20 min read

Emplicit’s Evan Sherman On How To Reduce Ecommerce Logistics Costs

QUICK SUMMARY

Evan Sherman is the Director, Inventory & Logistics at Emplicit. In this interview, he explains how ecommerce managers can reduce their logistics costs.

In this interview series, we are talking to ecommerce managers, supply chain professionals, logistics experts, and anyone with hands-on experience in ecommerce logistics. As a part of this series, I had the pleasure of interviewing Evan Sherman.

Evan Sherman

Evan Sherman is the Director, Inventory & Logistics at Emplicit. He joined the company in February 2023 and brings with him over 10 years in Operational Excellence and Inventory Management. Evan’s background includes overseeing the operations for a multi-state brick-and-mortar retailer and over four years of Seller Central inventory planning and management experience on Amazon. Evan has prior Amazon Agency experience and understands what it takes to win on Amazon.

Can you tell us a bit about your backstory and how you grew up?

I was born in the sunny state of Florida, where life was good, but as fate would have it, my family decided to embark on a new adventure when I was six years old. We packed our belongings and bid farewell to the sandy shores, heading west to the beautiful city of Scottsdale, Arizona.

My dad, a skilled chiropractor, and my mom, a dedicated occupational therapist, were always focused on helping others. Their passion for their respective fields was evident in everything they did, and it left a lasting impression on me. They instilled in me the values of hard work, compassion, and a drive to make a positive impact on the world.

Scottsdale became our new home, and it was there that I experienced a typical suburban upbringing. The neighborhood was filled with families like ours, and I quickly made friends who shared my love for adventure and the great outdoors. We would spend countless hours exploring the desert landscapes, climbing trees, and playing various sports. Being active and enjoying nature became an integral part of my childhood.

Education was highly valued in my family. From an early age, my parents emphasized the importance of knowledge and the power of learning. They encouraged me to excel in school, and I embraced the challenge wholeheartedly. I constantly sought new challenges and opportunities to expand my skills and knowledge. Whether it was participating in academic competitions, joining clubs, or pursuing extracurricular activities, I was always eager to grow and improve myself.

One thing that defined my upbringing was my independence. While I cherished the support and guidance of my family, I had a strong sense of self-reliance. This independence allowed me to explore my interests and take risks, knowing that my family would be there to catch me if I stumbled. Their unwavering support gave me the confidence to pursue my passions and embrace new experiences without fear of failure.

Looking back on my childhood, I am grateful for the opportunities I had and the foundation my family provided. The combination of a loving and supportive environment, a focus on education, and the freedom to explore and challenge myself shaped the person I am today. I am forever indebted to my parents for instilling in me the values that continue to guide me on my journey through life.

What led you to this specific career path?

I never thought my career path would lead me to the realm of ecommerce. From a young age, I had my sights set on becoming a lawyer. However, life has a way of surprising us, and sometimes those surprises can change our trajectory in unexpected ways.

It all started with a chance encounter at a wedding. I struck up a conversation with a relative who happened to own a retail business based in Washington, DC. As we talked, I became fascinated by the inner workings of his business and the challenges he faced in managing inventory, logistics, and overall business operations. It was an entirely different world from what I had envisioned, but it sparked curiosity within me.

Intrigued by the prospect of running a business, I made the bold decision to uproot myself and move to DC. I wanted to immerse myself in the business environment, learn the ropes, and discover if this was a path I could truly pursue. As I delved deeper into the intricacies of inventory management and logistics, I found myself falling in love with the field. The dynamic nature of business operations and the constant evolution of the ecommerce landscape captivated me.

I understood the world was rapidly changing, and ecommerce was at the forefront of that transformation. The rise of online shopping and the continuous growth of ecommerce platforms like Amazon presented immense opportunities. I knew that if I wanted to be a part of this exponential growth, I had to adapt and carve my niche in this evolving industry.

