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How Innovations in Logistics Can Help Grow Your E-Commerce Marketplace

Amid established e-commerce models, new startups are empowering businesses and customers with new ways to transact.

In this day and age of on-demand services for everything, it’s important for businesses to be able to deliver top-notch services to customers, all with being focused on their core competencies. This means taking advantage of platforms, solutions and trends that can empower one’s business to target and reach audiences for best profitability with the least amount of effort.

Audiences are increasingly becoming ready-to-buy. According to emarketer, e-commerce accounted for 8.7 percent of all global retail spending in 2016, with a total value of $1.915 trillion. A majority of shoppers, at 71 percent, prefer buying online because they perceive to get a better deal than when buying from brick-and-mortar retail establishments.

However, e-commerce comes with challenges. First, even with the upsurge in e-commerce players and customers making transactions worldwide, it is not always a rosy picture. For one, 28 percent of all e-commerce deliveries are considered last-mile transactions, which means fulfillment might be an issue if your products could not reach customers in a cost-effective and timely manner.

Second, not all products may be available online, and customers might be on the lookout for certain niche products that could only be delivered by speciality retailers.

Here is where platform thinking prevails. Marketplace platforms exist to either replace or augment traditional centralized e-commerce services, in that these enable both B2C and C2C transactions to happen. Another main benefit is scalability and the possibility of long-tail marketing. The main concern here would be logistics, although this is a challenge that can be easily addressed with upstart solutions.

Address niche products without the need for inventory

As a marketing and selling model, marketplaces give an opportunity for buyers and sellers to connect, thus providing access to products that may not otherwise be available to them through brick-and-mortar establishments. This also enables sellers to reach audiences previously out of touch, given wide distances and other such constraints.

For marketplace owners, this is an opportunity to sell products even while you only hold minimal or zero inventory. Of course, one issue with this is that some products might be difficult or expensive to source, especially considering the logistics of shipping across borders and continents.

A startup called Oberlo seeks to address this.

By positioning itself as a marketplace and a tool that enables entrepreneurs and store owners to find and sell products that may be difficult to source locally — the solution helps e-commerce sellers automate their pricing, customize product listings, track sales, and choose suppliers — all without having to deal with then headaches of the actual logistics.

Tomas Slimas, co-founder and chief marketing officer of the Lithuania-based startup, says this promises an opportunity for platform owners as “an e-commerce fulfilment model where retailers don’t have to buy products in advance. Instead, you just add a product to your store and when you sell it, you buy it from your supplier and have it shipped directly to your customer.” This is also called dropshipping (not having to hold your own stock, but rather send the order directly to a wholesale provider or another retailer or even the manufacturer).

Apart from providing the means to access niche retailers, the platform also lets e-commerce sellers to incorporate items from major retailers into their own marketplace or platform. Logistics are handled by Oberlo, so it’s just a matter of marketing and pricing for its users.

Augment the big-name retailers and reach out to last-mile customers

One other e-commerce challenge is that established marketplace platforms may not always find it scalable to deliver products and services to last-mile customers. For example, customers in rural towns in emerging economies might find it expensive and difficult to have products shipped to their destinations.

A startup called ShopX addresses this need by leveraging a network of small-scale brick-and-mortar stores to act as access points for such consumers. Operating across 50,000 small retailers in India, the app enables retail to provide various digital services like prepaid mobile recharge, bus and flight booking, utility bill payments, and even p2p lending services, in addition to physical products that customers can pick up from their locations.

With its platform, “small retailers can become a point of contact, not just for purchase but also for delivery of products,” says Amit Sharma, co-founder and CEO of the India-based startup. “We leverage our last-mile delivery network to strengthen the supply chain; integrating our local partners to into the value chain which has reduced the delivery time to two to three days instead of four to five days.”

In conclusion

While e-commerce is a decades-old business model, digital startups are still finding ways to innovate, in order to provide more access to users and more business opportunities to marketplace and platform owners. Across all these, the challenge lies in logistics. If it is a matter of actually bringing your products to customers, no matter where they are, finding the right solution might make or break your business, especially for distant or last-mile consumers.

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