3 Proven Tips to Reduce the Operating Cost of your E-commerce Logistics

By | Oct 24, 2019 |0 Comments

Think to start your own business is a herculean task? Well not anymore! Gone are the days when venturing into a business was a candid affair! With everything going online, these days entrepreneurs are taking a big leap and making more and more investment to establish their e-commerce retail store. 

So what is it with this trend of online stores? Well, one of the biggest benefits of kick-starting an online venture is that it does not demand huge capital investment, unlike brick and mortar models. Invest a few thousands of rupees and you are good to go! Besides this, an online store offers greater benefits to the business owner in terms of product range, competency, customer loyalty and optimisation of e-commerce logistics. 

Once your online store is all hunky-dory, you must be having greater plans on the chalkboard. When you created a full-fledged portal and started accepting orders and carts started getting filled, you won half the battle. So what does the other half consists of? What is it that will help your business sustain in the market? Well this includes having repeat orders and making sure that those carts are not left abandoned in the long run. 

Now how do you ensure that? How do you make sure that there are no open-ended loops in your business that can harm your brand in the long run? When it comes to profitability, any business revolves around the fact: expenses are as significant as income. These expenses include advertising and branding, maintaining a sizeable inventory to beat competition and partnership with an e-commerce courier service provider. With rising expenditures, it is difficult for business owners to fill their pockets with profits. Hence boosting the revenue and cost reduction are two pragmatic solutions that can cut down the expenses to a great extent. While marketing and advertising is the only option to boost the revenue, there are ways through which you can do some cost-cutting and save your business from sinking. 

One way is to take hold of your logistics chain and study it closely. If you can manage it well you can fairly reduce its operating cost. This will have a direct effect on your business and is one of the most effective ways to boost company productivity. Here are 3 proven ways through which you can optimise your supply chain management cost for an effective and efficient business strategy:


  • Say Yes to a reliable fulfilment partner early on

You must be wondering that your online store has only just started! So why tie-up with a fulfilment partner yet? But in reality, you should decide your third party logistics supplier early on. This can be a tough decision in the early stages, especially when orders are less and profits are low. But for the long haul, this is a wise thing to do. It can save you an ample amount of time and needless to say will take a whole lot of load off your shoulders. 

Let’s see how you can benefit your business by opting a courier partner early on! Now there are some obvious benefits of insourcing logistics and letting your in-house team take care of the inventory, order acceptances and deliveries. The biggest benefit is that it reduces dependency and gives you total control over the company’s supply chain function. 

However, there is a whole lot of advantages to outsourcing a fulfilment partner. You can get an access to its professional capabilities that your in-house team may lack. Whether it is technological proficiency, resources or venturing into new geographies, you can positively exploit its expertise. 

From a cost perspective, there are several advantages to choosing an e-commerce courier service partner. Typically, fulfilment providers have economies of scale to offer a better cost per unit as to what you can achieve yourself. 

Scalability, the ability to grow your business and access to warehouse infrastructure are some of the reasons why most online entrepreneurs outsource a third-party fulfilment partner. The advantages of outsourcing a fulfilment partner are fairly greater than having an in-house team, isn’t it? 


  • Synchronize your inventory 

Supposedly as a customer, you log on to a fashion portal and try purchasing something that you have been planning to buy since a long time. But to your disappointment, your favourite product is out of stock! What impression will you carry in your mind for that brand? Would you like to revisit the portal or recommend it to your friend? Well, that is the whole idea. Synchronise your inventory from your customer’s point of view, yet at the same time avoid blocking the flow of cash. 

It may sound very simple, but accurately assessing and measuring your inventory is a tedious job in the entire logistics chain. How much buffer stock to keep in the warehouse is situation dependent. The constant demand vs supply war also becomes a deciding factor when it comes to inventory management. Other than that, managing an inventory becomes an added task especially during festivities, the holiday season and during special offers, discounts and sales. 

On the other hand, excess inventory also leads to losses, especially if the product shelf life is reasonably less or the product is perishable. Such situations can block the company’s cash which you could have productively used in other areas of business. 

So the goal is to maintain the right inventory at the right time and in the right amount. And doing that effectively is something that most online business owners still struggle. One way to do this right is to tie up with shipping aggregator platforms that help you partner with popular e-commerce courier service partners. Most of these platforms are technology-driven and manage your inventory and supply chain far better than manual means. 


  • Balance Value-Added Logistics

What does value-added logistics mean? This includes giving your customers a nice look and feel about the product and the brand by packaging it correctly. Nevertheless, it is important to realise when these value-added services turn troublesome and cost more than they are worth. 

It is a good idea to ask your fulfilment provider a list of value-added services and capabilities that it can deliver. Whether they can handle custom packaging? Can they do gift bags? Can they craft personalised messages? Can they work with fancy papers? These are some of the questions you should be asking your e-commerce courier service provider to offer value-based deliverables to your customers. 

However, you need to know where to draw a line. Some of these value-added services add unwanted operational complexity and hinder an otherwise swift fulfilment process. As a result, they drive cost into the fulfilment processes which most of the times are not a good return on investment. 

As a business owner, you need to balance the operational implications with the marketing “aha moment”. Even if the packaging is done right or beautiful it won’t matter if order fulfilment isn’t on time. 

The goal for any e-commerce business owner is to grow, flourish and scale the business to newer heights while managing the operational costs in check. For online businesses, the overhead costs are little in comparison to a physical store. But they are still as many as not to be ignored. Online stores need to find better and more efficient ways to optimise their costs to stay afloat. 


While everything is now a race against time, one way to optimise business cost is to reduce time wastage. By automating tasks at every step of your e-commerce logistics, you save a lot of time and employee energy to focus on other aspects of your business. By connecting with a good aggregator platform, you can automate most of your shipping tasks easily. With a good aggregator platform you need not worry about the minutiae of running an e-commerce store. ShipKaro - India’s number one shipping aggregator platform offers hassle free and efficient shipping solutions for your online business. With ShipKaro you can boost your customer reach by offering timely and improved deliveries. 

The e-commerce industry is growing, slowly but steadily. With new technologies, its growth is bound to accelerate and generate profits. But as a business owner, you should do what you can to optimise your logistics chain. After all, making a few decisions now will only pay off down the road! 

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