Let’s talk about physical product logistics (oh, joy, right?).
In the Home Decor Product Business Article Series, we cover how to launch, grow, and expand your physical products business. We have covered different ways to launch your product, different methods for launching a product line, how to sell, how to market, and so on. Now, we need to talk about logistics.
- Why is logistics the backbone of your product business?
- What kind of options are available for small businesses?
- How can you run effective business operations with minimal stress?
- How do you choose the right logistics solution for your business?
Let’s dive in!
First, what is physical product business logistics?
Logistics is a part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the point of consumption according to the needs of customers. – Wikipedia
Why is logistics the backbone of your product business?
Physical product business logistics can have a huge impact on your business’s success, from cost-effectiveness to customer satisfaction. A properly planned and executed physical product business logistics strategy can help you ensure that your products are delivered on time, with minimal damage or disruption along the way.
One of the major factors for business success, particularly when you have physical goods, is the capability to streamline product deliveries at all points. You need to be able to get the products from your manufacturer to your warehouse and further to your customers. This simple-sounding transaction needs to be seamless, fast, and preferably, not too expensive.
However, how simple it seems, setting up this simple chain of logistics is a major consideration and oftentimes, not so easy.
Your logistics also need to take care of returns. When you sell products, regardless of if you sell to companies or consumers, there will always be a certain percentage of returns.
Well-functioning logistic functions will enable you to maintain high levels of customer satisfaction while keeping costs down by streamlining processes such as order fulfillment and inventory management. It includes a number of activities such as inventory management, transportation, warehousing, and information technology.
Set up incorrectly, logistics can be painful and expensive, causing your business lots of unnecessary headaches. Or, taking way too much time from your key business objective, which should be selling and marketing your products, not shipping them to your customers.
How to choose the right logistics partner for your business
As you might have figured out by now, logistics is something you cannot do by yourself, you need partners who specialize in moving and storing goods, so you can focus on your core activities. Logistics solutions for physical products come in a variety of forms and can be tailored to the specific needs of any business.
From warehousing services to order fulfillment, freight forwarding, and even last-mile delivery systems, there are many different types of logistics options available that can help businesses with the efficient storage, handling, and delivery of their goods. Knowing which type of solution is the right one for your needs is key to ensuring a seamless customer experience.
Which types of players are involved in the logistics?
You can choose multiple different options for moving your goods. Typically, you can choose between having one company that handles all logistic needs, or several companies that specialize in different types of logistics.
Land, sea, air freight – what is the best method for you?
One consideration is what kind of method will you use to move your goods.
Land freight is the transportation of goods by land, typically via trucks, trains, and other vehicles. It is one of the oldest methods of transporting goods and is still used today for a variety of purposes.
The advantages of land freight include cost-effectiveness, reliability, flexibility, and scalability. Land freight can be used to transport a variety of items from raw materials to finished products across short or long distances. Land transportation is quite fast, trucks are often moving overnight, so if you manufacture and sell locally, this is your best option.
It is also a more environmentally friendly option than air or sea freight due to its lower emissions.
Sea freight is the transportation of goods and commodities by sea, typically via container ships or bulk carriers. It is an important part of global trade and has been used for centuries to transport goods across long distances.
Sea freight is often a cost-effective way to move large quantities of goods, as it allows companies to maximize their cargo capacity and minimize costs associated with fuel and other transportation services.
Sea freight also offers greater flexibility in terms of routing, port selection, and delivery times.
Sea freight is slow. It’s relatively easy when you have the right partners who guide you through the process and documentation required, but this method takes time.
Air freight is a type of transportation that involves the use of aircraft to move goods from one place to another. It is often used for international shipments, as it provides faster delivery times than other methods.
Air freight has become increasingly popular in recent years due to its cost-effectiveness and convenience. Companies can save time and money by using air freight services, as they can deliver goods quickly and reliably.
Air freight also offers flexibility in terms of size and weight limitations, allowing companies to transport large or heavy items with ease. However, air freight is not cheap, and this should be your choice only if land freight is not a possibility, such as for overseas deliveries.
The combination is the best
Sometimes you need to get your products, or at least parts of your production, to your warehouse or office fast. In that case, air freight is recommended. I always recommend my clients have several options for physical product business logistics.
When we launched new collections for each Spring / Summer / Fall / Winter season, we shipped a few boxes of the manufactured goods fast to our door so we could further send them to our customers who have placed orders in our e-commerce store or at tradeshows, and the rest of the production was shipped with sea freight which took anywhere between 2-4 months to land in Europe and in our warehouse.
A freight forwarder is a company that gets your goods from point A to point B. Even if your products move across different methods, such as from sea to land, and air, the freight forwarder will manage this for you. Freight forwarders make sure your boxes move at the harbors and to your destination.
When you see large cargo ships out at the sea, they are usually filled with containers owned by large forwarders. This method might seem intimidating, particularly when you are getting started, but with the right partner, it will work out perfectly.
Remember – your logistics partners do this every day, for small and big companies, so you can rest assured that they know what they are doing and how things work, even if you don’t!
3PL logistics provider
A 3PL logistics provider is a company that provides third-party services to businesses in the supply chain and logistics industry. These services include warehousing, also freight forwarding, inventory management, order fulfillment, and more. They can unpack and pack your products, control quality, and even take care of customer service, helping businesses save time and money.
By outsourcing these tasks to a 3PL provider, businesses can focus on the key aspects of their business such as product development, sales, and marketing.
The biggest difference between freight forwarding companies and 3PL companies
The biggest difference usually comes down to the level of service and what kind of specific needs you have. 3PL companies offer more customization and a wide range of services, and they can ship your products to consumers who purchase through your e-commerce store, whereas forwarders usually only operate between your manufacturer and your warehouse.
Systemize your physical products delivery process
Systemization of the delivery of your physical products is an important step in ensuring a successful business. There are many ways to get your product to the customer quickly and efficiently, but it is also important to consider the costs associated with each option.
By taking into account factors such as time and cost, you can optimize your delivery process and make sure that the customer receives their items as quickly and effectively as possible.
Effective strategies include utilizing efficient shipping methods, and technology-based solutions, communicating with customers regularly, optimizing packing materials, and exploring alternative delivery options.
Here are some of the systems that you need to consider
Sales system integration with the inventory management system. This means that your sales cart, for example, if you sell e-commerce products, is directly integrated with your warehouse, often a 3PL provider’s inventory system. So when selecting a 3PL partner, ask them whether they already have the required integrations in place, or if you need to pay extra for those.
Logistics system integration with sales system, particularly if you take care of shipping your products by yourself, or if your team operates your own warehouse. You need to have a system that prints shipping labels and books collection automatically.
Marketing system integration with sales and logistics system. You want to get a message back to your marketing system that your customer has received the goods, so you can segment them into your continuity marketing messaging.
Last but not least, you need to integrate your accounting system with your sales and inventory system to get accurate data by automation, and can handle your accounting and business planning accordingly.