Your Business With James Caan 2017 - 289

LOGISTICS

G

etting your first order as a new
business is exciting, but it can all
go quickly wrong if you haven't put
enough thought into getting the
product to your customer without
compromising on your profit. Logistics
is one area where small businesses
often struggle to compete with bigger
companies, who deal in such large
numbers that they can push down the
costs. They are then able to pass these
savings on to their customers, giving
them a competitive edge
One way around this is for startups and SMEs to outsource some or
all of their supply chain. Logistics
providers combine your needs
with those of other companies to
keep costs down. It may be worth
looking for those who specialise in
smaller businesses, though, so you
don't get lost in the system while
the bigger customers get priority.

STEP BY STEP

If you decide to keep some or all of
your company's logistics in-house, you
need to consider the three parts of the
supply chain: supply, storage and
distribution. Each is crucial to your

Outsourced warehousing
is an option for start-ups
company's success, and it's important
to think about what you need in place.
Your suppliers are the first cog in the
wheel. Make sure you have written
agreements on the level of service you
expect, including an agreed lead time
from order to delivery, which will help
you with supply planning.
And remember, you don't have to
stick to just one supplier. In fact, if you
have multiple suppliers there will be
less of an impact if one lets you down.

SAFE KEEPING

Once your supplier has delivered the
goods, you need to store them. As a
start-up, you may not have substantial
funds for storage, so outsourced
warehousing could be the answer.
Flexible storage options allow you
to have just a few shelves in a big
warehouse, which will cut down on
budget, but make sure you still have
all the facilities you need.
Whether you need a small storeroom
or a full-sized warehouse, decide on
the right level of security and whether

you need climate control. A warehouse
management system that is integrated
with order management may be pricy,
but it will help you monitor inventory.

SEND IT OUT

When it comes to sending goods to
your customers, keeping packaging
sizes standard - whether you're using
pallets, boxes or padded bags - will
reduce costs. And while customers will
always prefer free standard delivery,
you should set a minimum order value
and charge extra for next-day delivery.
If your product is something your
customers need right away, you will
need to charge for immediate delivery.
On the other hand, if your customers'
main priority is keeping the price
down, offer free delivery with a longer
lead time. This will allow you to hold a
smaller inventory and order from your
supplier as necessary.
Always consider your customer's
priorities. Good delivery and customer
service will build trust and help to
ensure you get repeat custom.

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