Outsourcing is not a new concept, but even today, most businesses struggle to make the decision. There’s a fine line to draw between what you handle and what you hand off to your partners. More specifically, should you outsource delivery to benefit your business?
Most business owners contemplate outsourcing their deliveries, but ultimately are fearful when it’s time to jump. Whether you’re wondering what’s best for your new business or wondering if it’s time for a change, this article is for you.
Keep reading to find out how the pros and cons of each option compare – and why outsourcing your deliveries will ultimately suit most businesses.
In House Delivery
In-house delivery refers to a business completing their own deliveries with their own resources and employees. Working with an in-house delivery system means you’re not partnered with any external delivery provider like FedEx, Canada Post, or UPS.
Advantages
1. More control
The reason some businesses choose to keep delivery in-house is control. When you’re in charge of everything, you know what goes wrong and can fix it on your own. Some business owners feel like this is the best way to avoid poor deliveries and ensure all processes are running smoothly.
Being in charge of your own deliveries gives you full clarity and control, so if something goes wrong, you know right away. You’ll also know exactly why the delivery went wrong, which means you can worry less about catching up with your delivery provider.
Disadvantages
1. Less time
While most believe in-house delivery increases control, this affects the success of your business. In fact, most business owners lose so much time trying to control their own deliveries that the business suffers as a reaction.
When you’re responsible for your own deliveries, you need to make sure all processes are working properly. First, all the parcels need to be picked and packed, set to be organized for their delivery route. Then, you’ll need to have systems in place to create driver routes (not to mention find drivers to deliver the parcels). And on top of all of this, you’ll be responsible for making sure deliveries make it to customers without error – and if they don’t, you need to find out why.
Hence, focusing on your area of expertise is the fastest way to grow your business. Spreading yourself too thin will cost you in the long run, and you’ll end up spending too much time on the tasks you could outsource instead. Instead of attempting to take hold of things like deliveries, you can be building new product lines and growing sales. Then, allow the experts to take some tasks off your to-do list and focus on their strengths.
2. Heavy starting costs
While managing your own in-house deliveries might make sense long-term, the starting costs can be higher than expected. This is because you’ll need to acquire workers, software and strategies that work for your business, even when you might not have many orders to start with.
All of these costs can quickly add up, and there’s likely a few you won’t know about at the start. Besides the personnel, equipment costs can quickly rise as well, like label printers, delivery cars, and much more. Some businesses using in-house delivery will rely on drivers who use their own vehicle, but then extra compensation will be needed to pay them for this. Costs can rise very fast.
Once your deliveries pick up in pace, you’ll be earning more revenue and will be able to put this back into your business (however, you’ll also need to pay more workers to handle the increase in volume). Hence, starting in-house deliveries can be expensive with not much return on investment.
3. Liability
Finally, resorting to in-house deliveries means all the responsibility falls onto your business if anything goes wrong.
Now, this disadvantage should not be taken the wrong way. Just like everything when running your own business, you’re used to making smart decisions and understanding that mistakes can occur along the way which you’ll need to take responsibility for. But since deliveries can be difficult to manage, and mistakes can occur that are out of control, experts can typically handle them better than other people.
For example, some parcels won’t be delivered on time and those customers will look to you for an answer. Delivery experts know to take steps in advance to avoid problems like this, such as checking addresses beforehand to make sure they are complete and accurate. These are only things you can learn after being in the industry for years, and it goes to show why these experts are trusted with deliveries for businesses all across the world.
Hence, being liable for errors is fine – and is a must – when you have your own business. You can’t avoid taking responsibility for problems you had no control over. But to avoid liability with complex delivery problems, it can be much better to just leave it to the experts.
Outsourced Delivery
Outsourced deliveries refer to another company handling your shipments and deliveries instead of taking care of them yourself. This means other companies will manage and distribute products for a business so the company does not need to. Outsourced delivery can provide plenty of benefits and help businesses of all sizes overcome challenges.
Advantages
1. More time
The first advantage to outsourcing deliveries is the time that can be saved.
Outsourcing delivery services lets someone more experienced take care of your orders. What would likely take you hours to organize can be managed by them in much less time. Attempting to control something very meticulous without being a true expert can lead to many problems down the line.
Plus, getting rid of delivery management work as a whole frees up more of your time to focus on your strong points. If you’re the owner of a small business or the CEO of a major corporation, you’ve got more important work to do than micromanage parcel delivery. Hence, outsourcing allows you to spend time on more valuable tasks.
2. More profits
Is it cheaper to outsource your deliveries? The short answer is yes.
Although this all depends on which provider you work, most outsourcing options will be more affordable than if you managed it all on your own. This is because delivery couriers deliver at a higher scale and can lower prices by working with multiple customers. Hence, the price for each parcel ends up being cheaper when everything is completed in bulk.
