Distribution systems for electronic commerce

Wal-Mart and Toys 'r us failed to deliver on-line Christmas orders last winter. Failures of these well-known companies in digital marketplaces demonstrate the importance of logistics operations for electronic commerce (EC). It is obvious that many dotcom companies do not professionally manage the logistics operations. A well-organized logistics function increases the profit while maximizing total customer satisfaction. Although all logistics functions are vitally important for a successful EC venture, this paper primarily discusses the importance of having a reliable distribution system in digital marketplaces. After discussing the existing electronic, home delivery and parcel/postal delivery systems, possible strategic decisions to improve the present distribution systems have been identified.