Build scalable logistics plans for e-commerce businesses

How to Build Scalable Logistics Plans for E-Commerce Businesses

By Chris Crutchley on August 30, 2022
CBIP’s Nick Bartlett was featured on the EcomPartner podcast. Check out the highlights from his interview to learn how supply chain disruptions affect Amazon sellers and how you can approach the future of e-commerce logistics.

Recently, CBIP’s own Nick Bartlett was a guest on the EcomPartner Podcast. In Episode 23: Why Innovative Logistic Strategies Can Save Your Business From Spiraling Down, host Stefano Puddu and Nick discussed the relationship between supply chain disruptions and Amazon sellers, how to scale e-commerce operations, and much more. 

Here are the key takeaways.

What’s going on in China

Although much of the rest of the world seems to have moved on from COVID-19, but much of the East hasn’t. In fact, for those living in China and Hong Kong, the pandemic is still part of everyday life. And that means there are still some significant challenges for companies operating out of the region.

The Hong Kong-China border remains very disrupted due to ongoing, significant COVID protocols that require shippers to transfer freight from the mainland into Hong Kong. CBIP, for instance, has had to make quick adjustments to deal with the significant number of disruptions in the northeast part of the country like port closures in Shanghai and Ningbo. 

On top of all of that, China is still being hit hard by the pandemic, especially in terms of labor shortages. But it’s not all bad news: there’s likely a lot more positive growth coming in the second half of the year. 

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First-time seller? Seek out an expert 

“Anyone looking to manufacture from a remote destination should certainly have someone that is close enough to what's happening on the ground. You need realistic advice about things to either avoid or to focus in on in a respective region.”

The variances across factories in southern China stem from restrictions on facilities related to provincial protocols. Thus, having the right partner to help businesses navigate the risks related to the changing landscape is crucial. 

There’s no substitute for on-the-ground experience and expertise, and putting in the work to understand your market and consumer base early on pays dividends. As time goes on, more and more people are choosing to explore other promising markets like Taiwan, Malaysia, and Vietnam — but the only way to ensure success is to get a realistic view of the marketplaces and norms where you plan to operate.

Shipping by air vs. sea

Trying to decide between shipping by air or sea? As outlined in the interview, it comes down to the economics of your product and the breakeven points for pricing. These will determine which mode of transport suits you best and, in turn, how to maximize efficiency throughout the shipping process. 

There are tradeoffs to each, but it’s also essential to keep an eye on developments in the industry. If massive, self-flying cargo drones become the norm, we’ll all need to go back to the drawing board.

What stands in the way of sustaining cash flow 

“Obviously volumes are really imperative. It’s probably the first crucial metric. Then, you also need to account for operating margins.”

There are two important factors to keep top of mind when it comes to sustaining cash flow: volume and operating margins. 

But besides these business basics, there are other key metrics that don’t fit neatly in an excel spreadsheet. For example, customers' needs play a huge role. Do they expect a product right away? Would they be willing to pay a premium for quick shipping? How important is free delivery in their decision to make a purchase?

It’s a difficult time to find balance. Inflation is disrupting prices for consumer goods, and the effects are felt everywhere. But before you go drastically raising prices, it’s worth taking a long hard look at where your customers’ expectations stand today and where they might be tomorrow.

The biggest challenges for today’s Amazon sellers

Moving forward, the role of a typical Amazon seller will change. The economics are also getting even more difficult. Let’s break that down. 

Amazon sellers are getting squeezed from both the percentage that Amazon takes plus the current inflated costs of freight. That said, the sellers who have a decent volume and good outputs will be able to survive. But what about the smaller players? They’re generally forced to play a waiting game while waiting for costs to come down.

In all likelihood, this will lead to a lot more aggregations taking place with bigger buyers in order to build efficiency at scale. Amazon sellers need to be wary of this and, if necessary, begin thinking about alternatives. 

RELATED READING: The 3 Most Important Steps for Scaling Your E-Commerce Business

Need a resilient supply chain? Get an adaptable logistics plan

“A big part of our company positioning as a provider is that we believe all businesses and brands should be focused on having agile logistics, which means that they should know that they can change parts of the logistics program if they need to.”

The importance of staying agile can’t be overstated. It’s imperative to be proactive and keep on the lookout for solutions as you encounter new issues — and take action as quickly as possible.

This may, for example, involve utilizing satellite warehouses with different key locations depending on your peak season. That’s why having a network of on-the-ground, regional experts is a smart choice.

For instance, if all your volume is going to the US, there may not be a benefit of paying fees to ship out of an expensive or complicated region. On the contrary, if you are fulfilling orders to various countries around the world, then a strategic hub will pay off (even if the fees add up). 

Want to hear the rest of Nick’s thoughts? Check out the full episode here

CBIP gives your supply chain what matters most: options

Multi-channel selling is key to success in a competitive e-commerce environment. That’s why CBIP works to stay up to date on marketplaces around the world. We’re ready to formulate a custom plan based on your unique business needs and help you stay agile.

Our team of regional experts is ready to help you expand to new markets with confidence, all while integrating industry-leading technology across our operations. 

Whether you’re a first-time seller, an Amazon veteran, or simply looking for general advice on how to build a scalable global logistics plan, schedule a free call with one of our experts.

About Author

Chris Crutchley

Chris Crutchley is CBIP’s director of operations and finance. He has over a decade of corporate finance and operational expertise throughout the Asia Pacific.

In logistics, Chris strives to continuously innovate and challenge the industry’s norms in order to offer clients world-class service that emphasizes clear communication.

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FAQs

Every e-commerce brand or seller is a little different. So, the best way for us to provide you with a detailed quote is to fill out our online questionnaire here and from here we can walk you through the various options available to you with CBIP Logistics.

No, we do not charge the higher fee associated with long-term storage. No matter how long the goods remain in our warehouse. They are charged the same rate for inventory storage.

Yes! We can store your inventory and replenish Amazon as necessary, helping you adhere to Amazon’s strict rules and regulations for packaging, labeling and shipping.

We charge for storage by either cubic meter, sqft or per pallet / racking space per week. It depends on the request from the customer as one-size doesn’t fit all. It would be better if you schedule a call with us

We provide a variety of services in the logistics landscape which includes Ocean Freight, Airfreight, Domestic Delivery, Warehouse & Distribution and Customs Clearance & Brokerage.

We offer several types of warehouses that are tailored to your requirements and vary among countries, e.g. Bonded Warehouse, General Warehouse, Consolidated Warehouse and Distribution Center.

Yes, you can track it from our platform by using the “Log In” function and access to “B2B” which is dedicated to track any shipment you have with us. This is a real-time platform which integrates with some major carriers so from here you can get the visibility of vessels on the globe map.

  • Origin Management: digital PO management and connected suppliers supported by agnostic 3PL vendor management capabilities.

  • Shipment Tracker: real time tracking also vessel tracking to let you know where the goods are.

  • Destination Management: platform manage the delivery to Distribution Centre and update frequently on platform.

  • Paperless Handling: we centralize the document hub on the platform for shipment-by-shipment. From here you can get the full documentation of a particular shipment within a click.

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