How to Optimize Your Small Business Delivery Services
July 15, 2020 7 min read
Growing demand for delivery may have you thinking it’s time to outsource your last-mile delivery process. But what if your team could deliver faster and more efficiently and handle greater capacity without giving up control over your customers’ experience? Route-optimization software has helped small businesses across the globe do all of these things and more.
The Delivery Challenges Small Businesses Face
When it comes to the local delivery challenges facing small businesses, we’ve learned a lot from working with more than 800 businesses all over the world. There is immense pressure on companies of all sizes to be able to compete with Amazon’s standard for two-day delivery and consumers’ rising expectations for convenience.
Shoppers expect retailers to offer delivery, and if those customers aren’t able to get their orders fast enough (or at a price that they find reasonable), many customers will go somewhere else. According to a study conducted by the National Retail Foundation, 90% of consumers say convenience impacts their decision when selecting retailers, and 97% of consumers reported that they had abandoned a purchase because they felt it was inconvenient.
Living up to these high standards can seem daunting. Small businesses run the risk of digging themselves into a hole to catch up, especially if they’re planning routes manually or using third-party delivery services. Manual planning takes a lot of time, and this inefficiency makes it very difficult to scale a business when orders pick up. Fuel costs, wear-and-tear on delivery vehicles, and customers not being home when drivers attempt to drop off a product can all increase delivery-related expenses. It’s a lot to manage.
The 3 Delivery Options Small Businesses Have
If you’re a small business struggling to keep up with delivery demand, you may have considered the following two delivery options, but outsourcing your deliveries comes with risks. It’s important to consider all of these factors before choosing one of these options, because your small business could pay a steep price in the long term.
1. Hire a third-party delivery service
Dylan Bolden, managing director and senior partner for Boston Consulting Group in Dallas, shared a key concern about third-party delivery services with CNBC. According to Bolden, “The risks are – if you’re a brand thinking about delivery – how can you control that experience if you’re using a third party.”
When you outsource deliveries to a third-party service, you lose access to one of your most valuable resources: customer data and the insights that you could take from it to develop better products or tailor your services to drive more small business sales. If you don’t understand your customers, it’s nearly impossible to know what they want and deliver on those desires to keep them coming back.
You also lose your ability to ensure shipping accuracy in that all-important last mile. A 2019 poll showed that 84% of shoppers wouldn’t shop with a brand again if they had an unpleasant experience the previous time, so this is a critical point of control over the customer experience.
You run into another set of concerns if you have specialized business needs, such as products that must be delivered under a specific set of parameters. For example, let’s say you’re a grocery store, and you have customers ordering milk or frozen foods that need to be kept at a specific temperature. If your third-party delivery service doesn’t have a refrigerated truck, your products could spoil before they make it to customers. You’ll have to deal with returns, exchanges, potentially bad reviews, and even lost customers.
Third-party delivery services aren’t cost-effective, either, and they often favor large chains over startups, small businesses, and restaurants. On-call delivery companies such as Postmates and Uber Eats charge up to 30% in commission fees. Uber Eats does offer lower commission structures for certain partners, but only to larger chains with multiple locations (i.e., not small businesses).
2. Hire a third-party shipping service
Hiring a third-party courier service comes with another set of cost concerns. UPS, FedEx, and USPS are shipping methods that each have their own package restrictions. Oddly shaped, oversized, or overweight parcels often incur additional fees, so your shipping costs may be high if you choose this route.
The cost of shipping with a third-party service is also partially dependent on how cost-efficiently you pack your products for shipment. If your packaging costs are high, then your shipping costs are likely to be high as well.
Whether you’re making daily trips to the post office or dropping packages in a FedEx drop box, getting your products into the hands of a courier adds a step to the delivery process. Adding another step can set the delivery date to your customers back, which is likely to have a negative impact on your customers’ experience.
No matter what type of third-party delivery service partner you choose, you need to ask yourself a few courier management questions:
- Are you confident that your chosen courier will deliver a great customer experience?
- If you offer fragile products, do you trust that your courier will transport those products safely so they arrive in one piece?
- Is outsourcing your delivery process worth missing out on customer data?
If you answer no to any of these questions, outsourcing deliveries to a third party shipping/delivery business is probably not the best choice for your business.
