20.03.2013 in Home > Article by Namit Gupta

Challenges eRetailers Must Face in 2013

Distribution centers (DCs) are the main avenue for eCommerce businesses to sell and ship their products. Challenges are arriving in 2013 that could change how you select a distribution center for your eCommerce business. Consumers expect same-day and next-day delivery options from all online businesses. Smaller companies maintaining product in their garage, a storage unit, or in a local shop are unable to comply with the demands of consumers. Free shipping is another demand that must be met given competition increases.

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Choosing a Shipping Partner

FedEx, UPS, and USPS struggle to cover costs of fuel, increasing their shipping costs on the average consumer. Distribution centers sending out hundreds of boxes a day are able to charge less per package. The USPS is also a topic of Congress again regarding Saturday mail delivery. Packages are still going to be delivered on Saturdays and Post Offices currently open on Saturdays will allow entry for mailing letters and packages. Post Office Box access will also remain. Home delivery of standard mail is the only aspect affected by these changes. Confusion has already led to concern by small businesses regarding the change in delivery, spurring research on distribution centers.

Search for shipping partners offering cost-effective shipping for your small eCommerce business. Determine costs versus gain for incorporation to lower shipping costs. Incorporating your business could directly affect your shipping costs with certain distribution centers. These companies work with small companies; however, trust is also a concern since many eCommerce companies fold within two years. Incorporating indicates professionalism and a desire to remain open. Not all distribution centers charge more or less if you incorporate; however, certain companies are known to turn away unincorporated businesses.

Consumer Interaction and DC’s

Free shipping for $25 is a common advertisement by large corporations during the holiday season. At other times of the year $50, $75, or $100 may be the target spend amount for free shipping. Advertisements like this gain notice by consumers, but may not be feasible for a smaller eCommerce business. To offer discounted shipping, consider changing distribution centers. Comparison shopping is possible with distribution centers too. Determine which company is more likely to give a better deal for standard shipping, next-day, and same-day shipping. If necessary raise your product prices to accommodate the shipping cost differential. A dollar more for the product versus fewer dollars spent on shipping attracts consumers.

Increase of ECommerce Business

Approximately 10% more in online sales happen each year, driving more people to start eCommerce websites. Individuals graduating and unable to find employment turn towards eCommerce sales in eBooks, music, and digital downloads. Increased competition affects your ability to make the necessary sales to continue, thus it is imperative to survive the new changes in distribution centers and shipping options. In addition to locating a better distribution center, you need a niche eCommerce business. Bringing in foreign distribution centers, selling overseas movies, music, and eBooks is another way to meet the challenges waiting you in 2013. Foreign companies want to branch out too, providing a symbiotic relationship for you.