5 steps to successfully switch from your current logistics management

Moving from a logistics organisation to another usually raises a lot of questions and concerns for e-merchants but can bring them profitability and quality improvements. Badly orchestrated, this change can be synonymous with And with shipping interruption, higher costs, poor quality of service… Those are among the numerous fears e-merchants experience and by which they are discouraged while considering a new supply chain management. Rest assured, we can help you prepare for this change by following these 5 steps.

1- Define scope of work and specifications

Before taking the decision to radically change the way you deal with your logistics, it is crucial to clearly define your needs. This will allow you to assess which logistics organisation suits you best. To do so, writing a clear requirements document appears essential to take the right decision:

• Why do I need a change? In other words, what motivates your wish to shift from your current logistics organisation? A time-consuming way of working, a cost optimisation will, frustration regarding your current service provider or more simply a significant growth are among the most common causes. Whatever the reason, those questionings must guide your search and will help you choose the most suited way of working. 

• What do I need?  Once you’ve determined the pain points you want to tackle, you have to ask yourself what essential features you need and which one will be required to move forward: better shipping times, negotiated rates, larger choice of delivery methods, wider scope of delivery, packing options, e-commerce integration, monitoring interface? 

• How much am I willing to spend? This dimension is particularly important and needs to be assessed based on your sales forecast as well as your current logistics costs.

Once your specifications are defined, you should be able to have a clearer vision to start comparing the different options to consider. 

Your stage of development as well as your mid-term growth objective are two factors you should definitely take into account to make your choice. 

Dealing with your logistics in-house with your own storage facilities and employees offers a lot of flexibility and is quite convenient when launching an e-shop, as sales forecasts are usually uncertain and shipping volumes are likely to be low at first. This logistics management method allows you to keep maximum control of your products and a great freedom in terms of order preparation. 

During the growth phase and once the business is stable, this way of working may prove insufficient: difficulty in hiring new employees, will to benefit from negotiated rates, time-consuming organization, fluctuating volumes due to peak periods etc. Starting to work with specialist logistics partners can be relevant in order to benefit from new services such as parcel pick-up, label generation or negotiated rates.

Switching to a single e-commerce fulfillment partner is more suited in the context of exponential growth, whether effective or expected, and will enable you to release from the constraints of a logistics in-house and to focus on central activity for your business to grow.

3- Compare the offers and prices thoroughly 

Once the ideal method is identified for your business, you should get on with a rigorous comparative analysis of the offers and services provided (especially while looking into a collaboration with a logistics partner) that you must put in perspective with your initial specifications in order to validate the listed requirements. 

Apart from those matters, you will have to compare the costs before moving to another logistics organization which can be quite hard due to the high variability in cost structure from one logistics provider to another. Make sure to consider pricing in its entirety while comparing two offers and do not hesitate to ask for precise quotations that include several sales and growth scenarios. This very important stage will lead you to avoiding hidden costs that are very common in logistics.

4- Consider the timing

Depending on the solution you will choose, the transition can take some time and you may have to face some delays and setbacks (IT developments, contractualisation and legal points, set-up time etc.) 

Keep in mind that there is no ideal time of the year to shift and that this decision should be linked to your sales cycles and seasonality. What is crucial is to be ready to face sales peaks and to have a well-oiled organisation well ahead of those periods: if your decision to switch your logistics organisation is driven by an increase in volume or by anticipated peak moments, make sure that the partner you chose is able to be operational quickly and to offer a seamless transition. 

Whatever the solution chosen, a logistics transition implies to pay particular attention to details in order to avoid nasty surprises. If you’re dealing with your logistics in-house, you will for instance have to be cautious with HR management if you have to let some employees go. It is also important to check your carriage contracts and the tariff advantages you may benefit from and that you might lose by stopping the collaboration. 

If you’re about to start working with a new logistics partner, be sure to inquire about the terms of engagement and cancellation policy (period of notice, guaranteed supply, contractual penalties etc.) by reading thoroughly your contract before launching a collaboration with a company. 

In short

Switching the way you deal with your logistics is a crucial decision which often happens to be necessary. If you’re well-prepared and well accompanied in this transition, you should be able to make the most of it and to grow in a sound way that fits your development ambitions. 

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