Start-ups can conquer this hurdle in e-commerce with this solution
**The power of the Internet has democratized the way we do business. Independent artisans and start-ups can now sell and market products across the world and it seems like it is much easier for anyone to thrive in the age of e-commerce. But this is not necessarily true. **
For any business to expand and compete in the global marketplace, there is one thing (or more so, a machinery) that small and medium-sized organizations need that only big players can afford to operate — logistics.
In any large corporation, a logistics office manages and processes all orders, coordinate and track shipments, analyze supply chain systems from shipping, warehousing and procurement and make sure everything is working together to deliver their products correctly and on time.
Shinya Uenoyama, CEO of STARX, a market innovation company based in Japan, saw this e-commerce “challenge” for start-ups as an opportunity and created a tech logistics solution service. Cloudlogi is a cloud platform for any small and medium business enterprise that would manage their entire logistics workflow from sales to delivery.
“For the past ten years, the technology for selling goods over the internet has developed extensively, however the technology to physically distribute those goods is still stuck in the past. Large corporations like Amazon can afford enormous investment in the automation and optimization of logistics, but smaller businesses can’t hold a candle to that. Not being able to handle logistics themselves is the issue that we’re focused on. So we have developed our Cloudlogi representative shipping service with the goal of providing a system to these smaller businesses that fulfills the role of a Chief Logistics Officer,” Uenoyama explained.
Before starting the company, Uenoyama worked in marketing health food products. He personally witnessed how distribution workplaces were overrun with inefficiencies. There was an over-reliance on faxes and written memos, no shortage of failures in communication and shipping, and time-consuming methods of storage management.
Drawing from this experience, Uenoyama developed Cloudlogi to be a platform where all the work involved in e-commerce logistics — warehouse loading and management, packing and shipping, history checking — can be outsourced. The system reduces costs by connecting together warehouses and e-commerce enterprises across Japan. As well as being able to manage product lot numbers and personal data such as customer purchase history, it also simplifies the handling of detailed orders such as gifts, and has played a role in reducing mis-shipments.
“The objective of Cloudlogi is to create a system which benefits all players tied to e-commerce,” he added.
In just two years, they acquired over 550 clients both start-ups and manufacturers, and has overseen logistics worth almost 50 billion yen (500 million dollars).
Connecting and hosting the entire logistics ecosystem allows Cloudlogi to collect data for its clients. Take for example products that are consumed through a routine, such as cosmetics and health food products. Cloudlogi can see who, when and at what frequency such products are being bought, allowing them to make a good estimate of the demand. Based on this estimate, distribution companies can conduct more appropriate stocking and storage hedges, and more efficient delivery, and manufacturers can adjust their materials and ingredients to lower production costs.
“In Japan there are many small manufacturers creating high quality cosmetics and beauty-related products, however not being able to cross the hurdle of logistics can make doing business quite difficult,” he explained.
As much as it is tech solution for start-ups, the optimization of logistics systems by Cloudlogi, it has, more importantly, tackled the industry’s labor shortage in the country. In 2016 alone, the number of packages delivered to homes annually reached roughly 4.02 billion and is estimated to increase to 6 billion by 2020. With Japan’s rapidly aging society, an increase in workforce is not going to happen anytime soon. A supportive presence for future entrepreneurs and Japan’s growth partner in the e-commerce economy, this is the most crucial role Starx has taken on.