After starting a family, I made the decision to relocate to Seattle, Washington. Here, I leveraged my retail experience and pivoted into the realm of ecommerce. I took on the responsibility of managing a business's Amazon account, and it was a game-changer. The excitement and challenges of working with Amazon were invigorating, pushing me to learn and adapt to a fast-paced environment.

Driven by my passion for this new world, I actively sought out opportunities to deepen my involvement in ecommerce. I transitioned from managing a fulfilled-by-merchant Amazon business to taking charge of the inventory department at a top-rated Amazon agency. In this role, I had the privilege of overseeing operations for Fortune 500 companies, witnessing firsthand the intricacies of logistics and the importance of streamlined inventory management.

As my expertise grew, so did my career. I eventually found myself in the position of Director of Logistics at Emplicit, a role that allowed me to make significant contributions to the company's growth and success. The challenges I faced were vast, but the rewards were even greater.

Reflecting on my unconventional journey, I couldn't be happier with how it has unfolded. The unexpected detour from my initial aspirations led me to a career that excites and fulfills me in ways I never could have imagined. The world of ecommerce, with its constant evolution and boundless opportunities, has become my calling. Through inventory management, logistics, and business operations, I have found my place in an industry that keeps me engaged, challenged, and motivated to continuously learn and grow.

Can you share the most exciting story that has happened to you since you began at the company?

One of the most exhilarating moments occurred on my second day when I was invited to join a client call with a significant client who was facing challenges in inventory management. During the call, I actively engaged with the client, identified their pain points, and promptly devised a replenishment tool that addressed their visibility issues. This client interaction ultimately sparked a comprehensive transformation across our organization's approach to inventory replenishment on Amazon.

What are some of the most interesting or exciting projects you are working on now? How do you think that might help people?

Currently, I'm actively engaged in a project aimed at enhancing our inventory management processes. We are focusing on introducing automation and scaling measures, which is quite intriguing. Once successfully implemented, these advancements will significantly reduce the time and effort required for our team members to generate replenishment requests on behalf of our clients. This streamlining of operations will not only boost efficiency but also allow us to serve our clients more effectively and promptly.

What are three traits about yourself that you feel helped fuel your success?

Solution-driven: I don’t believe in problems, only solutions to challenges presenting us.
Logical: I apply the rule of being logical when faced with challenges. I look at the situation from multiple stakeholder perspectives, and I work to create solutions that address those challenges.
Passionate: I love what I do, and I use that as motivation to constantly innovate and continue improving my knowledge and skill set. I will never stop learning or growing.

What was the original vision for the ecommerce business? What pain point(s) were you trying to solve for your customers?

The company that evolved into Emplicit started as an Amazon seller. Other sellers started to use our services, and eventually, we adopted the agency model, shifting from selling our own products to ecommerce management and marketing exclusively for other brands.

Typical client pain points are obviously sales and margin related, but digging deeper, you can see what drives these pain points. There are now literally hundreds of individual factors which impact algorithmic performance, organic and paid rankings, click-throughs, and conversions, all of which contribute to sales and margin. No one person can possibly keep abreast of all these factors and their relative importance and understand how they interconnect.

Emplicit solves this challenge by having a team of subject matter experts, and the agency model enables clients to benefit from 10% of 10 experts rather than 100% of 1 generalist if they hired internally.

What are some of the biggest challenges you currently face regarding ecommerce logistics costs?

Shipping and delivery expenses: Ecommerce companies often struggle with high shipping and delivery costs, especially if they offer free or discounted shipping to customers. Balancing customer expectations with the cost of shipping can be challenging, particularly for small or new businesses with limited bargaining power.

Inventory management: Maintaining adequate inventory levels while minimizing storage and warehousing costs is crucial. Overstocking can tie up capital and increase warehousing expenses, while understocking can lead to missed sales opportunities and customer dissatisfaction.

Returns and reverse logistics: Processing returns and managing reverse logistics can be costly for ecommerce businesses. Handling returns, restocking items, and managing the associated logistics can lead to additional expenses and operational complexities.

