Growing E-Commerce Forces Transformation in Distribution

Author: Alina Răfoi
Date: 07- 12- 2015

ERP-e-commereceEven since its beginning, e-commerce has transformed the way stores sell their products and how buyers buy them. Let’s consider the following figures:

  • in 2014, the domestic online retail has exceeded 1 billion Euro, compared to 600 million in 2013 (as GPeC has estimated)
  • according to the last census, Romania has a population of 19,7 million inhabitants of which over 10 million are Internet users
  • Romania currently has over 5000 online stores (and their number is constantly growing)

These figures show the great potential of e-commerce in Romania; it is perhaps among the few industries with such a rapid growth. Yet, many overlook logistics behind the e-commerce, which is most often more complex than it seems. There is no point in having top-notch products and an winner marketing strategy if logistics is neglected.

With the increasing number of online orders, logistics and distribution must be aligned and need to adapt quickly. Therefore, manufacturers and distributors have begun to adapt to the new trends in order to meet the end-customer demand and have a successful business. For a parcel to reach its destination it has been developed an entire industry, logistics being a key-element in this equation of speed. New jobs were created, but also services, warehouses, transport, logisticians or courier companies to support the growth of online sales.

These are just a few trends we have identified, that e-commerce companies (either experienced or new) have to take into account.

In-house or Outsourcing Order Processing
E-commerce companies have to take a lot of logistics decisions when they establish their business model. Besides deliveries, they must also asses the order processing and must decide whether to invest into in-house or if outsourcing is more advantageous. Order processing involves a product all the way through it until it is ready for parcels and delivery to the customer .

Outsourcing Distribution
The trend for e-commerce companies is to focus on a winning marketing strategy and outsource to the logistics companies the delivery of goods, as they already have the know-how, the management platform and necessary fleet for this type of activity.

Designing a Proper Logistic Flow
Before choosing a logistics operator, an e-commerce company must answer several questions, such as: which areas are serviced? Which are the accepted payment methods? How much does an average parcel weight? What is the average number of orders delivered per day? Depending on these answers, the operator can then choose, depending on the offers received and their experience with this type of parcels and accepted payment methods.

They say that the success of e-commerce companies is influenced by the software solution that manages the entire business. To have an successful online business you need a platform for e-commerce integrated with an ERP solution to provide automated communication with customers, suppliers or your partners, to streamline your processes and track and improve specific order processing indicators. BITSoftware offers a complete and integrated solution for distribution, that includes operational flows management, warehouse management, e-commerce for distribution through online channels, financial management, customer service management and business analysis and reporting. Our SocrateCloud solution can be integrated with Magento and other e-commerce platforms, too.