Of the record $17.8 billion in sales generated by independent US retailers and restaurants on “Small Business Saturday” earlier this holiday shopping season, 41% came from online buyers, a 17% increase over last year. But the dark side of these ecommerce surges is that many small-to-medium businesses (SMBs) aren’t equipped to handle them.
“A lot of companies selling online are actually losing money,” notes Diego Pantoja-Navajas, Oracle vice president of product development. That’s because those companies are incurring “net shipping losses”—they’re paying more money to ship customer orders than they receive in shipping revenue, Pantoja-Navajas says.
Even the biggest of the big are concerned. For example, Amazon.com, which spent $21.7 billion on shipping last year, warned in its 2017 annual report that if it doesn’t get its fulfillment operations right, its business could be harmed.
While most SMBs won’t spend billions of dollars on logistics, “even a tiny fraction of those costs could ruin a small business, especially if it’s not managing those operations with the right technology,” notes Oracle senior product strategist Bob Meixner.