{"id":9291,"date":"2019-11-12T19:27:47","date_gmt":"2019-11-12T11:27:47","guid":{"rendered":"https:\/\/www.zhenhub.com\/?p=9291"},"modified":"2022-10-07T18:24:40","modified_gmt":"2022-10-07T10:24:40","slug":"5-ways-to-reduce-logistics-costs-2021","status":"publish","type":"post","link":"https:\/\/zhenhub.com\/blog\/5-ways-to-reduce-logistics-costs-2021\/","title":{"rendered":"5 Quick Ways to Reduce Logistics Costs in 2021"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Running a successful business requires having a well thought out logistics and supply chain strategy \u2014 from sourcing materials to fulfilling orders. But even with all the resources readily available to reduce logistics costs and increase revenue, getting products shipped and delivered at the right time and in their best condition is easier said than done.\u00a0\u00a0<\/span><\/p>\n<p><b>Common Logistics Cost<\/b><\/p>\n<p><span style=\"font-weight: 400;\">While poor logistics planning and decision-making are often blamed, it is important for retailers to understand the details that can blow up logistics expenditures:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Inventory Storage and Allocation<\/strong><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">As a common contributor to supply chain logistics costs, <\/span><a href=\"https:\/\/zhenhub.com\/inventory\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">inventory management<\/span><\/a><span style=\"font-weight: 400;\"> can be a huge pain for the organization\u2019s budget, especially if third-party services are outsourced for storage and allocation. The more inventory a seller has, the higher the charges. Without proper stock management and forecasting, the chances of shelling more money out than keeping them in significantly increases as well. <\/span><span style=\"font-weight: 400;\"><\/p>\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\"><strong>Warehouse Cost<\/strong><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Most businesses take advantage of bulk buying. While considered a good strategy, a fully-stocked inventory requires a much larger <\/span><a href=\"https:\/\/zhenhub.com\/warehousing-fulfillment\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">warehouse<\/span><\/a><span style=\"font-weight: 400;\"> storage space. Warehouse renting is not a cheap cost as it commonly includes signing a lease or purchasing land, both of which are long-term commitments and require huge cash deposits.<\/span><span style=\"font-weight: 400;\"><\/p>\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\"><strong>Transportation and Shipping<\/strong><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">It is no secret that transportation and <\/span><a href=\"https:\/\/zhenhub.com\/factors-that-affect-shipping-costs\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">shipping<\/span><\/a><span style=\"font-weight: 400;\"> take up a huge margin in eCommerce expenditure. From getting the inventory to the warehouse to <\/span><a href=\"https:\/\/zhenhub.com\/factors-successful-order-fulfillment-process\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">order fulfillment<\/span><\/a><span style=\"font-weight: 400;\"> and shipping, multiple touchpoints and shipping zones mean additional charges for retailers.<\/span><\/li>\n<\/ul>\n<h2><strong>How to Reduce Logistics Costs?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">There are many ways to <\/span><span style=\"font-weight: 400;\">reduce logistics costs<\/span><span style=\"font-weight: 400;\">. As with anything business-related, it requires a lot of careful planning and analysis of existing operations in order to understand how one can improve it. Here are five simple ways retailers can maximize profit and reduce logistic costs:\u00a0<\/span><\/p>\n<h3>Re-evaluate Business Operations<\/h3>\n<p><span style=\"font-weight: 400;\">Companies should do regular audits of their logistics costs regardless of any spikes or drops in revenue. Routine checks of operations such as logistics costs, processes, tools, and metrics help determine any changes that need to be implemented for better allocation of resources. Listed below are some aspects of business operations merchants should go over and re-evaluate:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Optimizing the warehouse layout for maximum inventory efficiency<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Improving staff productivity<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Meeting shipping deadlines<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Assessing product quality and efficiency<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Improving processes by opting for digital solutions and automation<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">By reconsidering these aspects, the efficiency of operations will improve and can ultimately <\/span><span style=\"font-weight: 400;\">reduce logistics costs<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3>Choose Product Sourcing Carefully<\/h3>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.ecomdash.com\/what-is-product-sourcing\/\" target=\"_blank\" rel=\"noopener noreferrer\">Product sourcing<\/a> is one of the most expensive costs for any eCommerce business. A lot of merchants opt for Southeast Asian or Chinese-made products to lessen manufacturing costs and to increase their profit. However, some fail to consider additional charges, such as taxes and shipment fees.\u00a0<\/span><\/p>\n<h3>Understand Carrier Options<\/h3>\n<p><span style=\"font-weight: 400;\">Like most firms, 3PLs also have to maximize their profit. This is why they need to update their pricing annually to make it more competitive. It may be a smart move to compare and consider alternatives to understand which option brings more value to the business. If changing fulfillment services providers will complicate the existing logistics process, merchants can always coordinate with the company\u2019s current partner and see what they could offer \u2014 sometimes, all it takes is to <\/span><span style=\"font-weight: 400;\">reduce logistics costs<\/span><span style=\"font-weight: 400;\"> to build a good relationship.