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Maximize online sales with efficient logistics operations

Words of wisdom | Jul 3, 2020

Are you unsure about launching your e-commerce business? Are your online sales lagging? Souad Laidi, Director, Commercialization of Innovations at PME MTL, explains why well thought-out and executed logistics operations will make your project profitable.

Why think about e-commerce logistics?

Did a customer just place an order? That's when the logistics come into play.
E-commerce logistics are essential for online sales. They involve numerous activities including: inventory tracking, warehousing, pick-up, labour, packaging, shipping, returns management and after-sales service.

Online stores must deal with logistical requirements enabling them to ensure greater flexibility in their delivery offer, greater reliability in keeping promises made to the consumer and, above all, greater speed of execution in logistical activities (packaging and delivery). These requirements, if properly understood, will enable our companies to remain competitive with the e-commerce giants.

Source: CEFRIO

The main costs of e-commerce logistics

You have to allocate a significant portion of your budget to logistics. Whenever you make a decision, think about the needs and expectations of your online shoppers. Choose the option that facilitates the overall online shopping experience.

1. Transport: Choosing the right carrier

Price is not the only factor to consider. Online shoppers want to pick up their packages close to home. Choose a carrier that provides the best customer experience, such as drop-off points located throughout the territory you serve. 

Analyze your site data and customer comments to determine whether you made the best decision. You can always change carriers. 

Free delivery or not?

Analyze the competition's offer and establish your average cost per order before making your decision. The data collected on your transactional site can help you. For example, you can take a look at:

  • Which postal codes come up most often?
  • Where do your products sell the most?
  • At what point is the cart abandoned? 

That being said, you do not have to offer free shipping if doing so is detrimental to your bottom line. Several alternatives exist. Here are three. 

  • You may offer free shipping for a pre-determined amount of purchases. The customer’s total shopping cart must reach this minimum amount to take advantage of free shipping.
  • It is possible to include free shipping in the product price. However, if your competitor offers the same product for less, this tactic could result in lost sales. Customers consult and compare online stores before making a purchase.  
  • It is possible to offer free shipping for small items only. The shipping costs for this product category are lower. However, you will have to charge for delivery for large items. Make sure the policy is clear to the consumer.  

Our team can help you with this analysis. Contact your PME MTL expert today

You don't have any data yet?

Allocate a marketing budget to logistics operations. 

For example, you can reduce the investment for social media campaigns and Google Ads to offer free shipping. You can also offer free shipping starting at $75 and lower the minimum amount until sales are up. 

Remember that offering free shipping as part of a promotional campaign should be accounted for as a new customer acquisition cost.

Your rule of thumb: test, analyse and optimize. 

2. Successful returns management

Returns are a reality of e-commerce that you will need to juggle with. In general, companies that sell products online lose money when customers make returns. 

To counter this problem, your returns policy must be clearly indicated on your website. This will avoid possible complications with customers who have not read it. To minimize loss of money, you might want to offer exchanges in order to maintain the sale.

50% of online shoppers will choose the retailer who offers the better returns policy.

Source: Canada Post

Consult the Canada Post Infographic to:
●    Write a clear return policy
●    See how to keep returns to a minimum
●    Know the expectations of online shoppers. 

79% of online shoppers will stop shopping at a retailer after a bad returns experience.

— Canada Post

3. Technology: Having a real-time inventory

A customer has just purchased a product from your site. He has told all his friends about it and is eagerly awaiting it. You process his order and realize that the item is no longer in stock. Imagine his disappointment when he reads your email: “Sorry, the product you ordered is no longer available.” Your customer will be refunded, but he won't get his product. He might decide to stop shopping at your store and tell his friends and family about his bad experience. This can lead to a loss of customers and loss of credibility as an online retailer. 

Opt for solutions included with your website platform. This helps you manage your inventory more easily. 

Having an up-to-date online inventory is the best way to avoid losing sales and customers. Your PME MTL expert can recommend several tried and true technological inventory solutions. 

Are you shipping more than 10 orders a day? Are you looking for another way to manage your online business logistics? Is your warehouse at maximum capacity? Benefit from the space and logistics services of a 3PL provider. Read our article to learn more about this solution

4. Customer service: Always keep your online shoppers well informed

The e-commerce giants have created high expectations among consumers. Consumers expect the same high standard of quality from you.

Your customer wants to know everything, at all times. They expect you to not only give them the status of their order, but to advise them of any situation that may affect them: 

  • Can the consumer contact you by e-mail? Enter the response time on your contact page and send confirmation that their message was received. 
  • Is the delivery time for orders longer than usual? Explain why on the home page and add an alert to the shopping cart.
  • Is a customer placing an order online? Send them an email at each step of the way: order received, ready to ship, shipped. Remember to include the tracking number. 

An FAQ to help your online buyers

Your Frequently Asked Questions (FAQs) page should provide all the information the consumer needs to know. It can be consulted before and/or after making a purchase. The topics covered must be relevant and clearly explained. 

Some subjects you need to cover: 

  • Delivery options and fees
  • The return policy
  • Delivery times
  • Solutions when there is a problem with an order
  • How to contact customer service

Find out how to write a good FAQ with Shopify

A practical guide to launching logistics operations

The CEFRIO Guide will help you:

  • Define your product offering
  • Receive and process orders 
  • Ship an order to a customer 
  • Process merchandise returns 
  • Serve your customers
  • Put together a team

See the Guide (in French only). 

Get expert advice to develop a logistics plan now 

The current health crisis is pushing many consumers to order online. Many of them are enjoying their experience and will continue to buy online. Don’t delay – establish an e-commerce logistics plan to meet their needs and maximize your sales. Take advantage of the free services offered by your PME MTL e-commerce logistics expert. Talk to an expert in e-commerce logistics!

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This article was written in collaboration with Souad Laidi and Alexandre Skerlj, experts in e-commerce logistics at PME MTL. 

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