Since the Internet boom in the late nineties, the B2C logistics & shipping industry has skyrocketed. As consumers have come to expect quick, door-to-door (and many times free) shipping of almost anything they can imagine, many companies have become incredibly profitable and popular while driving organic revenue growth.
Of course, the biggest of all these companies is the online retailer Amazon. But why is Amazon, a company barely known in the public eye a decade ago, now not only the world’s largest online retailer, but considered one of the most efficient and effective supply chain management companies in the world?
The answer lies in Amazon’s customer experience, which is ultimately driven by the company’s supply chain. The company regularly invests large amounts of money in distribution centers across the world, with the goal of providing faster delivery service for its customers. Additionally, Amazon’s Supplier Code of Standards and Responsibilities ensures that all supply partners adhere to a high level of business conduct.
Lessons from Amazon’s B2C success can be leveraged in the B2B logistics & shipping industry, which has struggled to identify where analytics and data can be leveraged to resolve long-term issues surrounding profitable revenue growth. The following three takeaways from Amazon’s proven approach can help B2B shipping & logistics companies make big changes and streamline their business models.
1) Create a blueprint. Amazon’s supply chain success can be attributed to a variety of actions, but it all starts with planning. The entire process from A to Z for each and every item ordered is carefully calculated and optimized for cost-effectiveness. A supply chain plan can always evolve as customers and marketplaces evolve, but without a blueprint, your company might be as well be dead in the proverbial supply chain water.
2) Communication is key. Communication is the foundation of a healthy relationship between a company and its suppliers. Amazon is renowned for their communication with both companies and customers, which ensures that the partnerships are as fluid and streamlined as possible. The success of any supply chain is highly dependent on communication, even more so for high-volume products and services.
3) Measure, test and learn. Amazon, quite literally, has its analytics down to a science, and it continues to refine and perfect that science. Its audit process continues to hold distributors and supply chain partners to measurable standards. In order to understand how your supply chain is performing and what improvements need to be made, it’s important for manufacturers and shippers to be able to measure everything. Obviously, this won’t happen overnight. It didn’t for Amazon either. However, with each fresh metric and the collection of necessary data, B2B companies move one step closer.
If B2B logistics & shipping companies apply these lessons to their own business models, they will see a surge in organic revenue growth, while also improving efficiency and effectiveness (with the linked cost reductions) across the board. Amazon may be the biggest B2C logistics / shipping company, but there’s plenty of room for B2B companies to improve and own their side of the industry.