International shipping and customs: For businesses operating on a global scale, international shipping and customs processes present unique challenges. Tariffs, customs duties, documentation requirements, and varying regulations across different countries can significantly impact logistics costs.

Packaging and materials: The cost of packaging materials, such as boxes, cushioning, and tape, can add up, especially for businesses that ship fragile or bulky items. Balancing the need for protective packaging with cost-efficiency can be a challenge.

Supply chain visibility: Lack of real-time visibility into the supply chain can lead to inefficiencies and increased costs. Without accurate tracking and monitoring of shipments, it becomes challenging to optimize logistics operations and identify areas for improvement.

What role do technology and automation play in reducing ecommerce logistics costs, and what specific tools or solutions have you found most effective in achieving this?

Technology and automation play a significant role in reducing ecommerce logistics costs by streamlining operations, improving efficiency, and enhancing decision-making processes. Here are some specific solutions that I have found to be effective.

Warehouse Management Systems (WMS): WMS software helps optimize inventory management, space utilization, and order fulfillment processes. It enables real-time tracking of inventory, improves picking and packing efficiency, and minimizes errors. By maximizing warehouse efficiency, WMS can reduce labor costs and improve overall logistics operations.

Transportation Management Systems (TMS): TMS solutions help optimize transportation planning, route optimization, and carrier selection. They provide visibility into shipping options, rates, and transit times, allowing businesses to make informed decisions. TMS can help reduce transportation costs, minimize empty miles, and improve customer satisfaction by ensuring timely deliveries.

Inventory Management Software: Advanced inventory management systems enable businesses to accurately forecast demand, plan procurement, and optimize stock levels. By reducing excess inventory and minimizing stockouts, businesses can improve cash flow, reduce storage costs, and enhance customer satisfaction.

Data Analytics and Business Intelligence: By leveraging data analytics and business intelligence tools, ecommerce businesses can gain valuable insights into their logistics operations. They can identify areas of inefficiency, track key performance indicators (KPIs), and make data-driven decisions to optimize costs, streamline processes, and improve overall performance.

Real-Time Shipment Tracking: Implementing real-time shipment tracking solutions allows businesses and customers to monitor the status and location of shipments. It enhances transparency, reduces customer inquiries, and helps identify and address potential delays or issues proactively.

How do you ensure that your logistics providers deliver the highest quality of service at the lowest possible cost, and what metrics do you use to measure their performance?

When it comes to ensuring that logistics providers deliver the highest quality of service, I prefer to use KPIs to ensure that my standards are being achieved. Below are the KPIs that I utilize.

On-time delivery: Tracking the percentage of deliveries made on time.
Order accuracy: Measuring the accuracy of order fulfillment and minimizing errors.
Transportation cost per unit: Calculating the cost of transportation per unit of goods delivered.
Warehousing efficiency: Assessing metrics such as order processing time, stock accuracy, and inventory turnover.
Customer satisfaction: Gathering feedback from customers regarding the quality of logistics services provided.
Regular performance reviews: Conducting periodic performance reviews with logistics providers helps identify areas for improvement and encourages open communication. These reviews can address any service issues, evaluate performance against agreed-upon metrics, and discuss opportunities for cost optimization.
Continuous monitoring and reporting: Implementing systems to monitor logistics activities and track performance in real time allows businesses to address issues promptly. Automated alerts and reports can help identify bottlenecks, track trends, and proactively manage logistics operations.
Data sharing and collaboration: Establishing a collaborative relationship with logistics providers by sharing relevant data can lead to better performance. Sharing sales forecasts, inventory levels, and other relevant data allows providers to align their operations, optimize routes, and plan resources more efficiently.

What are some of the key factors that influence your decisions when selecting logistics providers, and what advice would you give to other ecommerce professionals looking to make similar choices?

When selecting logistics providers, there are several key factors that I consider.

Reliability and performance: It's crucial to choose a logistics provider that has a track record of reliability and excellent performance. I look for companies with proven experience in handling ecommerce logistics, delivering packages on time, and providing accurate tracking information. I read reviews and seek recommendations from other ecommerce professionals to assess their reputation.

