5 Essential Logistics Tips For Small Business Owners
Business logistics refers to the process of getting goods from a supplier and delivering them to your customers. Indeed, it provides many benefits worth considering. It helps you improve your customer retention rate by enhancing swift and effective shipment or delivery of goods and services. Likewise, good business logistics strategies can help you cut overhead costs while improving cash flow and net profit. It’s no wonder that US businesses spent approximately $1.63 trillion on logistics in 2019. Also, approximately 5.95 trillion ton-miles of cargo will move across the US in 2025. If you want to stay on top of your business logistics, here are some useful tips you can leverage for the best results.
Have a plan
Understandably, you want to implement your business logistics strategies. The main objective of every logistics is to deliver the right products to your customers on time and without significant costs. Fortunately, you can determine the service level your company is most efficient at with a feasible strategy. This way, you can satisfy your customers’ needs and boost cost-efficiency, making it a win-win situation. However, it’s prudent to have a plan before taking any step. With a logistics plan, you can easily recognize changes and implement suitable strategies to adapt to them and minimize risks. That said, you want to develop a logistics plan if you haven’t already. Fortunately, you can leverage these planning tips to get the best results.
Don’t neglect what your customers want
It’s not unusual for business owners to focus on cost control in every business operation, and logistics is no exception. However, you also don’t want to neglect your customers in your bid to reduce costs. A Supply & Demand Chain Executive statistics indicated that US customers returned goods worth $428 billion in 2020. Another survey by ComScore and UPS revealed that 44% of consumers abandoned their carts due to undesirable estimated delivery times. These staggering figures reiterate the need to consider your clients in your logistics plan. Fortunately, you can achieve this in many ways.
You can begin by ensuring that you deliver their goods on time, as delayed delivery can cause your clients to lose confidence in you. Also, you want to be sure that you are delivering to the right address to avoid the risk of your clients not getting their goods. Another way to please your customers is to get their package in good condition. Admittedly, accidents can happen, and your clients may not get what they paid for. In that case, make the return process easy, as it’s also important for their satisfaction.
Invest in supply chain visibility (SCV)
Irrespective of your strategy’s success, your logistics may not be effective without supply chain visibility. Visibility refers to tracking goods from the supplier to the consumers. The goal of SCV is to ensure that data is available to the supply, consumer, and yourself regarding the movement of goods. This helps to strengthen and improve the supply chain. Moreover, it enables you to develop better collaboration with your suppliers while aiding top-notch quality control.
Additionally, you can optimize your shipping process by identifying and cutting separate distribution channels to improve efficiency. It’s also a great way to effectively monitor costs and maintain stock control, improving cash flow. Despite these benefits, Zippa statistics indicated that only 6% of companies have full visibility while 69% don’t have total visibility.
Fortunately, you can be among the 6% with the right steps. You want to be fully aware of your supply chain operations to identify gaps and pain points, for starters. For instance, you may discover that you have avoidable operating costs or your customers aren’t satisfied. The next step is to develop solutions to address these pitfalls. Consequently, ensure that you automate the process to reduce errors.
Track your costs
Your logistics costs refer to all expenses you incur when packaging, storing and transporting goods. Although costs are inevitable for logistics, failure to track them may mean spending more than you intended. Moreover, you risk experiencing errors that can undermine the use of your business resources. Therefore, it is expedient to determine your logistics costs and devise strategies to improve them. You can begin by seeking information on how much your logistics providers charge you to help you determine how much you’re spending.
It’s easier to create dashboards and reports to highlight your logistics costs, so keep this in mind. While it’s not uncommon for business owners to settle for the first quotes due to their busy schedules, it may not be the best practice. As a tip, ensure that you get many quotes from competing logistics companies to get the best prices. You can also renegotiate your logistics contracts and agreements to eliminate discrepancies.
Work with third-party logistics agencies (3PL)
Although you can stay on top of your business logistics, you may need extra help from professionals. Third-party logistics agencies offer eCommerce warehouse, packaging, order fulfillment, and transportation solutions. Many business owners perceive these agencies as expensive, but it isn’t always the case. Moreover, they offer immense benefits worth considering. For starters, they can help you identify and address pain points in your supply chain. What’s more, you can save more by partnering with them, as they have the experience of negotiating better prices. Additionally, you can focus on your business’s core competencies, knowing that your logistics processes are in capable hands.
Despite their benefits, you don’t want to choose a 3PL at face value. It’s important to thoroughly research to select a company with suitable resources, tested processes, and the capacity to integrate with your systems. Also, ensure that you’re working with agencies with extensive locations and networks to help you figure out the best distribution centers for your business. Consequently, seek reviews from third-party sites to ensure that you’re entrusting your logistics processes to the right people. To get the best value for your money, you’ll find it beneficial to work with 3PLs with a broad range of services.