Product Delivery Strategy

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You can make the best product in the world, but if you don't have a delivery strategy for getting it to your customers, you'll end up with a fully stocked warehouse and no incoming revenue. Product delivery should be thoughtfully planned and executed and should fit into your company's overall mission and marketing strategy.

TL;DR (Too Long; Didn't Read)

A product delivery strategy is an approach to getting finished products into your customers' hands.

Product Delivery Strategies

  • Self-delivery: If your business has the resources and infrastructure, you can get your products to your customers yourself. This strategy will require a vehicle or a fleet of vehicles and a client base reasonably close to home so you don't have to deliver too far afield.

  • Third-party delivery: If you don't have the vehicles or the local customer base necessary to self-deliver, you can contract with a third-party freight company to make your deliveries for you. Be sure to include the added cost in your pricing structure, either as part of your price or as a separate invoice item. Using this model, you still make the sale directly to the customer; you just have it delivered by someone else.

  • Distributors: When you sell through a distributor, an intermediate business takes responsibility for both sales and delivery. This third party handles customer orders and fulfillment logistics. However, your business still has to have a delivery strategy for getting your product to the distributor. You might make and deliver products in a short and time-sensitive window after customer orders have been placed, or the distributor may order and hold your products as inventory.

Online Product Delivery Strategy

If you sell products online, your product delivery strategy will depend on what you sell and whether you make it yourself or buy it from another business. To get your own products to customers who order them via your website, you can either self-deliver or use a third-party service such as UPS, FedEx or regular mail. Be sure to set realistic expectations about when your customers can expect to receive their orders.

If you sell products that you procure from another business, you can either keep inventory on hand or you can set up a drop-shipping arrangement with your suppliers. Keeping inventory ties up financial resources and precious shelf space, but this approach gives you extra control over when your customers will receive their orders. Drop-shipping arrangements allow you to simply forward your orders to your suppliers, who fulfill them directly. You don't need to be involved in shipping logistics, although you are still accountable if the order isn't received as expected.

Perishable Product Delivery Strategy

If the products you provide to your customers are perishable, your delivery strategy will require an extra layer of logistics to fulfill orders while products are still fresh, and you must also handle the items you sell under the right conditions so they hold up well. If you offer bread that should be eaten the day it is made, you'll need to bake early in the morning and then send your loaves out for delivery as soon as possible. You won't need extra infrastructure such as refrigeration, but your delivery schedule will be extremely time sensitive.

If you provide refrigerated or frozen products, you'll need to keep them sufficiently chilled while they are en route. You will also need to make sure that your customers can receive them in a timely fashion and store them properly once they are received. Use coolers or mechanical refrigeration during delivery. Mark packages to inform customers of their perishability and make arrangements in advance if necessary, like communicating with customers to make sure they will be home to receive their orders.

Customer Service and Delivery Strategy

When you're working to get your products into customers' hands, customer service is a matter of making sure that your clients get what they need when they need it. Your ordering platform should be smooth enough for you to get the information you need about customer orders in a timely fashion, and your systems for processing and packing orders should be efficient and accurate. This includes communicating within your operation about special needs and special orders and not promising more than you can deliver.

Customer service for product delivery also includes keeping customers informed about when to expect their orders and following up when something does not arrive on schedule or when someone receives the wrong order. Although managing mistakes can feel like a frustrating and tedious part of a delivery strategy, your company can be redeemed in customers' eyes if you go the extra mile to correct mishaps. In fact, if you show that you are genuinely concerned and invested in correcting mistakes, you may even create a more favorable impression than if the mistake had not occurred at all.

Inventory and Delivery Strategy

There is a fine line between too much inventory and not enough inventory. If you have too much, you may end up with product that you can't sell taking up precious storage space. If you have too little, you run the risk of not being able to deliver what customers need when they need it. A product delivery strategy should include an answer to the question of whether your business would rather err on the side of keeping your warehouse amply stocked or on the side of running inventory low before replenishing.

A lean inventory strategy relies on low levels of back stock and nimble systems for replenishing if these levels become too low. These replenishment systems include sophisticated communication to convey information about what customers have ordered and what parts or products need to be acquired. Such a system is also partial to vendors who can deliver goods quickly because this reduces the risk of running out and being unable to fill orders.

A robust inventory strategy relies on keeping plenty of product on hand to fill orders. While it may seem like an obvious call to maintain satisfactory inventory levels, especially if your products are not perishable, this strategy presents the risk of having your cash tied up in parts and products that sit on your shelves for months when you may need this capital for more pressing matters, such as rent and payroll.

Delivery Strategy and Risk Management

An effective delivery strategy handles the risk management process by developing systems, backup systems for the systems and backup systems for the backup systems. Start by identifying all of the things that could go wrong, such as a product not being ready on time or issues with transportation, such as vehicle breakdowns and missed connections en route. Next, map out a variety of contingency plans that can help you to address each potential difficulty, including alternate procurement options and delivery strategies.

You may never need to use these backup plans. However, if you have them in place, you'll increase the odds of weathering difficult situations gracefully and turning customers into repeat buyers. There are only so many variables that you will be able to fully predict, but if you have a solid understanding of what you can't foresee with adequate certainty, you'll increase the odds of having a protocol in place to field the inevitable mishaps that can cost you money and customers.

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.