On-demand logistics is much more than just an industry buzzword. It refers to a modern logistics strategy that enables online brands to expand customer reach geographically and fulfill orders as soon as they are placed.

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In many cases, on-demand logistics can support multichannel retailing, which streamlines and automates the fulfillment process for orders that come in through multiple sales channels.

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On-demand logistics require a robust distribution network, flexible fulfillment solutions, and the latest technology and automation tools that enable speed and accuracy. 

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How on-demand logistics is changing the delivery experience

Customers expect fast, consistent, and reliable shipping. So it’s no wonder that on-demand logistics is the key to driving more sales and keeping customers coming back for more.

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Marketplaces like Amazon and Walmart have set the delivery standard around 2-day shipping. 

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But fast delivery can be costly. Expedited shipping is always an option, and some customers are willing to pay the extra for shipping that fast, but there are ways to leverage standard shipping options and still provide fast delivery.

 

Inventory distribution is a common on-demand logistics model. Ecommerce businesses that first start out will often pack and ship items themselves (or might also rent a single warehouse to help with storage needs). But as the business grows, on-demand logistics cannot be achieved by fulfilling orders from a single location. 

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That’s why fast-growing online brands partner with logistics companies, such as AFL Logistics, that offer multiple fulfillment locations to store inventory, have orders fulfilled, and ship packages through the most efficient route.

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Since on-demand logistics companies partner with thousands of merchants, they are able to provide discounted shipping rates from major and regional parcel carriers and let brands utilize a small amount of space in their fulfillment center(s).

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This is just one example of how brands can enable an on-demand logistics strategy without the the need to invest in their own infrastructure and technology. 

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Here is an overview of how on-demand logistics can benefit your ecommerce business. 

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Faster shipping times

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Amazon Prime might have popularized it first, but now nearly every online shopper expects to see a 2-day delivery option on all ecommerce stores.

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In fact, 36% of online customers will abandon cart if they’re not satisfied with the expected shipping date.

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Offering fast shipping options, such as 2-day shipping, can be quite tricky, considering you need to ensure that the shipping methods you offer don’t cut into your profit margins. 

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But by distributing inventory based on where there is demand (and once your volume justifies it, where the extra storage and initial transportation costs can be offset by the average costs savings in shipping), you can offer more or all of your customers affordable 2-day shipping via ground.

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This is because you can ship from the location closest to each customer to reduce the average shipping zone. 

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Lower fulfillment costs

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Order fulfillment costs include all the charges and expenses that relate to warehouse receiving; storing and managing inventory; processing orders; and picking, packing and shipping orders. 

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In an extremely competitive retail environment, on-demand logistics might seem nearly impossible to achieve when most of your time and logistics budget is being spent on: 

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• Warehousing and storage fees

• Hiring and training staff

• Implementing fulfillment software

• Managing inventory

• Purchasing and stocking up on packing materials

• Kitting and assembling items

• Shipping orders

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To lower fulfillment costs, you have to consider both the financial investment and the time spent on logistics.

 

Partnering with a third-party logistics (3PL) company is a great solution. A 3PL partner can help your business save on costs and time, freeing up resources to focus instead on product development, marketing, and business growth. With a 3PL, you can meet customer expectations while keeping fulfillment costs low. 

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By distributing the right quantities of inventory to multiple fulfillment centers within a 3PLs network, you can sync your sales channels with your 3PL’s technology, so all orders placed are routed to the nearest fulfillment center location. This allows you to optimize your shipping strategy, reduce shipping costs, and speed up last-mile delivery. 

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Meet consumer demand

On-demand logistics uses technology that allows merchants to expand their operations and access aggregated logistics data in real time.

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This allows merchants to gains insights to make better decisions around product allocation and when it’s time to replenish stock (and at what locations) to meet demand.

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For instance, AFL Logistics is a 3PL that operates multiple fulfillment locations across the globe. Every location is powered by the same, proprietary software, which offers visibility into inventory and orders, as well as fulfillment and shipping performance.

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With access to advanced data and analytics, you can make better decisions on how to meet consumer demand and expectations.

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You can also automatically provide customers with order tracking, and if they ever have an issue or question about an order, you can easily view orders across AFL Logistics entire fulfillment network in real time to provide an update.

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Inventory forecasting is another important aspect of on-demand logistics. Without inventory, you can’t ship orders. By using historical data to forecast demand, you can ensure you have enough inventory available and stored at all times, set automatic reorder points, and even calculate how much safety stock to have on hand.

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On-demand warehousing

 

With more online brands growing worldwide, there is a tremendous need for more warehousing and storage space.

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On-demand warehouses are gaining popularity due to the ability to access space  and only pay for the space you need to store your ecommerce inventory. 

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Some on-demand warehousing solutions rent our other 3PLs’ open space, but other on-demand warehousing companies simply use garages and other buildings that aren’t designed for fulfillment.

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It is a good hack to beat issues such as the lack of affordable warehouse spaces closer to where the customers are located, or if you need extra space during the holiday season.

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But the goal is to meet customer expectations, which means your fulfillment strategy must be reliable and accurate, and you can’t rely on geographic location alone. 

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That said, on-demand warehousing is mostly a short-term solution that cannot guarantee a consistent experience, leading to more fulfillment errors. When the warehouse is not run by your own on-the-ground staff, it becomes difficult to resolve issues quickly, which leads to poor customer support.

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On-demand logistics for flexible fulfillment

Since the ecommerce landscape is always changing, it is important to partner with a 3PL that provides not only on-demand logistics solutions but also room for growth. 

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The right 3PL should always being implementing improvements with the latest technology and supply chain best practices, as well as continuously expand their distribution network.

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Here are some of the reasons why partnering with the right 3PL can provide flexibility in your on-demand logistics operations. 

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Manage changes in demand

A tech-enabled 3PL can provide visibility into your supply chain, so you can track shifts in customer demand and plan your logistics accordingly. 

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For instance, AFL Logistics not only fulfills orders but makes it easy to connect your store with AFL's fulfillment software, so you can get insights to questions such as:

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• What were my historical stock levels at any point in time in any location?

• By when do I need to reorder inventory for each product?

• How often is each product sold across channels?

• If I run a flash sale on my site, how will this affect my available inventory levels?

• How does product demand compare to previous periods?

• How are my sales affected by different seasons and months?

• What are my best-selling items?

• Which items are not generating sales and incurring high storage fees?

By having insights into demand, you can use historical data to predict the future, allocate inventory to the right locations, and reorder just enough inventory to optimize storage.

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Better inventory management

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Many 3PLs like AFL Logistics make it easy to connect your store (and other sales channels) with their technology. Once your store is connected, you can access built-in inventory management software, so you can track inventory in real time.

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AFL Logistics allows you to distribute inventory and manage it all from one dashboard, while you view inventory levels in real-time, set automatic reorder notifications, determine how much buffer inventory you should have on hand, see what your best-selling items are, and much more.

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How AFL’s on-demand logistics services meet customer expectations

As a trusted 3PL provider, AFL Logistics offers scalability, reliability, and consistency in our on-demand logistics solution. Here is how AFL Logistics can help you meet customer expectations.

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