E-commerce logistics: outsourcing versus insourcing

E-commerce logistics is a central issue in the success of an e-commerce company, and many e-merchants are wondering about the best strategy to adopt in order to optimize their logistics management.

iscover the advantages and disadvantages of in-house and outsourced logistics management solutions, and choose the best option for your business.

In-house logistics vs outsourced logistics

What are the advantages of keeping your logistics in-house?

1. A complete control of the supply chain 📦

Managing your own logistics guarantees a total control over your logistics flows: all the stages of the supply chain are in your hands, allowing you to have greater control over operations and processes, without being dependent on an external partner.

Opting for an internalized logistics organization makes it easy to manage operations such as quality control of goods received from the supplier - sometimes requiring very precise specifications - or returns management, where quality standards vary from one brand to another, from one type of product to another, and for which having control over its stocks and its own warehouse are valuable assets.

These aspects are particularly decisive and may justify internalization, especially for very specific types of products (second-hand items, products with a very high value, unique pieces of art, products that can be customized on demand, etc.) requiring precise know-how or specific storage conditions, sometimes making outsourcing difficult to envisage.

2. Flexibility and reactivity 💪🏻

Having control over your entire logistics also has the advantage of a greater flexibility: making strategic adjustments quickly is easier when you manage your logistics from A to Z. With an in-house logistics management, it is easier to react quickly to an emergency or unusual situation (special shipments, last-minute orders, etc.).

In-house logistics also allows you to grow at your own pace, by investing and recruiting little by little, according to your needs, to the context and to the growth of your business. In the case of very seasonal activities, an internalization can also be more relevant since it allows you to benefit from more flexibility.

For the same reason, in-house management can be a good solution to start a business, in order to first understand all the stakes and specificities of your activity, before outsourcing when things get bigger.

3. Customization 🎁

If the customer experience is particularly important to you, and you want to focus on a high degree of order customization, managing your own logistics may be a good option. This gives you complete freedom when it comes to packaging your products, using branded boxes or inserting handwritten thank you cards, for example. Once your staff has been trained to do this, you can take great advantage of this marketing strategy.

While there are many benefits to managing your logistics in-house, these can sometimes turn into disadvantages (complex staff management, a lot of fixed costs, difficulties to grow) or simply not be suited to your e-commerce model.

What are the advantages of logistics outsourcing?

1. Save time to grow more easily 🚀

The main advantage of logistics outsourcing is the significant time saving it allows, compared to in-house management. Entrusting your logistics to a specialist allows you to relieve yourself of a huge number of time-consuming tasks (warehouse handling, packaging, negotiation of carrier contracts, etc.) and, above all, to focus only on the development and growth of your e-commerce website.

Above all, if your e-commerce tends to grow, keep on managing it internally can become difficult: a specialized logistics partner will be able to manage your shipments serenely, even during major volume peaks, allowing you to grow serenely.

  1. Save money 💰

As a corollary, outsourcing its logistics to a specialist also has an interest in terms of costs in the vast majority of cases, because it allows you to make savings thanks to the economies of scale allowed by the volumes handled by an external service provider. A logistician will necessarily benefit from a greater negotiating power than an e-merchant, thanks to the mutualization of its customers' volumes.

By working with an external partner, the company basically only pays for what it uses, the invoicing is more efficient and the costs are lower. Billing is generally done per parcel shipped, and according to the actual storage (per cubic meter, per pallet, per linear meter or per shelf).

Outsourcing thus enables e-merchants to keep their investment capacity for strategic expenditure items that are directly linked to their core business.

  • Benefit from the expertise of a specialist 📊

  • Opting for outsourcing also offers the possibility to rely on a true specialist in the sector and thus to benefit from his know-how and expertise. Many logistics service providers have a specialization (B2C, B2B, textiles, etc.) that can be a real asset for your e-commerce, since it allows for greater optimization of flows and processes.

    Outsourcing your logistics also means forging a real partnership, and being supported on a daily basis in the strategic decisions useful for business development. The logistician has a real advisory role with his customers, in terms of choice of sales platforms for example: possibility to diversify his sales channels via marketplaces for example, with easy interfacing via APIs.

    In brief

    Choosing how to deal with logistics is a crucial decision for e-merchants, which will have an impact on the development and growth of the brand. If both solutions have clear advantages, the choice will depend, as we have seen, on the maturity of the business, the specificity of the products to be handled as well as the growth ambitions of your e-commerce site.

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