Startups often face various logistic challenges that come from a lack of knowledge, funds, or employees. At the same time, many businesses can’t scale, even with money, a delivery team, and sufficient marketing. Thankfully, a great logistics strategy can solve delivery woes.
What Makes up a Logistics Strategy?A logistic strategy contains 6 major components, all of which involve acquiring the resources, capital, storage, and conditions you’ll need to deliver products successfully to their destination.
The 6 components of a logistic strategy include:
To make sure you tackle your delivery challenges, you need to make sure your logistic strategy tackles all of these 6 components. If your company falters on one of the major components, there’s a higher likelihood you’ll deliver late or not keep a well-stocked warehouse.
Why is a Logistics Strategy Important?Your customers expect you to deliver products and services to them quickly because that precedent has been set by other retailers. Opting for a same-day delivery service isn’t just a “nice thing to do” for your customers; it’s necessary if you want to stay competitive in your niche.
There’s no point in spending a lot of time, money, and resources on developing your products if they can’t reach the customer on time. However, if you’re able to purchase your raw materials, store them, create your products and deliver them quickly, you’ll simply make more money.
What Delivery Challenges do Startups Face?There are a total of 8 logistics and delivery challenges startups face, and these problems don’t start when the products are in the truck, ready to be delivered. They start at the sourcing stage.
- Startups Have Issues Sourcing Products
- Startups Have Issues Managing Inventory
- Startups Have Issues Managing Their Warehouses
- Startups Have Issues Fulfilling Error-Free Orders
- Startups Have Issues Delivery Product on Time
- Startups Have Issues Managing International Shipments
- Startups Have Issues Managing Return Orders
- Startups Have Issues Offering Customer Service
Whether you’re a dropshipper or a manufacturer, startups often bottleneck at the beginning of their logistics strategy. It’s a mistake to rely on one source for your products. Instead, coordinate with multiple sources on one inventory system so you’re organized and stay well-stocked.
Startups that have a poor inventory system may order too much or too little stock. Both are disastrous for any company, as they’ll suffer a financial loss either way. Effective inventory management can ensure that your business becomes profitable as quickly as possible.
Most startups start storing their products at their house or in a small office, but as their business grows, they may lose customers due to lack of space. They also may not have the funds to pay for a larger space. Startups must partner with providers who can store and watch their inventory.
Order fulfillment includes managing, picking, packing, and shipping the products. Startups need skilled employees to ensure these operations are performed error-free. They also shouldn’t compromise on packing materials to save money. Make a bulk purchase for materials instead.
Whether the startup doesn’t have enough delivery options or they don’t have the technology to properly prepare their routes, late delivery will start eating into their profits. Startups may have to limit their same-day shipping options and plan routes accordingly to keep up with demand.
Delivery has the biggest impact on customer service, but even if you manage to deliver local products on time, you may still struggle on the international front. You have two choices: stop shipping internationally (for now) or partner with multiple couriers with a good track record.
Most startups have a return policy, but they can reduce returns by making sure the rest of their logistic strategy is well-executed. Still, returns will happen, so it’s essential to define what constitutes a return, who will pay for shipping, and what depart will handle returned products.
Startups sometimes lack customer service or partner with companies that don’t know how to address customer queries. To stay competitive, you’ll need to hire and/or train your staff members. Your team members should be able to speak kindly to your customers at all times.