Strategies to Prune Logistics Expenses for E-commerce Companies
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Strategies to Prune Logistics Expenses for E-commerce Companies

By Retail CIO Outlook | Monday, March 18, 2019

E-commerce CompaniesE-commerce companies are always striving to use innovative solutions to cut their logistics expenses. Many e-commerce companies ship products at a loss to maintain variety in their products, which helps them immensely in retaining their customer base. Companies are taking measures like changing the packaging to reduce logistics expenses. For example, Amazon requested the retailers to change the smartwater package from a six pack, which cost $6.99 to a $37.20 pack of 24 bottles. This change helped the company in covering the shipping costs for the product.

Many e-commerce companies are leveraging technology tools to provide superior services at a lower cost. An array of strategies that can help e-commerce companies to manage their logistics expenses:

Delivery choices based on a customer’s preferences: Providing a variety of delivery options to customers can help e-commerce companies in driving profitability. Enterprises can provide incentives to customers for choosing a profitable delivery option. While some customers can pay extra for faster deliveries of their products, many others want the cheapest option to buy a product. E-commerce companies should allow a customer to choose a delivery service based on their requirement.

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Using technology tools: Many tools can allow e-commerce companies to provide their customers with better delivery options without compromising their profits. These tools will enable retailers to view multiple delivery options under a single platform for all deliveries, allowing them to choose an appropriate delivery method. Modern logistics technology tools use many intelligent technologies to provide the best options for the delivery of a product. For example, logitics technology tools can analyze when the delivery trucks might be in a customer’s area, enabling e-commerce companies to eliminate shipping costs on many products.

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An Omni-channel approach: Omni-channel approach to product delivery will allow companies in consolidating orders across all the delivery channels. For example, a dedicated carrier that is carrying a large product can also include a smaller product, which is to be delivered in the same area. This approach can help in eliminating parcel shipping costs, increasing the profit margins for companies.

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