3. Optimize Your Own Delivery
Fortunately, there is another solution. You can optimize your small business‘s in-house delivery process using the same trucks, vans, and drivers you do now by using route-optimization software. OptimoRoute has helped hundreds of businesses streamline their package-delivery process, increase revenue, speed up delivery times, scale efficiently, and maintain control over their customer experience. Our support team is available to help you get up and running as quickly as possible, too.
OptimoRoute takes your current delivery system and streamlines it for efficiency. In a matter of seconds, OptimoRoute will be able to calculate the most efficient delivery routes for hundreds of orders, factoring in multiple driver and vehicle constraints, up to five full weeks in advance. Our route-optimization software makes planning an average of eight times faster, giving logistics and fleet managers more time to focus on strategy.
Our flexible pricing structure allows you to scale up or down based on demand as well. Companies like The Little Posey Co. that see a drastic increase in order volume around particular holidays use this feature to adjust their plan based on demand. The Little Posey Co. delivers floral arrangements and needs to triple their delivery fleet around Valentine’s Day, which is their busiest day of the year.
Take your customer experience to the next level
At the core of every business is the customer. Whether you’re an e-commerce business selling products, offering local services, or just experiences, the success of your business hinges on achieving a high level of customer satisfaction. OptimoRoute enables small businesses to reach new heights when it comes to customer experience. Not only can route optimization software increase on-time deliveries and reduce operational costs, but it gives businesses the ability to go the extra mile — in whatever way they choose.
Just look at Evolution RX, an independent pharmacy that offers free delivery to their customer base in Texas. According to a 2019 study done by the National Retail Federation, 75% of consumers expect free delivery, even on orders under $50. This figure shot up 68% between 2018 and 2019. Evolution RX harnesses the power of efficient route planning to give customers what they want, thus boosting customer satisfaction, loyalty, and positive reviews.
Another way OptimoRoute helps small businesses deliver an elite customer experience is with live tracking. In a survey of 2,000 consumers conducted by C + R Research, 36% of American online shoppers reported having a package stolen. Package theft is upsetting for consumers and can be costly for businesses, so it’s important to choose a delivery process that minimizes this risk. OptimoRoute helps mitigate this risk and ensure that customers are home for deliveries by providing live tracking and accurate ETAs, so customers know exactly when to expect deliveries.
Set up Delivery Route Optimization in 6 Steps
Getting started with OptimoRoute and increasing your delivery process efficiency is easy. Below, you will find a step-by-step guide to planning deliveries with OptimoRoute.
- Upload orders into OptimoRoute from an Excel spreadsheet or other source.
- Input constraints for vehicles and delivery drivers. These parameters can be saved to streamline the process in the future.
- Decide how you want OptimoRoute to balance delivery schedules. You can optimize routes for the lowest cost or choose to balance orders evenly across drivers, depending on your unique priorities.
- Click “Plan Route,” and let OptimoRoute calculate the optimal routes for your drivers in seconds. You can plan routes up to five weeks in advance and then update them as needed to accommodate new orders or adjustments.
- On the day of deliveries, send the route/delivery schedule to your drivers. OptimoRoute enables you to send specific routing directions to an app on drivers’ phones. Need to make adjustments while your drivers are en route? No problem! Dynamic replanning allows you to make changes as needed at any point in the process.
- Text or email customers a tracking link with real-time order updates so they’ll know exactly when their delivery will arrive.
Route optimization software allows you to harness the full potential of your current drivers, vehicles, and delivery system.
Route Optimization Means More Resources
As a small-business owner, you face plenty of challenges. Don’t let a missed opportunity be one of them. You can get more of the resources that matter most — revenue and time — by incorporating route-optimization software into your existing delivery-planning process. You could use those resources to develop new products, expand your delivery territory, or simply pass the savings on to your customers. The choice is yours.
Try OptimoRoute today
Looking for the cheapest way to ship large packages? Or maybe the most efficient way to deliver small/medium sized deliveries? Whatever the delivery need, OptimoRoute can help!
Want to see how OptimoRoute can help your business? Get started with a 30-day free trial today. Our customer support team is here to help you get started and walk you through adjusting settings to best suit the demands of your unique business.
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