You have a product idea, have been bouncing around brand names for the last three months, and are realistically planning how to fund the launch of an online store. Congratulations — you’ve made it farther than most aspiring e-commerce owners. However, the real process is only beginning. How will your e-commerce business operate on a day-to-day basis?
To set your e-commerce store up for supply chain success, don’t overlook these critical details.
Determine A Few Initial Logistics Details, Then Research Suppliers
Before you delve into vetting different supply chain vendors, you need to decide on a few things — after all, what is e-commerce if not for the vast assortment of options it provides business owners. Above all, what kind of supply chain vendors are you looking for? This will depend on whether you’re dropshipping, buying wholesale, product sourcing or creating the products yourself. You also need to determine whether you’ll use domestic or overseas suppliers. From there, use directories like ThomasNet (domestic) and Alibaba or Oberlo (international), contact trade magazines and supplier associations, and fill in any gaps with Google to create a list of supplier contacts to start vetting. You can also ask professional contacts for supplier referrals or reach out to non-competing retail brands for vendor contacts.
Clearly State Your Terms and Guidelines
Many aspiring small business owners flock to e-commerce models for the relative ease and little overhead required to launch. However, without proper forethought and explicit communication of your legal terms, you can expose your store to a lot of risks. You’ll want to have several articles in your terms and conditions, including your standard definitions, shipping/delivery, refunds, data protection, privacy policy, intellectual property/trademarks, liability disclaimers, right to cancel terms, quality requirements, product specifications and product defect warranties, among other protections specific to your e-commerce concept.
Forecast Quality Control Problems
Quality control problems are one of the costliest mistakes you can make in your supply chain, however, the longer you wait to catch the issues, the more expensive it is to fix. That’s why quality control is an ongoing process, starting with supplier selection, then the specs of your orders, to any feedback after production and rounding out with a pre-shipment inspection. You can’t assume the manufacturer is impervious to error. Because if products get shipped to your customers that have quality issues, you risk losing your margins, dissatisfying customers and dealing with expensive reverse logistics costs.
Use a Supply Chain Management Tools
Whether you’re doing everything in-house or depending on three or four suppliers to fuel your efforts, you’ll need a supply chain management tool, or tools, to help you track performance. If you want one suite with various features, look for enterprise resource planning (ERP) software built for e-commerce, which often includes sales and demand forecasting, inventory management, distribution, reverse logistics and more. Otherwise, you can choose specific tools that accomplish particular tasks. Whatever you do, make sure your various suppliers have access to the parts of the chain that affect them to ensure your supply chain stays efficient and communicative with little to no effort.
Be Transparent with Vendors
Most e-commerce businesses depend on multiple partners to make their operations go. Like any business relationship, the likelihood of success often starts when two parties can enjoy an honest, positive relationship. On the e-commerce store side, that means keeping partners in the loop with realistic forecasts. Any vendor will want a higher order output, but if you can’t deliver right away, don’t pump your brand up alluding to large order volumes. Unless you want to burn bridges and scramble to find another partner in the midst of getting online orders, aim for transparency in your vendor communication and you’ll enjoy more long-term partners.
Deciding how to set your e-commerce store up for supply chain success is a continuous process that involves keeping pulses on various details. But you’ll take care of a lot of the heavy lifting from the onset by executing on the above.
