Most e-commerce businesses are unaware that their logistics costs are 2x to 5x higher than Amazon's. On a typical 100€ order, this can mean a 5-10€ loss on the bottom line. At the same time, if the delivery speeds are roughly twice as slow, it can lead to a 10% decrease in conversion rate or a 10% drop in GMV for the same amount of traffic.                              

This gap has only widened in recent years with the rise of same-day delivery and other faster fulfillment methods from major players.    

For many companies, logistics is seen as a simple cost center—not a strategic advantage. I believe this is a huge mistake and a key reason why Amazon dominates the market.  

If you take a step back, what are the primary drivers of success for e-commerce businesses?    

1. Assortment: Having the right product at the right price is the first thing that gets customers to your site. This is especially true if you don't own the brand yourself.
2. Logistics: This is how you turn an online sale into a physical delivery. A poor delivery experience will send customers straight to your competitors.

In a world where you and your competitors often sell the same products at similar prices, the delivery experience is one of the only ways to truly differentiate yourself.

Amazon understood this long ago. They've invested heavily in their logistics network, which gives them complete control over the customer experience. This not only builds brand loyalty but also reduces costs in the long run.    

Fraud such as refund abuse are heavily driven by weak operations. Hence when management underestimates their operations, they also underestimate their cost exposure to fraud.

Chaynon provides audits and operational recommendations to adjust your investments based on your product category, repeat purchase rates, average order value (AOV), and competitors. With the right strategy, you can transform a cost center into a powerful differentiator, a barrier to entry, and even a potential revenue stream. Contact us!

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