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10 Tips to Optimize Your E-Commerce Supply Chain

In this guest post by Warehousing and Fulfillment, discover ways to improve and streamline your supply chain for e-commerce success. By Will Schneider July 9, 2020
10 Tips to Optimize Your E-Commerce Supply Chain

The supply chain is the backbone of all e-commerce brands. 

Whether you are a distributor, retail or wholesale seller, or manufacturer producing and assembling product parts, you make up the supply chain — and regardless of your supply chain position, optimization is key to running a successful e-commerce business.

That is why businesses are always looking for the best ways to amplify their supply chain management. Data reveals that 79% of brands that use supply chain optimization techniques boost their revenue more than those that do not. Also, 70% of industry experts predict that supply chain optimization will lead to high business growth and better customer service at the close of 2020.

With these numbers in mind, ask yourself a question: Does my supply chain need optimization?

To give a proper answer, you need to find out if you satisfy your customers with the shopping and after-purchase experiences you give them. Do your customers get what they need at the right time and at the most efficient cost?

If you cannot answer these questions with a confident yes, then you need to optimize your supply chain.

Supply Chain Optimization, Defined

Supply chain optimization is a technique that you can implement to maximize sales and revenue by ensuring that you are selling or making the right items at the appropriate time and for the proper target audience. It is putting the necessary tools and processes in place so that your manufacturing or distribution operations are in the best possible state.

The supply chain connects the production, financial, and sales aspects of your company, so crafting a result-oriented and effective supply chain is a little tricky. However, it is doable.

Supply chain optimization is tricky business and you need to know what you are doing every step of the way, otherwise the entire exercise could be done in futility. Below are 10 tips that will guide you on how to optimize your e-commerce supply chain network.

1. Solidify Supplier and Retailer Communication 

This is one of the most crucial aspects of supply chain optimization. There must be clear communication between the supplier or manufacturer and the retailer. This eliminates confusion and ensures timely fulfillment of customer demand.

If you use more than one supplier, then this tip is even more necessary because you will have to build quality communication with each of them.

2. Use a Centralized Management Software 

The supply chain optimization process demands that all aspects of your business work in cohesion. To achieve this, you can take advantage of the many management software solutions that connect the different departments of a business so they can work efficiently with each other.

For instance, by using the right management software, your inventory, finance, and sales systems can work in unison. Management software allows you to have relevant data accessible in a central database that any department can effortlessly access, ensuring that you streamline all business processes.

3. Do Not Neglect Mobile and Internet Tech

As a retailer, mobile technology can come in very handy for direct sales, marketing, and data. Internet tech is also vital because it allows retailers to interact with customers and industry professionals via social media or email, which helps you judge trends and stay proactive.

You can also leverage such technologies to give your customers personalized experiences, like location-based services and discounts, to boost sales.

4. Outsource Certain Business Activities, Like Warehousing 

If your goal is to streamline your business processes, then outsourcing certain aspects of it is crucial. Many businesses hurt themselves by trying to run every business process in-house.

Certain processes, like operating a fulfillment warehouse, are redundant and can be outsourced to a 3PL warehouse brand that centers on such activities, so you can focus your resources on growing your brand and improving your business solutions.

You can outsource aspects like logistics, procurement, or even customer support as those processes are time-consuming and redundant.

5. Make Sure You Deliver Only High-Quality Products 

Supply chain optimization also involves getting high-quality products at profitable costs. To ensure this, you must understand your supplier or manufacturer adequately. You need to find out what their strengths are and what limitations they face.

Look around until you find the one that satisfies your business requirements. Come up with a proposal and ask for quotes and information from your chosen manufacturer prospects until you find the best fit.

6. Satisfy Your Customers’ Demands

Knowing your customer’s demands and when they want them satisfied allows you to accurately interpret future trends and ensure that your stock stays at the appropriate level per time.

Monitor and study your sales data to unravel future trends and demands, and then communicate these to your manufacturers. This will aid in proper inventory management.

7. Plan Properly 

Planning is vital for timely order fulfillment. It will assist you in avoiding all kinds of hiccups with your logistics chain. Keep in mind that urgent order fulfillment does not equate to higher shipping or delivery costs. However, without adequate planning, you will pile up significant expenses quickly.

8. Create a Responsive Supply Chain 

By using source data like POS sales or social media information to locate demand changes and trends much earlier, you can ensure that your supply chain responds quicker to reposition inventory and improve customer support.

9. Take Advantage of Analytics Tools 

There are numerous tools you can use to analyze whatever data you possess that will help you understand your customers and target market better. It is vital to know how your customers shop, what they want, when they want it, and what your peak seasons are.

However, you must ensure that you analyze your data accurately and comprehensively before making pivotal business decisions.

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About the Author

Will Schneider is the founder of insightQuote, a match-making service for B2B solutions, and writes informative posts about fulfillment services at Warehousing and Fulfillment. He is passionate about helping businesses find the right solutions to improve their operations. When not working, Will enjoys coaching youth basketball.

10. Renegotiate 

Getting the best-possible rates is great, but you can always renegotiate your rates whenever necessary. The whole point behind the optimization process is to cut down costs, so use everything at your disposal to achieve this. If you can decrease inventory costs, you can increase your profit margins.

Final Thoughts 

Without proper optimization, your supply chain processes can become a nightmare and ultimately hamper on your profit margins. 

You need to know what steps to take to ensure that you make the right moves at all points. By following the tips in this piece, you can streamline your supply chain processes and eliminate the common aspects that cause issues and hinder your business’s success.

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