Logistics outsourcing reduces e-commerce costs
What exactly does logistics outsourcing mean? Behind selling goods online lies a wide range of activities that together form the overall shopping experience. From proper packaging and customer service to distribution, everything must work flawlessly. Otherwise, the customer will have an unpleasant experience and is unlikely to return to the retailer’s website. Such a combination places high demands on sellers, which is why they are looking for ways to streamline their entire operational process.
In this context, logistics outsourcing means transferring part of these activities to an external partner. The service provider usually takes over the comprehensive management of the physical flow of goods. Typically, this includes the following activities:
- warehousing of goods,
- goods receiving and stock intake,
- order picking and packing (pick & pack),
- dispatch and transportation,
- handling returns and complaints,
- logistics IT and reporting.
Of course, depending on the e-shop operator’s needs, the external partner may provide only part of these services. However, the term logistics outsourcing traditionally refers to the entire operation. It can therefore be described as “from pallet to customer.”
Competition from Asian e-shops
For domestic sellers, the strongest competition comes from low-cost online stores from Asia, especially Chinese ones. These platforms benefit from mass production and extremely low manufacturing costs. Czech e-shops cannot compete on these terms, as their expenses are rising faster than their margins.
European road transport rates, in particular, remain too high after the COVID period, which is why logistics outsourcing offers an opportunity to reduce costs in this area. In addition to transport, other cost items are also increasing, including purchase prices of goods and advertising on Google and social media. In such an uneven competitive environment, it is no longer possible to succeed without seeking alternative approaches.
Logistics outsourcing as part of a strategy
Delegating the comprehensive management of the physical flow of goods to an external partner brings several advantages to domestic e-shops. Above all, it allows them to work with capacity more flexibly. They do not need to make long-term investments in warehouses, technologies, or employee recruitment.
Logistics outsourcing is therefore particularly valuable during seasonal peaks, when order volumes increase sharply and in-house facilities reach their limits. Another important factor is the speed of adaptation to market changes. Service providers typically have automation, advanced information systems, and connections to multiple carriers. All these aspects give individual e-shops room to improve the customer experience without internal development.
Domestic online stores can thus focus on their product range, customer relationships, and brand building. Operational complexity remains outside their day-to-day agenda. In the long term, logistics outsourcing also helps reduce operational risks. Costs shift from fixed to variable and are directly linked to the performance of the online store.
This financial predictability is becoming one of the main reasons why domestic e-shops are increasingly choosing this cooperation model in an uncertain economic environment.
