Retail: Costs vs. Profitability

Accurately calculating freight costs and delivery times to make online sales profitable for companies are, in this context of the e-commerce rise, some of the most important challenges for the retail sector.

Friday, March 26, 2021

The changes in consumer habits reported in the context of the new commercial reality, which arose quickly as a result of the Covid-19 outbreak and the restrictions imposed on mobility, have forced companies to transform the way they operate.

The rise of e-commerce is a reality in Central American markets. Research by CentralAmericaData shows that in January 2021 in Costa Rica, Panama and Honduras, interest in e-commerce services increased.

This increase in the preference for online shopping generates new challenges for retail companies, which must balance competitive prices with the inclusion of all the costs associated with product delivery.

In the case of the logistical costs involved in shipping products purchased online to other countries, there are some parameters. Efraín Castro, commercial manager for Guatemala at DHL Express, explained to that "... international logistics has three variables: origin, destination and weight, but it is recommended that the freight price should not exceed 25% of the value of the product".

You may be interested in "Business Solutions: Applications for the logistics sector"

The internal regulations of the destination countries, the tastes and needs of buyers, are variables and factors that have gained relevance, in order to develop the product abroad.

Currently, specialists identify specific challenges for online sales. The article outlines that these consist of:

  • "Disruptive competition: by new players joining the market and is driven by e-commerce.
  • Investment in technology: customers want package traceability, tracking times, range of situations and those who do not pursue digitization may disappear.
  • Customer service also is key especially with delivery times.
  • Customer loyalty and retention: this is one of the most complex parts of the process, to achieve that total satisfaction, that they feel satisfied and that all their needs can be met."

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