Ecommerce Success Is Killing The Economics Of Cheap Home Delivery

In years past, most parcel packages were shipped to warehouses and facilities in bulk, allowing sellers and parcel companies to achieve economies of scale. The greater volume delivered to the same or fewer destinations, the more cost savings could be achieved per package.

But today, growth in e-commerce continues to accelerate direct-to-household purchase volumes.  Shipping to more individual locations has reduced distribution scale for sellers, increasing per-unit delivery costs.  

Reducing these costs can go a long way towards sustaining the new status quo of faster shipping across more widely distributed destinations.  Achieving this without passing on cost increases to customers through price hikes will likely require a sharper focus on leveraging data to optimize delivery networks.  As use of algorithms and forecast accuracy increase, it will become easier to plan for weekly and seasonal volatility, choose optimal routes, appropriately utilize facilities and assets, and shift personnel around as needed to bring down the cost of last-mile delivery.  

Read the article here.

Share on facebook
Share on google
Share on twitter
Share on linkedin

Recent Blog Posts

How to Make Free Shipping Profitable: The Ultimate Guide

Free and fast shipping is the name of the game now. It is a must-have for any seller wanting to get ahead of the pack not only on Amazon but also on other platforms. While shipping may be free for the customer, you’re still paying for it and it’s creeping into your margins. Here at Cahoot, we have created THE ultimate guide to profitable free shipping. You’ll learn every known and proven way you can offer free shipping profitably.

Is Amazon Responsible for the Sales by Third-Party Sellers?

Technology platforms govern consumer experience in a huge way. Users simply come to the platform, search for what they want, and start using it. Behind this consumer behavior, is the implicit trust in the platform that its users will act in the best interest of other customers. Apple’s App Store, Amazon’s Marketplace and Mastercard’s payment services are some examples.

The Growing Threat from Sellers based in China and How to Combat it

With the economic liberalization under Deng Xiaoping, China unleashed its manufacturing prowess over the world. For years the sourcing for goods sold in the US has been dominated by suppliers and manufacturers from China. The supply chain generally involves a distributor from China, US based wholesaler and finally a retailer in the US.