Your product is going to change the world, that’s clear. Even if it doesn’t, it’s going to change yours in ways you never imagined. Congratulations, this is it! You’ve got your seed money, your website is up and running and you’re even seeing your very first orders beginning to trickle in – your start-up business is, well, starting up. Which begs the question… how are you actually going to get your product out of your warehouse or your factory or even your spare bedroom and put it into the hands of your eager new customers?
Logistics. Yes, it may sound boring, compared to some of the other more glamorous parts of setting up a new business but a business without efficient logistics solutions in place is a business that will struggle. But at the same time, logistics is more than simply delivering your awesome new product into the grateful hands of your customers. For a start, how did you manufacture your product?
Whether your business is a tiny home brew operation or you have already expanded out into a factory or workshop to complete your orders, those raw materials need to be delivered. There is no business on earth so self-sufficient that it receives no deliveries at all! So how does that raw material arrive and how do those machine parts get delivered? Logistics.
Hopefully you are beginning to see the importance of effective logistics to your start-up business. It is the stream by which your raw materials arrive, it is the medium by which you deliver to your customers. Without the materials, you can’t make the product which means you have no business. Without reliable deliveries to your customers, you can’t deliver your product to your customers so that you can turn a profit – which means, again, that you don’t have a business. This is why it is important for you to develop independent logistics solutions that work specifically for your business. The right options for you will depend on the types of items you need shipped, how often, and where. If you primarily receive large deliveries from a few supplier or ship your products to wholesale customers, the best option will be different that if you sell to many individual customers through your website, for example.
The first step to thinking about the logistics for your new start-up is to start thinking like a customer. When you order something online, what do you want? You want it to be delivered as quickly as possible, as cheaply as possible. So now you know what your customers want, it’s easy right? Wrong. Because now you need to look at it from the point of view of a business owner. The words “quickly” and “cheap” strike fear into the heart of any small business owner.
Just go to the post office to see this in action – a second class stamp will set you back 56p, but it will take a few days to arrive. Next day 9am guaranteed delivery will set you back £26.46. So how do you avoid that? Your logistics solution lies in effective planning. It is in knowing what your customers want before they want it. It is having sufficient stock in place to manufacture enough of an order that even if you exhaust your raw materials before the next batch delivers you have enough to carry on producing.
It about forward planning. How long will it take to fulfil an order, what knock on does that have to delivery times and the shipping methods left open to you? And finally, it is about managing expectations. Amazon is a master at this – the company offers free delivery with a long lead in time, and expedited delivery – but for an added cost.
The golden rule for logistics for start-ups is to get the product into the hands of the customer quickly for the minimum price. Find the balance between those polar opposites, and your start-up business will take a big step toward survival.