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The Logistics Challenges in the E-commerce World

E-commerce store owners and importers are well aware of the challenges of the end-of-year sales carnival, especially regarding logistics, shipping, inventory management, and bureaucracy. It starts in the initial stage of product import, continues with shipping difficulties and delays that affect the customer experience. It turns out that the solution is much simpler than you might think, and here it is before you.  

Selling products online is an excellent solution that allows businesses to increase profitability, especially during the sales carnival months of November to December, which extend into January. So yes, all you need is to import products, open an online store, promote them through various advertising channels, and make money without the fixed costs associated with maintaining a physical store. However, the main challenge lies not in marketing the products and maintaining the website, as many believe, but rather in all aspects related to logistics and the supply chain. There’s simply a feeling that logistics services are lacking, not functioning properly, and not incorporating necessary changes, skilled professionals, technologies, and efficient management.  


How much can logistical problems impact profits? It turns out, quite a lot. According to Amos Gabay, CEO of the FRITZ Group, a leading international shipping and logistics chain for over three decades, “The challenges and difficulties in logistics management among e-commerce store owners ultimately affect profits and the level of service provided to end customers. Therefore, it is necessary to emphasize them right from the start and build a stable logistics system that serves as a solid anchor.” One can understand Gabay’s words because a customer who does not receive their package on time is a customer who will not return to use the services of the shipping company that failed to provide a satisfactory response. They might also leave negative feedback online, which would harm the reputation of any business. Returning customers currently account for 50% of business revenue.  

There is no doubt that the main loss resulting from failures in the logistics system affects both the reputation and profits of the store. Today, approximately 50% of online store revenues come from returning customers, with an emphasis on satisfied customers. It is naturally easier to sell again to a customer who received good service than to acquire a new customer. A customer who received their order with quality and timeliness is more likely to consider purchasing additional products. In addition, as part of customer management, we gather information such as email addresses and phone numbers, allowing us to stay in touch and engage them with promotions and additional products. Conversely, an unsatisfied customer will not return and may even provide negative publicity, which would negatively impact the store’s future profitability.  

Another factor leading to losses is dealing with labor-intensive problems. For example, handling customers who did not receive their orders, dealing with mismatches between the ordered product and the one shipped, paying higher fees for transportation and shipping services, and more. Especially during the busiest sales months, time and human resources are expensive assets that need to be utilized wisely to maximize profits.  

How can a profitable and efficient logistics system be established? According to Amos Gabay, CEO of the FRITZ Group, “To create a profitable logistics system, one must ensure every stage of the logistics chain, from purchasing the goods from another country to shipping, handling customs regulations, storage, and reaching the company’s warehouses. Nowadays, giant companies do not deal with the logistics system at all. They prefer to use outsourcing services, which allow them to benefit from the full range of expertise in the supply and procurement chain.” In FRITZ, we put ourselves in the importer’s shoes. To understand the efficiency and profitability of outsourcing the supply chain, let’s take the example of the FRITZ Group, which has been leading the logistics chain for over three decades. They provide their customers with a 360-degree
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