Retail cooperatives have long helped small, independent stores buy in bulk. These loose federations could also provide solutions for e-commerce shipping and returns.
The idea is simple. A group of retail companies pool their funds to purchase products in bulk.
Cooperatives have helped small retailers increase their purchasing power. Does this concept also work for e-commerce shipping?
A hardware store in Boise, ID would like to stock DeWalt tools, but they may not have enough buying power to get the lowest price. But if you team up with 50 independent hardware stores across the country, suddenly your group has a collective resource to take seriously.
That is what retail cooperatives do.
large shipments
pay attention to shipping and will come back. There are at least three factors that can impact e-commerce shipping: scale, or the size of your business.
fulfillment center
Retail giant Walmart derived approximately 17% of its sales from e-commerce in 2023. had 34 e-commerce fulfillment centers and 100 e-commerce distribution facilities in the United States as of early 2023.
These facilities speed delivery by placing products closer to customers. This gives him two advantages over smaller retailers who ship from a single location. Walmart can deliver the same item faster due to shorter travel distances, and should have lower shipping costs for the same reason..
physical location
A physical location allows shoppers to pick up their orders and make returns. Walmart can consolidate these items and reduce return shipping costs.
career
The third advantage is our own delivery service.consider amazon logistics. According to one source, it will carry 5.9 billion parcels in 2023. Pitney Bowes report. UPS transported approximately 4.6 billion packages and FedEx 3.9 billion packages. Only the U.S. Postal Service delivers more domestic packages than Amazon Logistics.
Without a logistics department, Amazon would have to pay the bills and rely on USPS, UPS, or FedEx.and Amazon isn’t the only e-commerce business that offers some kind of delivery service.
cooperation
I know very few e-commerce small businesses that are considering forming a cooperative for shipping. Perhaps this article will make them think.
Store location
Retailers can ship to each other. Imagine you own a hardware store in Boise, Idaho. You are part of a retailer cooperative that is affiliated with another store in Michigan. You both stock and sell the DeWalt DW46RN Roofing Nailer. Both stores list nail guns on their websites.
A shop in Michigan received an order for DW46RN from a customer in Nampa, Idaho. Ground shipping via UPS will take at least 4 days.your Our Boise store can deliver your nail gun within one day and for a much cheaper price.
In effect, a retail cooperative of 50 stores is akin to 50 strategically located e-commerce fulfillment centers.
This concept could also be extended to return drop-offs. If the same customer needs to return the nailer, they can do so in Boise and save on shipping costs.
career options
Participating stores may use alternative carriers. According to a Pitney Bowes report, “other” carriers grew 28.5% in 2023 and collectively processed more than 600 million packages. Many of these “others” are local package carriers and rideshare services. Deliver quickly.
If a Michigan shop and a partner in Boise work together, a roofing nailer could be on the way to a buyer in an hour. Perhaps the joint system is involved.
worth exploring
retail cooperative (different from) retailno, cooperatives, which are groups of consumers), give independent stores and chains more collective purchasing power.
Can retail co-ops be applied to other parts of the business, such as e-commerce fulfillment? It’s worth considering, especially for companies competing with corporate brands.
