What is eCommerce Logistics in UK & How Does it Work?

Building robust order fulfillment and shipping capabilities is a make-or-break imperative for eCommerce businesses. Subpar logistics can completely ruin the post-purchase experience for online shoppers and inflict long-term damage to your brand. On the flip side, seamless e-commerce logistics delight customers, drive loyalty and sales, reduce costs, and provide a critical competitive edge.

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Mastering the end-to-end delivery process - from managing inventory availability to getting purchases efficiently into the hands of customers - is mission-critical for retailers operating online. Delivering orders on time, without errors or damage, and offering conveniences like tracking and return options allows shoppers to enjoy a smooth, satisfying buying journey.

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Therefore, investing in eCommerce logistics should be a top priority for any business selling products through online channels. The logistics strategy and operations significantly impact the customer experience, cost structure, environmental sustainability, and capacity to scale up sales successfully. By optimizing fulfillment from the warehouse to the doorstep, eCommerce brands can gain an advantage, prevent delivery issues from tarnishing their reputation, and unlock growth in revenues and reach.

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In this comprehensive guide, we’ll explore:

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• What is eCommerce logistics?

• Importance of eCommerce logistics

• eCommerce order fulfillment process

• Shipping and delivery models

• Optimizing your eCommerce logistics

• Leveraging logistics technology and solutions

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What is eCommerce Logistics?

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eCommerce logistics refers to the behind-the-scenes operations involved in getting customers’ online orders delivered efficiently. It involves processes like:

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• Warehousing and inventory management
• Picking and packing orders
• Shipping and delivery
• Tracking shipments
• Managing returns

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The overarching goal is to seamlessly integrate order fulfillment operations to deliver a high-quality post-purchase experience.

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Why eCommerce Logistics Matter

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Logistics capabilities make or break the customer experience and impact the following key factors:

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• Customer satisfaction - Fast, accurate delivery increases happiness and retention.

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• Costs - Optimized fulfillment and shipping reduces operational costs.

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• Competitiveness - Retailers with robust logistics gain advantage over those with poor fulfillment.

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• Growth - Scalable logistics supports business growth into new markets and channels.

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• Sustainability - Efficient processes reduce waste, emissions, and environmental impact.

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eCommerce Order Fulfillment Process

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Let’s look at the critical steps involved in taking an eCommerce order from purchase to delivery:

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1. Order Processing

Online orders are received and logged in the order management system. Details like items purchased, delivery address, and contact info are recorded.

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2. Payment Processing

The payment gateway processes the transaction securely. Payment status is updated in the system.

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3. Order Confirmation

A confirmation email with order details and tracking info is automatically sent to the customer.

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4. Warehouse Operations

Picking - Warehouse staff pick the purchased items from inventory.

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Packing - Items are carefully packed to avoid damage and labeled with the order info.

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5. Shipping Preparation

The shipment is processed as per the delivery service and customer requirements:

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• Calculate shipping rates
• Generate shipping label
• Decide packaging needed
• Select pickup and delivery service

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6. Order Dispatch

The packed parcel is handed over to the selected courier or shipping provider for delivery.

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7. Shipment Tracking

Customers can track the real-time status of their order during transit using the courier tracking ID.

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8. Delivery

The customer receives their order. Some logistics models involve collecting payment upon delivery.

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9. Returns Management

If customers return products, logistics operations for returns, refunds, or exchanges kick in.

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eCommerce Shipping and Delivery Models

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Choosing the right shipping methods and delivery models is key for cost-effective logistics. Here are some of the main approaches:

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Dropshipping

Items ship directly from the manufacturer or wholesaler to customers, bypassing the retailer's warehouse.

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Pros

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• No inventory or fulfillment costs
• Wide product selection

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Cons

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• Low margin
• Little control over delivery

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Warehousing & Shipping

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The retailer stores inventory in their own warehouse and handles fulfillment in-house when orders come in.

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Pros

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• Full ownership over fulfillment
• Faster deliveries

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Cons

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• High fixed costs for warehousing space and labor
• Outsourced Logistics

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Leverage external specialists like Amazon FBA, ShipBob, etc., to handle warehousing, inventory, packing, shipping, and returns.

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Pros

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• Cost-effective, scalable solution
• Access to expertise and infrastructure

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Cons

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• Less control over operations
• Potentially higher variable costs

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Hybrid Model

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Combine elements of different models. For example, use FBA for key markets while direct shipping from a own warehouse in the home country.

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Tips for Optimizing eCommerce Logistics in UK

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Here are some proven strategies for getting your eCommerce order fulfillment running smoothly:

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• Choose a strategic warehouse location - Consider proximity to customers, transportation links, labor costs, and real estate expenses.

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• Build an accurate delivery time estimator - This minimizes missed expectations by displaying realistic shipping timelines.

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• Offer multiple shipping options - Giving customers choices like express delivery versus regular mail builds satisfaction.

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• Integrate shipping with inventory - Linking these systems ensures overselling is avoided and accurate promise dates are conveyed.

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• Enable order tracking - Shipping tracking pages and shipment status notifications create transparency.

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• Right-size packaging - Customized boxes reduce parcel dimensions, cutting shipping costs and environmental impact.

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• Centralize multichannel order management - Unified systems make fulfillment smoother across online storefronts, retail stores, marketplaces, etc.

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• Leverage automation - Warehouse robots, automated inventory control, and other technologies streamline operations.

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eCommerce Logistics Technology and Solutions

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Investing in logistics software and tools creates agility, efficiency, and data-driven decision-making capabilities.

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• Order Management System (OMS)

A central platform to manage multichannel orders, inventory syncing, fulfillment automation, shipping integrations, etc.

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• Warehouse Management System (WMS)

Optimizes warehouse operations like inventory control, picking/packing, workflows, and labor management.

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• Shipping Integrations

Connect top couriers like Royal Mail, DPD, and Hermes for label printing, tracking, discounted rates, pickups, etc.

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• Route Optimization

Plans optimal delivery routes, balancing factors like total distance, fuel, and vehicle capacity constraints.

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• Reverse Logistics

Streamlines returns management, including refunds, exchanges, warranty claims, and recycling.

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Conclusion

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Creating seamless eCommerce logistics capabilities provides a key competitive advantage for online retailers. Leveraging the right combination of fulfillment models, delivery options, operational best practices, and technology solutions enables excellent customer experiences, cost control, and scalability.

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By optimizing your end-to-end order fulfillment process and continuously improving it, you can build a world-class post-purchase experience for shoppers.

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To explore eCommerce shipping solutions for your UK online store, check out SHOPLINE UK's shipping partners.

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