4 Ways to Improve Logistics Profitability

Logistics employee walking through stacks of boxes in a warehouse.


Let’s briefly start with the simple question, what is logistics? Logistics definition: the process an eCommerce business uses to get products to customers. Since there are so many moving parts to logistics, a lack of attention to detail can lead to increased costs. Amazon logistics, or wherever you’re selling, is an invaluable aspect of your selling experience. You can maximize your logistics profitability by optimizing shipping methods, carrying efficient inventory levels, good communicating with customers, and investing in technology. 

  1. Optimize Shipping Methods: Some companies rely on a “one size fits all” shipping policy by choosing an arbitrary shipping method (UPS Ground) and using that for all orders. This can simplify the fulfillment process and make it easier for the warehouse team to ship the orders. The extra effort to implement shipping rules can pay off quickly. Depending on the size of the product, some rates could be cut in half. Inventory is one of the most expensive aspects of doing business. 
  2. Carry Efficient Inventory Levels: Companies can save money on overstocking by carrying the appropriate amount of inventory. Forecasting accurately can also help improve this. Many companies see customer service as a box to check that they respond to incoming messages. It should be seen as an opportunity to ensure a positive buying experience for the customer.
  3. Good Communication with Customers: Better communication with the customer can minimize returns by being proactive and transparent on product details or conditions. 
  4. Invest In Technology: Finally, technology can increase productivity and minimize errors in fulfillment. Warehouse employees can be prompted with double checks on picking the correct product. Technology can also measure employee productivity through tracking. 

There are many opportunities to increase profitability in logistics, but the most efficient ways are optimizing shipping methods, carrying appropriate inventory levels, good communication with customers, and investing in technology.

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