Introduction
In today’s competitive e-commerce landscape, understanding and optimising logistics costs is crucial for success. Many retailers focus on marketing, product development, and customer service, but often overlook the significant impact of logistics on their bottom line. Efficient logistics management can lead to substantial cost savings and improved profitability. This report is designed to help you gain a deep understanding of your logistics costs and how they fit into your overall unit economics. This report will guide you through key logistics metrics, explain how to measure your business performance, and provide actionable insights to enhance your operations.
Summary of our 3-Step Process
Our 3-step process is designed to provide you with a comprehensive understanding of your logistics costs and how they impact your business profitability.
STEP 1: gathering data
We start by collecting total figures for a full month, including orders, items, packages, weight, and associated logistics costs. This comprehensive data collection ensures an accurate baseline for analysis.
STEP 2: identifying ratios
Next, we use the collected totals to calculate monthly averages. This step is crucial because it allows us to identify key ratios, providing insights into your logistics efficiency and cost distribution. It’s important to understand these averages relative to order volumes to avoid misleading conclusions based on fluctuating monthly costs.
STEP 3: Tying cost ratios to revenue
Finally, we assess these cost ratios against your business revenue. This step helps you understand how logistics costs impact your overall profitability. By tying logistics costs to revenue, you can determine the cost-effectiveness of your logistics operations and make informed decisions to optimise your supply chain.
By following these steps, you gain actionable insights that enable you to streamline logistics, reduce costs, and enhance your business profitability.