Plus, third party delivery providers work with all the technology and tools required to make deliveries as efficient as possible. They have the means to optimize routes and deliver orders faster since they’re working with more drivers.
Overall, working with an outsourced delivery solution will help lower your overall delivery costs significantly. You’ll pay a fraction of the price when a larger company is taking care of deliveries for you.
3. Increased reliability
As mentioned before, we all have strengths. Focusing on yours is what’s best for your business. When it comes down to it, leaving delivery to the experts will have lasting benefits for your company.
The right delivery couriers have high rates of on-time deliveries. They know what has to be done to get deliveries to customers successfully, and they implement that into your business for you. When you manage deliveries on your own, you likely forget about some of the steps that should be taken in advance to make sure your parcels are delivered correctly and on time.
4. Reduced operating costs
Delivery requires a lot more than just drivers, and these additional roles can increase the amount you need to pay to run your own delivery in-house.
For example, an entire delivery operations team will require a manager, support experts, and handlers on top of the actual delivery drivers. All of these roles are crucial to the success of any delivery, and without any one of them, other team members will need to make up the work. Customers will call in and have questions, so if you don’t have a support team, who’s going to be able to help them?
These operating costs can rise quickly and at an unexpected rate. The more deliveries you complete, the more team members you need to make them happen. Outsourcing deliveries removes the need to have these team members and saves you plenty of money on manual labour.
Disadvantages
1. Less brand consistency
This is only a disadvantage if you’re working with certain providers. The right providers will help you keep brand awareness and consistency a top priority.
Brand consistency refers to delivering a unified message across all channels where customers see your business. This can be logos, slogans, content type, and many other things. Delivery is one channel where you should be pushing your brand and increasing awareness to give customers the best possible experience.
Pro tip: FlashBox offers custom branded tracking experiences for customers so your logo and brand name are present on the customer’s tracking link! This increases brand awareness and customer loyalty, helping you turn one-time buyers into loyal long-term customers.
When to Start Outsourcing Delivery Services
Outsourcing delivery services can feel like a big leap, but there are plenty of benefits waiting on the other side. Once you make the switch, you’ll be able to focus on the growth of your business without delivery worries holding you back.
So, is it time to start outsourcing your deliveries? Let’s find out.
When you can no longer keep up with order demands
If you have so many orders that you can’t keep up with your deliveries, it’s time to outsource.
Not being able to keep up with orders can appear as a sudden problem. This unexpected rise can suddenly have you feeling in above your head, and you surely can’t plan for it. Even if in-house deliveries are working for you initially, a fast rise in volume can be difficult to manage.
If you’re at the point where you can no longer get deliveries out the door fast enough, it’s time to find a third-party delivery provider who can take that workload away from you.
When your infrastructure does not support your growth
If you don’t have the infrastructure to support your delivery needs, it’s time to outsource.
Infrastructure needs can be different for everyone. In regard to delivery, it typically refers to the workers and capabilities you have to see deliveries through. If you’re finding that you can’t hire enough workers to complete the deliveries without spending well over your budget, you’ve reached the end of your ability.
Your operations team will be a major part of the success of your in-house deliveries. At the beginning, a few workers might be enough to keep everything in order and make sure customers are happy. But once they’re in over their heads with calls and don’t have time to follow up on deliveries, it’s time for bigger and better things.
When your deliveries are too expensive to manage
If your deliveries are costing you an arm and a leg, it’s time to outsource.
It’s a common myth that outsourcing deliveries is more expensive than managing them in house. But the truth is, the amount you pay for deliveries is directly related to your average monthly delivery volume. Hence, the more volume you have, the less you’ll pay per parcel with third-party delivery providers. Plus, the best partners offer flat-rate fees that will help you tremendously save money without compromising on quality.
If your in-house deliveries are costing too much, outsourcing them can be one way to cut down on costs. You can pay less for each delivery and end up taking more profit from each order.
Outsourcing With FlashBox
FlashBox same-day delivery is one great way to outsource your deliveries and save money at the same time.
FlashBox helps businesses save money by offering flat-rate prices as low as $6 per parcel, with no extra costs or hidden fees. This flat-rate price includes all parcel sizes, weights, and destinations, plus up to $100 of parcel insurance. This is much less than you’d need to pay for in-house deliveries, which is why businesses turn to us for assistance.
In addition to cost, FlashBox can save you and your customers thousands of hours when it comes to deliveries. We complete deliveries in less than 10 hours on average. Customers typically have to wait at least 3-5 days for deliveries from other major delivery providers, but FlashBox can help remove this wait time. Plus, merchants save plenty of time with our already-built integrations and APIs to place delivery orders right from your website.
Ready to start saving money and time? Talk to a delivery expert today to get started or set up your own account in just a few minutes.
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