To Outsource. Or not to Outsource
by Nicoletta Moss
Over this question, countless companies around the world are continually puzzling. This is a decision most businesses will face as soon as they want to distribute their products beyond a traditional shopfront. The question got even more relevant during the pandemic, as home deliveries were the only way to survive the lock-down. But is there a right answer to this question? As it is in so many cases, the answer is “it depends”. Let us have a structured view of the different factors.
End-to-End Experience: Naturally, most businesses are very protective of their customers. They want to make sure that the whole process is top-notch. They don’t trust standard courier companies to do it as perfect as you might have it in mind (we all have received the information that a package will be dropped off at some point between 7 am and 10 pm).
On top of that, don’t you dare to leave the house for five minutes, as you can be very sure that right at that point the courier will leave a note in your letterbox saying that he will come back another time.
Linked to this argument is the branding: imagine your delivery vans zooming through the city, busy dropping off orders to your customers. Driving billboards which pop-up just anywhere in the city wherever your customers happen to be. And look at the delivery personnel in their smart uniforms paired with perfect manners and a smile on their faces.
Ok – that was nice imagining it? Wasn’t it? You could see it right in front of your eyes. Unfortunately, it is time to get back to reality. What it comes down to at the end is the scale of the business. Keeping a fleet up with drivers, optimizing routes, packing vans in the right order, and keeping your customers informed about delivery times is not an easy task. And it does not come cheap either. In-house deliveries are mostly accounted for as an overhead cost. It might come less expensive at scale, but certainly not at low volumes, where the delivery fleet is not used up to its optimum.
Apart from the cost of investing in a fleet and operations team, it is also a completely new area where the company has to become an expert. It is already hard enough to shine and perfect their core competence. For this reason, it has been the best practice for a long time to outsource commodity services to experts who know how to deal with the nightmare of last-mile delivery optimizations.
To sum it up: if your business has spare capacities and enough deliveries to keep a fleet more then busy you might be better off to organize your delivery service. But if you have already enough on your plate, you might want to look for some third-party support. Nowadays, you will find in most cities countless delivery companies, which are supported by sophisticated technologies paired with smart uniforms, perfect manners, and a smile in their faces.