Scalability and flexibility: As your business grows, you'll want a logistics partner that can scale with your needs. Consider the provider's ability to handle increased order volumes during peak seasons and their capacity to adapt to changes in your business requirements. Flexibility in service options, such as offering multiple shipping methods or integrating with your ecommerce platform, is critical.

Cost-effectiveness: Evaluate the pricing structure and overall cost-effectiveness of the logistics provider. Compare rates, fees, and additional services they offer to ensure they align with your budget and business model. However, cheaper options may not always provide the best value in terms of reliability and service quality, so it is important to align your business needs first and foremost.

Geographic coverage: If your ecommerce business operates on a global scale, it's essential to choose a logistics provider with broad geographic coverage. Assess their ability to handle international shipments, including customs clearance, and ensure they have a network of distribution centers or fulfillment partners in strategic locations to optimize shipping efficiency.

Technology and integration: It's crucial to partner with a logistics provider that offers robust technology solutions and seamless integration with your ecommerce platform. I look for features such as automated order processing, real-time tracking updates, and inventory management systems. Efficient integration can streamline operations and provide better visibility into your supply chain.

Customer service: Strong customer service is invaluable when it comes to logistics providers. Prompt and helpful support can make a significant difference in resolving issues, addressing concerns, and maintaining good communication throughout the shipping process. Consider the responsiveness and accessibility of the provider's customer service team.

My advice to other ecommerce professionals looking to choose logistics providers is to research and assess multiple options thoroughly. Take the time to understand your specific business needs and align them with the capabilities and strengths of potential providers. Seek recommendations and feedback from other ecommerce professionals or industry networks to gain insights and make informed decisions.

Additionally, consider starting with smaller pilot projects or trial periods to test the capabilities and compatibility of the logistics providers before committing to long-term contracts. This allows you to assess their performance firsthand and adjust if necessary.

Remember, choosing the right logistics provider is a critical decision that can impact your overall customer experience, operational efficiency, and business growth. Prioritize the factors that are most important to your business and aim for a reliable and strategic partnership that supports your ecommerce goals.

Can you share five innovative or unconventional strategies you’ve employed to reduce ecommerce logistics costs?

1. Optimizing packaging and dimensional weight: By optimizing packaging and reducing dimensional weight, you can decrease shipping costs. Implementing packaging designs that are lightweight yet sturdy while still protecting the contents can lead to significant savings. Additionally, accurately measuring and recording package dimensions can prevent overestimation and help avoid unnecessary dimensional weight charges from carriers. This strategy has been successful in reducing shipping costs by eliminating wasted space and optimizing package sizes to fit carrier guidelines.

2. Implementing inventory optimization techniques: Efficient inventory management plays a crucial role in reducing logistics costs. By employing techniques such as demand forecasting, safety stock optimization, and just-in-time inventory, you can minimize carrying costs, reduce the risk of stockouts, and avoid unnecessary transportation expenses. Applying data-driven analytics and leveraging inventory management software can provide insights into consumer demand patterns and help optimize stock levels. This strategy has been successful in reducing inventory holding costs and streamlining logistics operations.

3. Lean inventory management: Employing lean inventory management principles involves reducing excess stock and adopting just-in-time (JIT) inventory practices. By accurately forecasting demand, optimizing consumer demand patterns, and maintaining minimal inventory levels, businesses can reduce carrying costs, minimize the risk of obsolescence, and improve cash flow. This strategy enables cost savings while maintaining adequate stock levels to meet customer demand.

4. Exploring alternative delivery options: In addition to traditional shipping carriers, exploring alternative delivery options can present cost-saving opportunities. This may involve partnering with local couriers, using crowdsourced delivery platforms, or utilizing lockers and pickup locations. By diversifying your delivery network, you can potentially reduce shipping expenses, optimize last-mile delivery, and provide greater flexibility for customers. This strategy has been successful in lowering shipping costs, particularly for businesses operating in densely populated areas or those with specific delivery requirements.

