Supply chain issues dominated the headlines throughout 2021, a combination of the pandemic, labour shortages and port congestion caused havoc for retailers and brands across the world.
Despite these issues the post-pandemic recovery is shaping up to be the era of the ecommerce entrepreneur. Companies House data shows a 162% rise in the number of new ‘online consumer goods’ firms launched in 2020, and there were more online and mail-order retail businesses created than any other sector – 35,608 in 2020 compared to 13,615 in 2019. It also looks like 2021 was on track to become a record enterprise year with more than 80 new firms launched every hour from Jan-June.
The e-commerce surge shows no signs of slowing down with more new firms capitalising on the post-pandemic boom. Despite the pressures on the supply chain, this is a big opportunity to impress new customers and win spend from larger brands who may be unable to deliver thanks to pressures on their traditionally inflexible supply chain processes. Smaller businesses are actually in a fantastic position to sidestep many of the challenges affecting the big brands as the crisis looks set to continue deep into 2022.
ShipBob is a $1bn+ fulfilment firm using a mix of tech and its own warehouses to help SME brands stock and deliver products around the world, they advise ways in which SME’s can manage supply chain disruptions in 2022 and beyond.
Making your size an asset
A huge asset for smaller brands and retailers is their size. They have the ability to make decisions quickly and be agile when faced with operational or technical challenges. In comparison to much larger competitors who have huge amounts of stock being delivered across the world, smaller brands are afforded flexibility and can look to new innovative ways on how they ship products.
Remember that size doesn’t mean you can’t look the part of a larger retailer. The right partner can help you offer Amazon Prime-like delivery services to your customers with updates to your brand and packaging to impress the wave of new customers. Last year saw a huge rise in international sales for smaller UK brands who are now seeking custom packaging, kitting, inserts, in-country fulfilment and low-cost shipping options all of which helped small businesses excel despite the disruptions.
Diversify your carriers
The UK is one of the most sophisticated ecommerce landscapes globally. UK consumers are more demanding and have higher expectations which requires the use of multiple smaller national and international carrier partners that can offer flexibility and different price options. By partnering with multiple carriers such as AEB Logistics, your business has greater flexibility and is less vulnerable when a crisis strikes.
Often big companies and retailers are far more dependent on the large carriers and are therefore more vulnerable when the supply chain collapses. For example, during the summer the cost of garden furniture soared as demand skyrocketed but whilst we all spent more time at home and outside in the garden, car manufacturers were having to close factories as they couldn’t source semiconductors for their vehicles and the general public feared the worst as rumours of food shortages hit the news.
For smaller brands it’s important to monitor carrier performance very closely as while they’ll be incredibly busy, consumers will likely blame your brand for delays. Be prepared to communicate proactively, appease customers, resend goods for free, update to express shipping and even change to a different carrier ad-hoc if required throughout the year.
Spreading the risk means you can mitigate against potential issues, keep stock moving and maintain great relationships with your customers.
Sounding out risk routes
Smaller brands may not have the expertise or size to manage their supply chain end to end, so partnering with the right logistics and fulfilment platform is crucial. Check in with your fulfilment partners each morning to sound out at risk routes as they’ll often have options to divert stock and opt for new delivery options that just aren’t feasible for the bigger brands. E-commerce logistics partners range in quality and what they are able to offer.
Coordination, cooperation and communication
The events of last year have shown how vulnerabilities in the supply chain can bring growth to a standstill and have a lasting impact on both large and small companies. More and more businesses are mitigating this risk by using innovative technology to track inventory, fulfil orders and identify the best carriers to deliver stock quickly and affordably.
Working with thousands of small brands has shown that coordination and cooperation are critical to avoid supply chain disruptions. Effective management of your supply chain provides several opportunities for your company to improve your profit margins and retain customers, but communication with every part of your supply chain is critical. Genuine engagement with those contributors is a win-win and will enable smaller brands and retailers to future proof their business as the crisis rumbles on further in 2022.