Why e-commerce startups and businesses must tie-up with right courier services and ensure nothing goes wrong with delivery services and/or shipping?
In the courier industry for every popular brand that we have heard about there are about 50 – 75 other unheard companies that operate and specialize in a specific leg of the whole delivery network.
The e – commerce companies have three options :
1.) To have their own delivery mechanism
2.) To outsource the delivery to a third party completely
3.) To jointly work with a third party
Depending on business volumes, availability of capital, margins and few other factors a company might decide to choose one of these.
Company Owned Distribution Network:
Why would you do that?
You want to be visible ( Branding)
Your business volumes are huge
You have a huge capital
You have huge warehouses that you need to stock your goods anyways
How would you do that?
Before you start :
Estimate branding opportunity ( Uniforms, vans, bags etc with ur brand identity and the impact of having it seen everywhere with people having lots of deliveries to do, this is a totally different topic, will not dwell into it here)
Calculate margins and compare delivery charges if you were to outsource
Consider other benefits ( Better control on deliveries, customer relations, etc)
Field study for : Customer Density Map, Logistics Friendly Location, Traffic Density around the locations, Cost of real estate, Proximity to local transportation(for your staff’s convenience), Other local positives and negatives.
Find out how you can recruit people. Either direct contact or going through a HR consulting company or an advertisement
Have a warehouse
Invest in a software
Understand how delivery business works
Define a hierarchy
Build a team by picking people who are in the courier companies(not the big ones). This is very critical. Select people who have the right age, motivation, ambitious and are stuck in a not so great job. Most importantly people who are social and can help you build a field army.
Build a field team
Define and train on SOPs
Conduct pilot runs and optimize the system
Completely Outsource the Delivery operations :
Identify organizations that can customize complete delivery solutions. There are a few extraordinary organizations that can help you plan out your delivery operations. You can have tighter control on the organization for the service quality but you need to test it out in all the cities you are planning to service.
If volumes are small just go with one of the trusted names, but you stand to get billed quite heavily.
Jointly managed Operations :
This works more like a part of the courier company’s staff and resources are on loan to you. So you dont invest in them but share revenues or pay per package or work out a mutually agreeable deal.
You can choose this is you are low on capital and dont have the bandwidth to setup facilities and recruit people and run the operations.
You can also benefit by having some branding done too. But effectively the courier company gives its expertise to your company.