As the world becomes increasingly digital, more and more consumers are turning to e-commerce for their shopping needs. And while online stores have provided countless benefits, including convenience, choice, and access to global markets, they are not without their challenges. Many e-commerce stores have been struggling to manage the growing complexities of their supply chain, and it’s an issue that requires attention.
In today’s world, a modern supply chain isn’t a linear, one-way street. Instead, it’s an ecosystem of multiple participants working together in complex relationships to fulfill a common goal. In e-commerce, supply chain participants can range from product manufacturers, shipping and logistics companies, warehousing and storage facilities, payment processors, and even social media influencers. As a result, there are numerous points where something can go wrong.
For starters, customer expectations have become increasingly high. Consumers expect that the products they purchase online are available for delivery as quickly as possible. And with Amazon Prime setting a two-day shipping standard, e-commerce companies have been trying to keep up. This has put a lot of pressure on e-commerce businesses to speed up their delivery times. However, quicker delivery times can increase the strain on an already overburdened supply chain.
There is also the issue of inventory management. With more than 2 billion online shoppers worldwide, it is critical for e-commerce stores to have enough inventory to meet the demand. It is even more important for retailers to ensure that they have enough inventory on-hand in their warehouses, but not so much that it unnecessarily ties up resources. Therefore, the supply chain needs to balance the level of inventory, including ordering the right amounts, in the right quantities, at the right times, while keeping the cost of goods sold (COGS) to a minimum.
Another significant challenge faced by e-commerce stores is handling returns and exchanges. Because the customers cannot see or touch the products until after receiving them, online shopping can result in more returns than traditional shopping. E-commerce stores, therefore, need to have efficient processes in place to handle these returns. Failing to address returns correctly will result in higher inventory costs, damage to a brand’s reputation, and even loss of customer loyalty.
There is no question that supply chain challenges will continue as e-commerce continues to expand globally. However, these challenges are not impossible to overcome. The supply chain hurdles faced by e-commerce stores are multifaceted and require proactive measures to ensure unified operations and customer satisfaction. By addressing the issues, e-commerce businesses can overcome the challenges and thrive in the highly competitive, online marketplace. As the e-commerce scene evolves, the key will be adaptability, innovation, and a customer-centric approach to stay ahead in the game.
—Kari’Ola Etti, St. Onge Company
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