African Flextock bags $3.25 million seed investment - MENA startups, innovation, and tech news

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African Flextock bags $3.25 million seed investment
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African Flextock bags $3.25 million seed investment

Flextock, one of the 10 African startups from the recent Y Combinator winter batch, has bagged an impressive pre-seed (pre-seed investment is the initial investment required for a startup to run) round just two months after graduation. The five-month-old company, which helps consumers and businesses manage e-commerce and fulfillment operations —  from warehousing and logistics to delivery and cash collection — has closed a $3.25 million pre-seed investment.

Such a high pre-seed investment to an E-commerce logistics company in the above case study clearly indicates why E-commerce logistics are new veins of the economy. Managing logistics is the greatest challenge for any e-commerce company. In this scenario, e-commerce logistics have a very vast and important role to play.

 

What is e-commerce logistics?

In simple terms they perform the responsibility to deliver the products from the e-commerce company to the customer, they are the only connecting link between the manufacturer and the buyer. UPS, FedEx, Flexport are some world's largest e-commerce logistics brands.

How E-Commerce Logistics Works

A logistics company functions in two directions:

Forward Direction – Distribution and delivery of goods to the buyer.

Reverse Direction – Exchanging or replacement of defective, damaged, or wrong shipments.

For an E-Commerce company logistics in the forward direction involves receiving an online order, arranging for the item, packaging, preparing its invoice, arranging the payment, dispatching, and delivering the item to the customer’s doorstep

Working in Reverse Direction

Despite the best efforts the possibilities of incorrect or damaged shipments cannot be ruled out. In such situations an efficient reverse logistics is essential. It is the responsibility of logistics to take back these defective or damaged materials and replace them with proper order that satisfies the customer within a reasonable time.

What it takes to develop a brand of E-commerce Logistics

• Interpersonal Relationship – This relationship is established by delivery boys who are the face of an eCommerce company to buyers. Delivery boys must always be well-behaved and patient with customers.

• Supply chain management– efficient supply chain management is a must to ensure the delivery of the product

• Decentralized Warehousing– The warehouse should be near the distribution centers, Latest trend in e-commerce is moving the product closer to the customer(at his doorstep). These smaller facilities are more responsive to customer orders and can reduce delivery times.

• Managing returns– there should be a well-organized system of picking the defective product from the customer without any customer dissatisfaction.

• Free Shipping- In a recent study, 73 percent of online shoppers said unconditional free shipping was "critical" to their purchase decision.

Some of the challenges faced by eCommerce Logistics companies-

• Inventory Management- Inventory management involves monitoring stored goods using proper methods. The process also allows a store to make future predictions based on customer buying trends

• Warehousing/Storage Warehousing revolves around having a physical store where products are stored, managed, and tracked before being dispatched to customers

• Same Day Delivery– Customers want a platform that allows them to receive their orders the same day. This means that companies have to work harder to ensure faster e-commerce logistics.

• Fraud- Criminals have especially targeted online shopping platforms to gain access to user data through the hacking of systems. When clients shop online, they want their details to remain safe. However, unauthorized access to online data has been on the rise in the recent past. The information is then used to dupe both sellers and buyers to give in to the fraudsters’ demands. However, most companies have come up with security solutions as well as customer awareness campaigns against fraud either through phishing or hacking of data.

Current opportunities- The current scenario amid the covid-19 pandemic is extremely suitable for an E-commerce logistics company to take birth, for the reason that most of the customers do not want to risk their lives.

In a nutshell E-Commerce logistics is the revolution in the digital world with a mission to enable all merchants, regardless of their size, to efficiently scale their brands.

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