When it comes to online selling during the festive, people seem to always be looking for holiday ecommerce sales conversion tips and ecommerce advertising tips.
Still, ecommerce sales tips related to logistics may be a much more important topic, says Rob Tillman, vice president of operations for Rakuten.
In this tips below, Tillman draws from his wealth of experience to help your ecommerce business face important challenges and avoid critical missteps. He also offers some holiday ecommerce sales and logistics tips.
Holiday Ecommerce Sales Challenges
What challenges do ecommerce sellers face during the holiday season? Tillman lays out some of the big ones below.
- Labor Constraints: Difficulty in finding adequate help, especially in the ecommerce industry. Workers along the supply chain are scarce.
- Capacity Constraints: Problems with the flow of products due to issues like port closures and congestion.
- Issues with Small Parcel Shippers: Services like Federal Express and UPS being at full capacity.
- Additional Surcharges: Carriers implementing additional surcharges without indications of removal.
- Availability of Product: Shortages due to capacity constraints affecting the supply chain.
Labor Constraints
You’ve no doubt seen restaurants closed recently because of being unable to find adequate help. Across the board, from fast-food chains to gourmet establishments, the dining industry has felt the pinch.
The fact is that this challenge extends to the ecommerce industry as well. Just like the restaurant sector, online businesses grapple with similar labor shortages. During the pandemic, those constraints have evolved.
In the beginning, it was about being able to bring workers in and keep them safe amidst rigorous protocols.
Today, with altered work dynamics and remote setups, employees who work at various points along the supply chain are simply not available — at least not at the numbers needed, leading to major disruptions.
Capacity Constraints
Another challenge involves the amount of product moving through the supply chain and the speed at which sellers can get products from their suppliers.
This isn’t just about raw numbers, but about the synchronization and efficiency of systems. Recently a major port in China was closed for a full week due to COVID concerns, emphasizing the fragility of global supply chains.
Similarly, congestion in ports from California to New Jersey, paired with bureaucratic red tape and other logistical nightmares, has slowed the flow of products considerably, affecting not just local businesses but global economies as a whole.
Issues with Small Parcel Shippers
Small parcel carriers are critical to online sellers when it comes to delivering products to customers in a timely manner. It’s the backbone of ecommerce logistics.
Yet services like Federal Express and UPS, giants in the parcel delivery world, have been at capacity since March of 2020, an unprecedented challenge for them.
This saturation doesn’t just affect delivery times but impacts the broader promise of reliable service. This puts added strain on ecommerce businesses even after they’ve made a sale, forcing them to scramble for alternative shipping solutions and manage customer expectations.
Additional Surcharges
While delivery delays cause headaches, they represent only one facet of the challenges created by these carriers. Most have implemented additional surcharges over the last year and a half, adding financial burdens on businesses already grappling with slim margins.
These costs, once implemented, show no signs of going away, possibly becoming the new norm in shipping.
This leaves ecommerce businesses in a dilemma: absorb the surcharges and compromise their profitability or pass the added cost on to their customers, risking potential customer dissatisfaction.
Availability of Product
Lastly, in the world of instant gratification, sellers may face issues with the immediate availability of some products — at least in the short term.
Whether it’s the latest tech gadget or a must-have fashion accessory, these shortages result from some of the same capacity constraints already affecting the supply chain.
The ripple effect is undeniable. However, they may also result in an extended holiday shopping season.
Sellers, in anticipation of these challenges, may need to wait until after the holidays, navigating the delicate balance of supply and demand, to stock some of the products most in demand from customers.
Holiday Ecommerce Sales Tips
What can ecommerce sellers do to meet these challenges, especially with the Holiday season approaching? Tillman suggests the following ecommerce sales tips.
- Be Transparent: Keep clients and customers updated about challenges.
- Give Regular Updates: Notify about delays and product shortages.
- Set Expectations: Educate clients about product delivery and availability.
- Micromanage Your Supply Chain: Oversee every stage, anticipate difficulties.
- Track Your Products Carefully: Be informed of the status of your products.
- Ask for Help: Seek expert insights on logistics and efficiency.
Be Transparent
First, be upfront with clients and customers about the challenges you face. In a world where trust is paramount, clear communication establishes reliability. Explain how you are attempting to meet their needs, whether through alternative suppliers or tweaking delivery methods.
At the same time, be crystal clear about the problems created by supply chain issues and delays with carriers.
Lay out the landscape as it stands, highlighting areas of strength and potential pitfalls. Be honest about the factors you cannot control, reinforcing the collaborative nature of buyer-seller relationships.
Give Regular Updates
Maintaining constant communication has never been more essential. Keep customers and clients in the loop with regular updates. It’s not just about informing them, but about forging a bond of trust.
Let them know about delays and product shortages as early as possible, allowing them to make informed decisions. Try to prepare them for the bumps in the road, creating an environment where they feel catered to.
Also tell them what you are doing to help alleviate those issues when they happen, emphasizing the proactive measures being taken.
Set Expectations
The landscape of ecommerce is shifting, and adaptability is key. Customers and clients need to adjust to the new normal when it comes to product delivery and availability. More than ever, transparency reigns supreme.
Use regular communications to make them aware of what is possible and what is unrealistic in the current climate.
By offering a candid overview, this gives customers and clients a better understanding of the limitations you and other ecommerce businesses face. It also prepares them for possible pitfalls and avoids unpleasant surprises down the line.
Micromanage Your Supply Chain
In times of uncertainty, a hands-on approach often prevails. Prepare for potential hiccups and keep customers and clients informed by micromanaging your supply chain. Dive deep into the details.
Keep tabs on what’s happening with manufacturers, suppliers, and delivery services at every juncture, ensuring a holistic view of operations.
Use that information to tweak your supply chain when necessary, allowing for more agile and responsive adjustments. By having this microscopic view, you can anticipate difficulties and take pre-emptive action.
Track Your Products Carefully
In the vast world of ecommerce, the devil often lies in the details. Know where your products are at all times. Track their journey meticulously, from the manufacturer’s floor to the customer’s doorstep.
This attention to detail allows you to see potential snags in real-time and react accordingly. For example, if your products aren’t on their way via air or sea in the next four weeks, you may miss peak holiday shopping times, affecting your bottom line and customer satisfaction.
Ask for Help
Recognizing when to seek guidance is a sign of a mature and resilient business. No one has all the answers, especially in a landscape that’s constantly changing.
Engage with industry experts, join relevant forums, or participate in webinars. By pooling knowledge and leaning into collective wisdom, you stand a better chance at navigating challenges effectively and efficiently.
To help you navigate the challenges and their corresponding solutions more effectively, here’s a comparison table outlining the main issues and recommended strategies:
| Challenges | Solutions |
|---|---|
| Labor Constraints | Be Transparent & Give Regular Updates |
| Capacity Constraints | Micromanage Your Supply Chain |
| Issues with Parcel Shippers | Set Expectations |
| Additional Surcharges | Be upfront about these to customers |
| Product Availability | Track Your Products & Keep Customers Informed |
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