Whether you manufacture foodstuffs, guitars, or heavy equipment, do you know who has the ability to tailor a distribution network to meet your small business logistics needs?
Unless you have a crystal ball, many small businesses learn the hard way through trial and error, including shipping and logistics.
But with a reasonable amount of research, you can reduce stress, control costs, and risks that could potentially harm your business and its reputation.
For instance, suppose there’s a mistake made somewhere along the supply chain, and a client receives the product much later than anticipated. Or maybe there was a miscalculation in regards to the cost, which then cuts your profit margins. Plus damage caused along the way in transportation is a very real possibility. This is where insurance coverage is a very good thing to have in place.
Small business logistics involving products requires careful consideration, and planning for contingencies. Having said that, let’s move on to exploring some helpful suggestions:
Consider a 3pl Service – Third Party Logistics
If you have the budget for it, you can hire an industry-specific third-party (3pl) logistics provider.
Depending on your specific products and market, you can find a company that specializes in the logistics of your particular category.
Being able to outsource, for the most part, the entirety of your logistical needs frees up your time to allow you to focus more on iterating and growing your business.
Depending on the size and nature of your business, 3pl may be your best and most simple option if the cost allows for saved time, convenience, and accelerated growth.
Partner up with someone
Networking with other small businesses who may be in the same situation and face some of the same budget restrictions has upsides.
By sharing costs and information gained through experience, you have a better chance of getting where you need to be.
Most logistics companies will set their prices based on volume. If your logistical needs are similar, teaming up with a partner could provide a more cost-effective solution.
This option does have its hurdles though and requires careful consideration.
You’ll need to take into account not only the specific details of the logistics company, but also the specific needs of your partner to make sure it’s an equitable arrangement for everyone.
Consider a small business logistics service through a major provider
Many major shipping and transportation providers offer services specifically designed to cater to small business logistical needs.
Compared to a specialized logistics provider, companies such as UPS, FedEx, and DSL have systems in place capable of reducing costs.
While their reputations for reliability and efficiencies may be attractive, it also comes at the cost of dealing with a smaller company that may be more nimble in addressing issues should problems come up.
If your business has certain critical needs or is in a unique category, you may find it advantageous to hire a specialized logistics provider.
Not to be confused entirely with the 3pl option, an industry-specific provider would know the specific details required on how to handle and care for your products being delivered.
For instance, consider businesses that produce and sell wine or perishable food products. It may be more beneficial for these types of particular companies to hire a logistics company that knows how to transport and care for temperature sensitive products.
With certain small business logistics, the nature of the business and its particular needs may mean spending more money on an industry-specific provider.
On the other hand, this type of expense should be baked into operating costs. Consider the risk of hiring a provider that does not specialize in your particular market – which could be far more costly when products are damaged or mishandled.
It’s important to weigh the pros and cons when considering a plan for your small business’ logistical needs.
Some providers may charge a higher price for their services, but that may offset the costs in a lower risk of mishandling or damage. It’s also important to consider the history and reliability of a company being considered.
There are a lot of factors in play, and its important to consider them all and understand your options in order to find the most efficient and cost-effective service for your business.