5. Multi-channel fulfillment: Utilizing multiple channels for fulfillment, such as physical stores, drop-off locations, or partner networks, can optimize the delivery process and reduce costs. By leveraging existing retail locations or partnering with local businesses, ecommerce companies can achieve faster and more cost-effective last-mile delivery. This strategy helps reduce transportation expenses and enhances customer convenience.

Looking ahead, what are the biggest challenges and opportunities in reducing ecommerce logistics costs, and how do you plan to address them in the coming years?

Looking ahead, there are several significant challenges and opportunities in reducing ecommerce logistics costs. Addressing these challenges and capitalizing on the opportunities will be crucial for businesses to maintain a competitive edge.

1. Rising transportation costs: One of the biggest challenges in reducing ecommerce logistics costs is the continuous increase in transportation expenses. Factors such as fuel prices, carrier rates, and last-mile delivery complexities contribute to this challenge. To address this, I constantly explore partnerships with multiple carriers to negotiate competitive rates, optimize shipping routes and modes, leverage technology for route planning and optimization, and consider alternative delivery options like crowdsourced or local couriers. Investing in efficient warehouse management systems and inventory optimization techniques can also help minimize transportation costs.

2. Inventory management and warehousing efficiency: Inefficient inventory management and warehousing practices lead to increased costs. I focus on optimizing inventory levels, implementing demand forecasting algorithms, and adopting just-in-time inventory strategies. This helps reduce carrying costs, minimize the risk of stockouts or overstocking, and improve overall warehouse efficiency. Leveraging advanced warehouse management systems, automation technologies, and robotics can streamline operations, enhance picking and packing processes, and improve space utilization, ultimately reducing costs.

3. Sustainable packaging and reverse logistics: The growing concern for sustainability presents a challenge and an opportunity to reduce logistics costs. I have clients exploring eco-friendly packaging alternatives, right-sizing packaging to reduce waste, and promoting recycling initiatives. Implementing efficient reverse logistics processes for returns can help minimize costs associated with reverse transportation while also enhancing customer satisfaction. By integrating sustainability practices into their logistics operations, businesses can demonstrate environmental responsibility while achieving cost savings.

4. Data analytics and technology integration: Harnessing the power of data analytics and technology is essential for optimizing ecommerce logistics costs. By leveraging data insights, businesses can identify inefficiencies, improve forecasting accuracy, enhance supply chain visibility, and make data-driven decisions. Investing in advanced analytics tools, artificial intelligence, and machine learning algorithms can optimize route planning, inventory management, and demand forecasting. Seamless integration between ecommerce platforms, warehouse management systems, and logistics providers can streamline operations, reduce manual errors, and improve overall cost efficiency.

In the coming years, addressing these challenges and seizing the opportunities to reduce ecommerce logistics costs will require a combination of strategic planning, technology adoption, collaboration with logistics partners, and a focus on continuous improvement. Regularly evaluating performance metrics, monitoring industry trends, and staying agile in adapting to changing customer expectations will be crucial for success.

If you could start a movement that would bring the most good to the most people, what would that be?

Tolerance and compassion for people/ideas/beliefs different from your own.

What "next big thing" tactic or strategy should leaders in ecommerce be digging into?

Augmented reality (AR) and virtual reality (VR) tech has the potential to revolutionize ecommerce by providing immersive and interactive experiences for customers.

What is everyone wrong about in ecommerce?

The idea that price is the sole driving factor for ecommerce success—customer experience matters equally.

What are you reading right now?

The Art of War, by Sun Tzu.

What product, tool, or service do you wish existed?

A real-life easy button.

What product are you obsessively using right now?

I am constantly leveraging ChatGPT for advanced Excel formulas and data modeling.

How can our readers further follow your work online?

To stay up to date on all the exciting initiatives we're undertaking for our clients, I encourage you to follow Emplicit on LinkedIn. By following us on LinkedIn, you'll have access to regular updates and insights into our work. It's a great way to stay connected and get firsthand information about the awesome projects we're working on.

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