<\/span><\/p>\n<h3>Consider bulk packaging<\/h3>\n<p><span style=\"font-weight: 400;\">Even if planned properly, packaging expenses can add up and become a lump in online business expenditures. If all the product information such as weight, sizing, and durability are available, a company can focus on large-scale packaging. Successful logistics managers usually shift to bulk packaging by buying a huge volume of packaging materials and lower costs by gaining volume discounts. Spread packaging expenses over large quantities of goods is also another way to go.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Though it may seem like there is a higher cost on the front end, retailers will gain more in the long-run through a lower average per-order cost.<\/span><\/p>\n<h3>Outsource order fulfillment to a 3PL<\/h3>\n<p><span style=\"font-weight: 400;\">Rather than handling everything in-house, outsourcing the fulfillment logistics to a 3PL provider can <\/span><span style=\"font-weight: 400;\">reduce logistics costs<\/span><span style=\"font-weight: 400;\"> efficiently. A reliable fulfillment center has multiple warehouses and can take over the responsibility of completing the order fulfillment process. Working with 3PLs can help businesses focus on more pressing matters like scaling and growth.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you need assistance with reducing logistics costs, you can reach out to our specialists \u2013 hello@zhenhub.com or submit an inquiry<\/span><a href=\"https:\/\/www.zhenhub.com\/our-story\/#contact-section\"> <span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Running a successful business requires having a well thought out logistics and supply chain strategy \u2014 from sourcing materials to fulfilling orders. But even with all the resources readily available to reduce logistics costs and increase revenue, getting products shipped and delivered at the right time and in their best &#8230; <a title=\"5 Quick Ways to Reduce Logistics Costs in 2021\" class=\"read-more\" href=\"https:\/\/zhenhub.com\/blog\/5-ways-to-reduce-logistics-costs-2021\/\" aria-label=\"Read more about 5 Quick Ways to Reduce Logistics Costs in 2021\">Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":10718,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","inline_featured_image":false,"_uag_custom_page_level_css":"","advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[11,4,13,12],"tags":[],"class_list":["post-9291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-ecommerce","category-general-logistics","category-startups"],"author_meta":{"display_name":"crystal","author_link":"https:\/\/zhenhub.com\/blog\/author\/crystal\/"},"featured_img":"https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-300x159.png","featured_image_src":"https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-600x400.png","featured_image_src_square":"https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-600x600.png","author_info":{"display_name":"crystal","author_link":"https:\/\/zhenhub.com\/blog\/author\/crystal\/"},"uagb_featured_image_src":{"full":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1.png",1446,765,false],"thumbnail":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-150x150.png",150,150,true],"medium":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-300x159.png",300,159,true],"medium_large":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-768x406.png",768,406,true],"large":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-1024x542.png",1024,542,true],"1536x1536":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1.png",1446,765,false],"2048x2048":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1.png",1446,765,false],"gb-block-post-grid-landscape":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-600x400.png",600,400,true],"gb-block-post-grid-square":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1-600x600.png",600,600,true],"crp_thumbnail":["https:\/\/zhenhub.com\/wp-content\/uploads\/2019\/11\/zhub_novb5_blogbanner01_r1-1.png",150,79,false]},"uagb_author_info":{"display_name":"crystal","author_link":"https:\/\/zhenhub.com\/blog\/author\/crystal\/"},"uagb_comment_info":0,"uagb_excerpt":"Running a successful business requires having a well thought out logistics and supply chain strategy \u2014 from sourcing materials to fulfilling orders. But even with all the resources readily available to reduce logistics costs and increase revenue, getting products shipped and delivered at the right time and in their best ... Read more","coauthors":[],"tax_additional":{"categories":{"linked":["<a href=\"https:\/\/zhenhub.com\/category\/business\/\" class=\"advgb-post-tax-term\">Business<\/a>","<a href=\"https:\/\/zhenhub.com\/category\/ecommerce\/\" class=\"advgb-post-tax-term\">eCommerce<\/a>","<a href=\"https:\/\/zhenhub.com\/category\/general-logistics\/\" class=\"advgb-post-tax-term\">General Logistics<\/a>","<a href=\"https:\/\/zhenhub.com\/category\/startups\/\" class=\"advgb-post-tax-term\">Startups<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">Business<\/span>","<span class=\"advgb-post-tax-term\">eCommerce<\/span>","<span class=\"advgb-post-tax-term\">General Logistics<\/span>","<span class=\"advgb-post-tax-term\">Startups<\/span>"]}},"comment_count":"0","relative_dates":{"created":"Posted 6 years ago","modified":"Updated 3 years ago"},"absolute_dates":{"created":"Posted on November 12, 2019","modified":"Updated on October 7, 2022"},"absolute_dates_time":{"created":"Posted on November 12, 2019 7:27 pm","modified":"Updated on October 7, 2022 6:24 pm"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/posts\/9291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/comments?post=9291"}],"version-history":[{"count":1,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/posts\/9291\/revisions"}],"predecessor-version":[{"id":13512,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/posts\/9291\/revisions\/13512"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/media\/10718"}],"wp:attachment":[{"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/media?parent=9291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/categories?post=9291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zhenhub.com\/wp-json\/wp\/v2\/tags?post=9291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}