What to Take Into Consideration in E-Commerce Logistics for Vape Shops [Getting a Grip on Shipping and Logistics Processes]

The difficulties in the logistics of an online store are rapidly growing.

As more and more B2C businesses plan for an e-commerce approach to business, the expectations of customers rise and the costs of shipping services do so as well. Shipping expectations and high shipping costs being two of the main triggers for cart abandonment.

A common eCommerce operator spends between 20-40% of their turnover on logistics operations. So you can understand the importance of securing an e-commerce logistics strategy for vape shops that minimizes those costs.

Table Of Contents

1. Alternatives in E-Commerce Logistics for Vape Shops
2. Drop-Shipping
3. E-fulfilment
4. In-house Logistics Team
5. Conclusion

Alternatives in E-Commerce Logistics for Vape Shops

You have many e-commerce logistics strategy options to adopt for your online vape shop. Although we’ve dialed it down to three main alternatives, you can often use some elements of one and combine them with elements of another. 

Drop-Shipping

Drop-shipping is a shipping methodology that allows the retailer to process the customer’s order, share the order with the manufacturer, and have the manufacturer ship the order to the customer directly.

Drop-shipping has become increasingly popular because it allows the retailer to avoid inventory issues, costs, and all the additional processes that keeping your inventory comes with.

Here’s how it works:

The retailer enters into a contract with the manufacturer that specifies the details of how the relationship will work. What usually happens is the retailer receives an order placed on their website, which is the vehicle to generate sales. In other words, the access your online vape shop has to the customers is the only reason why the manufacturer would be interested in this deal.

Once the order is processed by the online vape shop it is sent to the manufacturer/supplier who subsequently ships the order to the customer’s address. This relationship works as long as the vape shop is generating sales.

The main advantage of using a drop-shipping strategy is that you don’t have to employ processes for inventory management and shipping. Which are the main source of high logistics costs.

A drop-shipping approach is also easily scalable because the responsibility of planning ahead on manufacturing and inventory falls on the supplier.

However:

Drop-shipping also comes with a few disadvantages.

As an online retailer, you want to ensure that every step of the process is pleasant to your customer. With drop-shipping your customer experience is almost entirely left up to the manufacturer. Shipping speed and overall experience with shipping may be affected and you have no control over it.

Other major disadvantages are the smaller profit margins and the fact that you’ll depend greatly on your supplier. So, if the supplier wants to opt out of the business, it may be a catastrophe for yours.

E-fulfilment

E-fulfilment is simply the name given to all the logistics processes involved from order placement to order shipment. This includes processing the order, managing inventory, processing returns, and everything that it takes to act on these.

But:

When talking about an e-fulfilment strategy, companies are usually referring to outsourcing all of these processes.

There are entire companies dedicated to providing the service of taking care of all the logistics processes for you.

However:

This service is not usually cheap and most of the time can only be afforded by bigger companies. On the other hand, smaller e-commerce vape shops don’t require an e-fulfilment supplier as the sheer volume of orders is not usually big enough to justify the investment.

Nevertheless:

It’s a strategy you want to look into as it does come with a few advantages to its name.

Primarily:

You can benefit from a larger profit margin because you still own your inventory, contrary to the drop-shipping scheme. By using an e-fulfilment supplier you’ll also retain control over your inventory and sales process. Two key elements that have a direct influence on your vape shop’s growth.

But there are also three very important disadvantages:

E-fulfilment is expensive and is only recommended for vape shops with substantial sales volumes, you still have to purchase your own inventory, and you won’t have much influence over the logistics processes.

In-house Logistics Team

Operating logistics in e-commerce makes sense if you find that other options like third-party logistics services for online stores are taking away too much visibility from your own business. Which is a really common thing that does happen.

But that’s not the only reason why you might feel tempted to operate your own logistics team.

Having in-house logistics in e-commerce means that the costs taken by third-party operators are no longer there. Resulting in higher profit margins for you and your online vape shop.

However:

Doing so will mean that you have to sign into a contract with an e-commerce shipping provider (carrier).

Which unfortunately is getting more and more difficult to do in the vaping industry. The mail ban and other impending regulations are cutting off smaller vape shops by the heels and making it more difficult for third-party carriers like FedEx and USPS to handle your product.

So, operating your own logistics in e-commerce if you’re in the vaping industry is probably not as smooth sailing as any of the other options just based on that detail.

Another clear disadvantage that goes beyond the industry you’re in is that you’ll be stuck with all the processes involved in logistics: processing orders and returns, shipping, etc. That’s all on you and your business from now on.

Nevertheless:

There are tools that could help you make the process easier.

Using an automated platform is probably the best option. It gives you the option of easily shifting between carriers and scheduling shipments in an organized way.

But then again, this would also take a chunk out of your profit margin so the sales volumes need to be there to justify the investment in an automated shipping platform.

Conclusion

There are three main alternatives in e-commerce logistics for vape shops, but you can build your custom strategy by combining elements of all three. Drop shipping, e-fulfilment, and employing your own in-house logistics team are the base alternatives you can choose from, but logistics management in e-commerce can take many different forms. It’s up to you to decide what strategy fits your online vape shop the best.