Supply Chain Strategy Tips for E-Commerce

eCommerce is expanding rapidly to be able to answer the customer's needs. However, many businesses still struggle to implement this specific model. The risk of going off-course is real, considering the fact that other aspects might be neglected.

A supply chain is a whole network that guides the product on its path from the manufacturer to the final consumer. The strategy you choose will determine the profit. Every business owner wants to have the lowest costs possible while keeping the customer's satisfaction at maximum. The partnerships with your suppliers and distributors are crucial for the strategy. Keep in mind that you should find and implement a strategy that works for your specific niche. Sites like Canada casino reviews offer online service, so their approach differs from selling physical products.

How to approach the supply chain strategy? Read on and find out more!

Determine your needs

Before you pick a strategy, you need to know what works for your business. There are a few essential points that you should consider. Start by determining whether you will keep inventory. Keeping inventory gives you more control over the process. The downside is that the merchandise can increase the operational costs, as you will need a large warehouse and more employees.

Connect directly with the manufacturer

Sourcing goods directly from the manufacturer is an excellent strategy to cut down on costs. However, keep in mind that it all depends on your business size. In most cases, manufacturers only sell in large quantities and don't work with small retailers. However, that doesn't mean that you won't find one as a small retailer. Some smaller manufacturers won't be attractive enough for large distributors, so try to approach them.

Clear communication

Every single part of the supply chain is essential. The connection between them allows a smooth and uninterrupted process. When you form a partnership with different partners, make sure that you are clear. Discuss any potential risks, determine the outcomes, and be clear about your expectations.

Consider drop shipping when applicable

Dropshipping is a very convenient method which is widely used for delivering goods to the customer. The process involves transferring the order to another company, which will ship the order on your behalf. This means that you skip a large part of the process, so you save time. Also, you save money by not having to store the items in your warehouse.

One of the enormous benefits is that you don't have to invest money in stock. This allows you to expand the product range to suit your customer needs without any risks. However, make sure that you are aware of the downsides too. This is a specific method, so it may not work for particular products. Some partners might increase prices once the retailer becomes dependent on them. You have no control over the shipping company too.

Use the warehouse space efficiently

The costs tied to operating a warehouse can be pretty high. These will have an impact on the price of your products, so you want to reduce them whenever possible. In most cases, the costs will take 15% to 20% of the order price. Make sure that you use the space efficiently. The warehouse layout should allow productive workflow and maximum storage space. Also, consider maximizing labor efficiency and product flow.

Final thoughts

Every business model should come up with a supply chain strategy that works for their specific niche. It is all about reducing the costs while still keeping the quality of the process. The efficient use of the warehouse and outsourcing the shipping process are excellent tactics.