Let's look at some data- The global e-commerce logistics market size was valued at USD 372.80 billion in 2023. It is projected to grow from USD 441.55 billion in 2024 to USD 1,903.08 billion by 2032, exhibiting a CAGR of 20.04% over the forecast period*.

This growth is being driven by:

• Same day or next day delivery

• Perishable item delivery (groceries)

• SMB retailers digitising

• Legacy companies transforming to e-commerce

• Customers leaving reviews focussed on deliveries

What problems plague ecommerce logistics today?

Reliable deliveries

Fast and dependable delivery builds trust, encourages repeat business, and generates positive word-of-mouth. It can also boost sales, with studies showing a potential increase in sales by up to 5% for every day faster the delivery promise is, and up to 12% with free delivery options. Yet, companies struggle with:

• Choosing the right delivery provider

• Packaging and labelling

• Setting up the right tools to automate the process from order to dispatch

This can as a result cause customer dissatisfaction, negative reviews and definitely an impact on sales.

Damaged goods

It is critical for customers to receive their products as shown in your product page. However, damaged goods are a really major pain point while setting up e-commerce logistics.

Some key culprits are:

• Inadequate packaging

• Suboptimal warehouse conditions

• Human error

• Wrong vendor choice

This can again result in customer dissatisfaction, delivery delays (especially during peak periods) and loss of sales

Inaccurate deliveries

Let me tell you a customer story. This reputed company was doing well in orders. They were growing from the first month. And then the drop. Customer complaints grew of packages not received and this caused some review backlash. Upon investigation, we found the simplest of problems. The person printing the numerous labels wasn't the same one sticking them always on the packages! Yet, inaccurate deliveries are a recurrent problem that can sink your e-commerce shop quickly.

Reverse logistics

The average return rate for ecommerce was 16.9% in 2024, according to a report by the National Retail Federation (NRF) and Happy Returns. Factors contributing to a high return rate can include:

• Delayed delivery

• Incorrect sizing

• Product not matching its online description

So the question is - can your business solve these problems? Does your tactic board include logistics? Or will you become one of those businesses that advertise for millions, and realise you didn't meet any delivery expectations? At AOVedge, we know that logistics is key to cracking the ecommerce D2C and B2B game. So get in touch!

Source:

• https://www.fortunebusinessinsights.com/e-commerce-logistics-market-1079454

• https://www.shopify.com/enterprise/blog/ecommerce-returns