For many e‑commerce merchants, logistics management can become a major challenge. However, there are now solutions that allow you to outsource logistics, reducing friction while keeping costs under control. As key e‑commerce moments like Black Friday and year‑end holidays approach, this issue becomes more critical than ever.
Rakuten, the e-commerce giant, introduced its Fulfillment Network about a year ago, offering e-merchants an opportunity to simplify their logistics management at a lower cost. Let's discover how to optimize logistics in collaboration with Rakuten.
Understanding the Logistical Challenges of Independent E-commerce Regardless of their size or the products they sell, all e-commerce merchants face similar logistical challenges that can significantly influence their activities:
- Storage: Storage costs are among the most significant expenses, varying according to the warehouse location, capacity, and product storage duration.
- Order Preparation: Sorting, packaging, and verifying orders before shipment also constitute logistical costs.
- Delivery: Delivery fees have a major impact on the customer experience, and they depend on the different services offered (home delivery, pickup points, etc.).
- Customer Service: Managing lost, damaged products during delivery, or package returns is a significant cost associated with customer service.
- Insurance: It is essential to insure goods against theft, loss, or damage.
According to Rakuten, on average, logistics costs represent about 11% of an e‑merchant’s expenses, and they rise every year—especially to reduce delivery times and satisfy consumers. Delivery management accounts for about 50% of these costs. The challenge is therefore to control these costs while delivering quality service, particularly regarding delivery, to retain customers.
Logistics Cost Optimization
To master and optimize logistics costs, e-commerce businesses can act on several fronts.
The first involves optimizing inventory management. The more products you have in stock, the higher the costs. It's therefore crucial to maintain minimal stock while avoiding stockouts. The appropriate strategy is to define a minimum stock level and restock as soon as this threshold is reached. It's essential to anticipate periods of high demand, like Black Friday or sales, and adjust stock levels accordingly.
Another way to cut logistics costs is to increase the average order value of your customers. For example, you can offer free shipping for orders above a certain amount. According to Rakuten, 58 % of shoppers add items to their cart to reach the free‑shipping threshold.
Logistics Outsourcing
To simplify these logistical challenges and streamline costs, e‑commerce merchants can outsource their logistics. This is exactly what Rakuten offers with its Fulfillment Network. This solution lets you offload logistical concerns, including during peak periods like year‑end holidays or Black Friday.
The benefits of this outsourcing are multiple. The service allows you to rely on a unique partner who takes care of each step of the logistics chain, thus reducing your costs. The logistics service handles the receipt of goods, unloading, storage, order preparation, delivery, after-sales service and return management.
Outsourcing also offers considerable time savings. Managing customer complaints and transportation-related issues can be very time-consuming for e-commerce professionals. Additionally, it allows you to focus more on business management rather than low-value-added tasks, such as order preparation, which are entirely handled by Rakuten. This approach is particularly beneficial during peak periods, like year-end, when order management can become complex and cause delays.
In terms of pricing, the advantage is that you have transparent and precise pricing based on package weight, delivery methods, and storage duration. Storage fees with Rakuten Fulfillment Network are, for example, free when products are stored for less than 5 weeks. Outsourcing certainly has a cost, but the time and productivity benefits make it a very advantageous operation for merchants, guaranteeing peace of mind, especially during peak periods.
