A Sustainable Business Model for E-Commerce Site Owners
Sustainable, environmentally friendly practices are way forward for businesses. Companies that center their offerings around sustainability register credibility and attract more customers to their store.
These companies don’t work on hyperbole. According to Nielsen Global, a majority of customers are attracted to stores that offer sustainable and environment-friendly products and services.
From a logistical perspective, reducing the carbon footprint (selecting close-range suppliers as opposed to those who operate far from your warehouse) constitute environment-friendly practices that are also beneficial to the bottom line of companies.
In addition to this, companies can also utilize data to make their offerings stand out. More specifically, logistical data that helps you optimize the shipping and delivery process.
There are plenty of sustainable eCommerce practices that companies can opt for. In this article, we’ll be discussing the major steps companies can take to ensure that their products/services are environmentally friendly.
Making Your Supply Chain Sustainable
You want to deliver your products to the end consumer. For any eCommerce business, having a supply chain is obviously vital in ensuring products are sourced and delivered to customers in time. Let’s look at some of the ways in which companies can make their logistical operations more environmentally friendly.
The first one is obviously the reduction of your supply chain’s carbon footprint. You can do so by reducing the distance travelled between your company warehouse and your suppliers. By getting closer, not only are you and your suppliers utilizing your fuel efficiently, but you are also able to source products from your suppliers.
While there are companies who look for overseas suppliers since their products are a lot cheaper to work with, they also face the burdens of carbon emissions and import tariffs. Depending on diplomatic trade relations, these can vary from country to country and can prove to be equal or close to the costs you incur with a domestic supplier.
Apart from sustainability factors, local suppliers can also help you reduce storage space. Since you can now source products quickly, you also reduce the need for a bigger warehouse. Local suppliers, in many cases, can prove beneficial to a company’s profits and at the same time, promote environmental friendliness.
Optimization of Networks and Order Management
Another important part of a company’s sustainability strategy is efficiency in order management practices. Again, reducing carbon footprint is the end-goal.
First off, we need to develop an understanding of the issues pertaining to sustainability in online shopping. Whenever an eCommerce buyer purchases several products, the company has to ship all orders to their location. Shipping them all at once in a single packaging can efficiently reduce carbon emissions and also require less packaging. This process is known as order consolidation.
Companies offer shipping discounts if the customer consolidates their order. Additionally, companies can also track and manage their order routes, optimizing to ensure that the best possible shipping routes are taken to deliver the product to the customer.
With a high performance business solution for your eCommerce store, combined with an Enterprise Resource Planning (ERP) integration, companies can track, manage, and optimize their orders more efficiently.
In the next section, we’ll be taking a deeper look at how companies can analyze their data for sustainability.
Data Analysis for Order Tracking
Tracking, managing, and making informed decisions from data can prove really beneficial to the bottom line of your company. Through that, you can also understand and identify hidden problems within your operations and fix them for better performance.
With the right data, the sky’s the limit with what you can achieve.
The hidden metrics can be errors related to shipping or lost items that were reported but never followed-up on. Identifying and acting upon such data points leads not only to a more profitable bottom line but also helps improve customer relationships.
We’ve touched on the subject of sustainable packaging above. In this section, we’ll elaborate on it to give you the full picture of how efficiencies in packaging can lead to a more sustainable business.
The packaging is crucial in eCommerce. Products that are delivered to customers need to be packaged in one form or another. Due to its universality, it’s the prime contender for sustainability strategies.
In the past, and still today, companies sourced non-biodegradable plastics to use for their packaging. While they are cheap and available, they’re a danger to the environment because they do not decay.
When it comes to degradable options, cardboard and paper packaging are the most beneficial. In fact, cardboard can also be reused, which means customers can return items using the same packaging. Another good option that’s recently been gaining traction is bioplastics.
Cardboard, among other recyclable materials, is also used in the organization of products within a package. Die-cut inserts, as they are called, divide the package into distinct areas fit for the product. This also reduces the need for adding plastics and peanuts to secure fragile items. The primary benefit of using these is that they’re cheap, and you can customize them based on the product.
Yes, we agree that sourcing degradable plastics is a costly venture but in terms of creating a brand image for your business, such effort pays off in dividends. Your buyers will be more likely to purchase more from you if you’re taking such an initiative. Moreover, they are even more likely to refer your products to their acquaintances.
For a business, sustainability should be looked upon as a marketing technique. With climate change and global warming on the rise, it’s imperative that you take the steps towards \your business operations for sustainability.
To recap, the following strategies can be applied to make your business environment-friendly:
- Optimizing your supply chain by lowering carbon emissions.
- Consolidate orders by sending them in a single packaging.
- Utilize data to track and manage your supply chain for maximum efficiency and minimal carbon footprints.
- Using degradable plastics for packaging.
You can tailor these strategies depending on your business model. Either way, it’s important that you start working on sustainability today. Not only does it benefit you in terms of the bottom-line, but it also enables you to target more customers and improve your brand image.