In 2020, the Bureau of Labor Statistics reported a surge in the formation of new small businesses, marking a record-breaking trend. Among these enterprises were numerous small brands venturing into the online sphere, initiating e-commerce operations from the comfort of their homes, basements, and garages – a narrative familiar to Erleia, among others.

Simultaneously, the rise of e-commerce and social commerce has ushered in an era of near-instant gratification for consumers. Expectations have shifted dramatically, driven by the prevalence of lightning-fast, free shipping. However, the logistical complexities, costs, and realities that underpin online shopping vary significantly for small brands.

The Logistics of Online Shopping:

When a consumer places an order online, the process of fulfillment begins. For small brands like Erleia, this typically involves in-house fulfillment at a small warehouse or office, or even at the business owner's home. The popular hashtag #packanorderwithme underscores the prevalence of small-scale fulfillment operations, with countless entrepreneurs shipping orders directly from their homes.

Order processing times for small brands vary widely, ranging from hours for readily available items to weeks for pre-sale or customized products. Once processed and packed, orders are dispatched to a nearby post office or picked up by a shipping carrier, with delivery times contingent upon the carrier's operations. For Erleia, this translates to a processing time of 1-3 business days and shipping time of 3-4 days within the contiguous 48 states.

Alternatively, slightly larger or well-resourced brands may opt for third-party logistics (3PL) providers to handle fulfillment. These providers manage inventory and process orders from their warehouses, often located in major shipping hubs, thereby reducing transit times and enhancing delivery speed by 1-2 days. Some brands leverage 3PLs' multiple locations to ensure timely delivery of perishable goods.

In contrast, large retailers operate vast industrial warehouses equipped with teams of fulfillment associates who process orders around the clock. Automation further expedites this process, enabling faster and more efficient order processing. Many major retailers employ a hub-and-spoke system to centralize inventory and facilitate rapid distribution nationwide, enabling overnight or one-day delivery.

Free Shipping Isn't Free: Understanding the Costs for Small Brands:

Shipping entails more than just postage; it encompasses packaging materials, handling costs, and additional expenses. Let's break down the costs for shipping an Erleia lotion bar from Denver to a US-based customer:

• Postage: $4.20
• Packaging (mailer or shipping box) and Tape: $0.75
• Marketing Materials: $0.25
• Handling: $2
• Total Cost: $7.20

These costs vary across brands, with factors like product size and weight significantly influencing shipping expenses. Opting for sustainable packaging materials may further increase costs for small brands. Understanding these expenses underscores the effort and resources invested in shipping products, particularly for small businesses operating without economies of scale.

While many small brands offer free shipping or free shipping with a minimum order, these costs are ultimately borne by the businesses themselves and are factored into their business models.

Navigating the Realities:

What can consumers and supporters of small brands do to navigate these challenges? Firstly, acknowledge the efforts involved in delivering products to your doorstep. Understand that while small brands may not offer free expedited shipping, they remain committed to providing exceptional customer experiences.

Consider opting for paid shipping options to support small businesses in covering their shipping costs. Recognize that logistical challenges are inherent to the journey of small brands, and occasional delays are part of the process.

By appreciating the logistical hurdles faced by small brands and continuing to support them, we contribute to a vibrant and diverse e-commerce landscape, fostering innovation and entrepreneurship in the digital sphere.

 

Tags

E-Commerce Erleia Small business Third Party Logistics (3PL)

• Share on:
• WhatsApp
• Deel
• X
• Pin it
• Messenger
• Email

---