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Every business that sells products online needs a way to transport those products to their customers, and this alone can involve more management time and cost than the manufacture of the product in the first place!
Small online retailers often do not appreciate this part of their operation when developing business plans, and it often can be a cause of them missing their profit targets. For start-ups especially, it is difficult to forecast parcel courier & postal costs. There are many suppliers to choose from and choosing incorrectly can have many implications. How can you be sure that you’re partnering with the right one when so many providers offer the same services?
In order to determine what you need from a parcel courier and postal provider, you need to gather information from the following areas of your business:
The auditing of current performance and costs of delivery is vital: Ensure that every element of cost is recorded and analysed, and make time to compare a range of suppliers. Time spent upfront will ensure profitability later.
Understanding the supplier’s strengths and weaknesses
You know your company’s requirements, and those of your clients Understanding how your relationship with the courier or postal supplier will benefit your business is also very important: How flexible are they, can they scale up and down dependent on sales cycles, will they commit to a fixed costs based on volume of items to be delivered?
One key question is: What is their delivery ethos? After all it is their staff who maybe meeting your clients face to face, and to many clients that aspect is part of the overall buying experience so a poor delivery encounter can reflect badly on the product being delivered.
Which of these and similar questions are of the most importance to your business? Prioritise them and then go to the market to get quotes. It may be that you need the assistance of someone outside your organisation to help you understand the implications of these questions so choose someone with lots of logistics knowledge across a wide range of providers: Local business groups and agencies should be your first port of call.
It’s imperative to ensure that the courier or postal provider you’ve chosen has proven their financial stability. Doing this will keep your business running as you and your customers expect. Stability also includes payment history, which can be confirmed by requesting their list of partners and contacting them. The demise of CityLink a few years ago is a case in point though it is true to say that the small online businesses caught up in their closure could do little to foresee it coming.
Track record, references and sales impact
A list of reliable and long-term clients will reveal a provider’s continued reliability and efficiency, and the more of these they have, the better. A list of referees with nothing but good things to say is a good indicator of a provider that’s well-suited to your business, but make sure that the references are from business similar to yours.
Can they offer scalability?
The ability of your provider to offer scalability will have a direct impact on your efficiency. Their ability to quickly scale up or down when demand for your products increases or decreases will speak volumes about their scalability. The best provider for you will be one who has already experienced these business ups and downs with their other clients.
When all of the above points have been addressed and your new provider relationship begins to gather momentum, the most important thing will be to communicate frequently. Once everyone has settled in with the new partnership, your communications may not need to occur as frequently.