April 1, 2020
eCommerce Logistics for Freight Forwarders – Part 2 – How eCommerce Logistics Works

eCommerce Logistics for Freight Forwarders – Part 2 – How eCommerce Logistics Works


So now my next question is how is logistics
informed with ecommerce and how we serve that industry we can divide focal points the first
one is sourcing and is normally the expertise of the person the entrepreneurs that is going
to go and sell online they know how to source and they have a product that they know they
can bring it from China, from Europe, South America, where ever and they know there is
an audience that wants to buy that product and they start selling it online so they have
to source the product really from wherever it is manufactured to the fulfillment center
where it will be fulfilled. Then you have the online part which is the
website, the affiliation programs of many other websites to promote the software in
all those market places and have a nice user experience so the user can continue buying. And the third component is meeting that delivery
promise after the user buys you have to get those goods there on time to be sure that
they come back and buy again. If you look at the three components the first
one and the last one is our logistics and the one in the center is the one that is more
technology the way we see it at Magaya is ecommerce is that it is a mix between technology
and logistics. Logistics is the main component apart from
being online and having your store with a nice looking look and feel and having a nice
marketing program to get the users there you have to be able to manage that inventory have
to able to main those store with that inventory that you are ready to sell and be able to
fulfill that delivery. So logistics is very important and if you
notice Amazon is the leader in ecommerce is the one that is investing in their logistic
structure because they know that logistics is the driving factor, okay. So then will one of the retailers be how will
the logistics of everything that we are going through will they be willing to outsource
the logistics the good news is that if they start selling online you start from your garage
in your shorts in there filling the orders that you have in the day then after the business
starts growing and you start getting more orders you have two options you either start
renting a warehouse, warehouse personnel, yourself and start managing a kind of operation
you didn’t sign up for when you wanted to sell online and it is an expertise you don’t
have or you have the option of outsourcing to people that actually know how to manage
a warehouse and to staff a warehouse that they have they are handling all the customers
and overhead that you will have to rent the warehouse yourself and it will provide , it
provides the ecommerce retailer a flexible background they can start with just a few
racks with a couple spaces in a rack in a few locations and then if the business goes
well then you can add more you don’t have to go and hire more people rent another warehouse
because your sourcing into a 3PL they will give you #PL they will give you flexibility. So ecommerce retailers their willing that
is their first approach these days probable a few years ago that was not the mindset but
in the first approach these days it is. Okay so let me go now over the fulfillment
process so there fulfillment what is the process how is that fulfillment process working. So I divided the screen in three parts of
the topics the consumer at the center is the ecommerce retailer and the bottom is the 3PL
okay. 3PL is the company that is going to manage
the fulfillment process for the ecommerce retailer so everything starts when the ecommerce
retailer purchases the inventory and that inventory arrives to the warehouse so after
the warehouse fulfillment the 3PL will get those goods receive it in the warehouse at
that time the system on the 3PL needs to update the online store of the internet retailer
telling that the inventory we received is ready to ship online okay so it will be available
for the consumer to come at one point using the web browser connected to the server of
the online retailer whatever place it is and then that order will come through the system
of the 3PL so when the user places an order online whatever it is it will come through
the system of the 3PL you have to go use the handheld guns scan locations scan the items
pick and pack and get them ready to ship and what happens then you connect the shipping
carriers Fedex,USPS, UPS, whatever you are using and then almost at the same time the
truck will take the goods and deliver them to the final consumer that is the whole process. At the bottom is what the fulfillment center
will do. AT the top is everything else you see we have
like green arrows of what is automatic and what is electronic most of it is electronic
that is why it is called ecommerce so that actual things that you have to do manual is
normally what you are used to receive inventory to pick and pack and ship service in online
business if you have the right tools it is no different than the normal things you do
you receive the online store update as you ship out. If you have the right tools and those tools
are available today ok so challenges which is something that is always on my mind here
is the process receiving the process of the 3PL center receiving the online store receiving
online orders pick and pack shipping the orders and update the final consumer there’s a
couple things here which is that ecommerce has high technology Amazon has a video that
they are going to deliver the product they have all that and that is their operation
they have million and millions they have to do. That they are obligated on a smaller scale
there’s no need for that. If you have a few thousand per day you can
do that with other technology and the accuracy of that and ecommerce is unforgivable for
that is someone receives something else that wasn’t what they purchased it won’t recognize
but with the right system that is possible what I wanted to explain in this slide is
that when you have the right system with the connections to the online stores you will
have enough technology to be accurate and you have enough technology to complete and
that is the idea.

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