On-demand delivery has taken the world by storm. What used to be a fantasy in older science fiction movies is now a reality that in which most people live. With nearly 9 billion parcels delivered every day, it is safe to say that on-demand delivery has grown bigger than most anticipated, with much more room for innovation. But now that customers have become, well, accustomed, to on-demand delivery, smaller businesses have to embody a more efficient warehousing model. In other words, it is time for companies to move from on-demand delivery to on-demand warehousing.
But since this’s still a relatively new model, not many are quite aware of it. So, before we jump into what on-demand delivery is, let’s first answer the question, what is on-demand delivery? And what is on-demand warehousing?
Models of the Future
On-Demand delivery and on-demand warehousing are two necessities of the current market. With larger companies following the industry trend of instant gratification, going against that norm will only result in your downfall. And while on-demand delivery can certainly be a high expense, on-demand warehousing will certainly save you some much-needed cost. Therefore, before you can go about adapting to this service, you will first have to understand what they mean and how they operate.
What Is On-Demand Delivery?
On-demand delivery, as the name implies, is a delivery model built on instant gratification. With music, games, movies, and videos only a click or tap away, instant gratification is a significant part of everyone’s lifestyle. On-demand delivery supports that craving, buy delivering goods and services within the same day, or even the same hour.
This is a major logistical feat, one that global logistics firms cannot do by themselves. Major logistics firms deliver goods in batches along with a variety of other orders. On the other hand, instant delivery gives priority to each individual and personally delivers their package. And with the option to receive what you are ordering in a matter of hours, the E-commerce industry has shifted substantially to this delivery model. And with that, companies now no longer compete for just customers but also the couriers in a city. As the one with the most couriers will have the best instant delivery service. A perfect example of an on-demand courier company is DHL.
What Is On-Demand Warehousing?
Much like on-demand delivery, on-demand warehousing also relies on instant gratification, but this time for businesses. A place where businesses stock their goods is called a warehouse. And these can be quite expensive, especially when you are doing it on a much smaller scale. But since they are almost essential, smaller companies have no choice other than to live with that expense – until now.
On-demand warehousing is essentially an online marketplace where people (smaller businesses) can access shared warehousing and logistics. This means that they don’t have to rent entire warehouses, and can instead share one with a company that has extra space. This saves both time and money for smaller companies. And can also reduce the number of products that go to waste.
Much like how housing websites meet lenders with tenants or buyers, on-demand warehousing meets companies with excess space with smaller companies that could use it. On-demand warehousing offers smaller companies an alternative to ordinary warehouses, in a market with uncertain demand and constrained budgets.
On-demand warehousing, combined with on-demand delivery, makes for an excellent customer experience that has now become an industry standard. Implementing these models within your business is not just effective for you, but it is also how you show you care about your customers. Now you may be wondering why you (as a small business) should invest in something like on-demand delivery and warehousing.
Why Should You Invest in On-Demand Warehousing/Delivery?
Investing in both of these models may seem pretty useless seeing how you are just a small business, and doing pretty well for now. Well, if anything, the reason why should do invest in on-demand delivery is because of competition. Competition is fierce in the E-Commerce industry, as you have to face off against the giant Amazon. However, with nearly every retailer making their way to the internet to sell their goods, more competitors are entering at an unprecedented rate.
Moreover, with every major retailer now already using this model, it has become an expectation from customers. If anything, customers expect their, favourite companies to have the same day or instant delivery because everyone else has it. That mentality alone is more than enough reason for you to invest in on-demand delivery.
As for on-demand warehousing, it is a warehousing service that is sure to save you a lot of money. With monetary constraints common among small businesses, anywhere that you can save money is a blessing. On-demand warehousing essentially lets you share a warehouse with another company that has excess space and is willing to share with you. Now let’s say you don’t want to share with any other company, so what do you do?
Why On-Demand Warehousing is a Good Choice
When it comes to getting a warehouse, you don’t have a lot of options. When you finally reach the point where you feel that you need a warehouse, there are a few things that you can do.
Go to a Big Logistics Firm
Your first intuition may be to go to the major logistics firm before anything else. They have plenty of experience, and working with them may even bring some positive press to your name. But that is if you can even get a meeting with them.
Major logistics firms often have a lot of clients currently working or willing to work with them. So, unless you have the endurance to be waiting weeks or even months before a meeting, this is not the option. Furthermore, these logistics firms have a lot of questions and criteria that you will first have to meet.
They will want to know what you are selling, how much of it you will be selling, exactly how much space you need, and when those products will be moving both in and out. And they will ask for a committed contract for at least one year. If this is not your cup of tea, you can go to a fulfilment company.
This is an excellent option for people looking for the professionalism of a major logistics firm, but with less-defined requirements. But this also comes with a catch of its own. The most dominant fulfilment company is Amazon’s FBA (fulfilment by Amazon). And as a retailer, going to the biggest competitor in the market is not the best option. Trusting vital supply chain information with Amazon is possibly the biggest mistake that you can make.
Buy Your Own Warehouse
Buying your own warehouse is possibly the most tempting of all of these other options. Having autonomous control over your warehouse and not having to worry about contracts. However, this is the option that boasts the most substantial upfront cost compared to all other options that you may have. Other than the fixed cost of the initial warehouse, there are variable costs of warehouse equipment, employees, and packaging supplies. This is not to mention the limitation that this single location will bring to shipping and delivery times.
The last thing that you can do for your warehousing problem is to rely on an on-demand warehousing service to match you with other warehouses. This is the only immediate solution to warehousing without costing you an arm and a leg. Of course, on-demand warehousing also holds a variety of other benefits for small businesses like you.
Advantages and Disadvantages of On-Demand Warehousing
It goes without saying that on-demanding warehousing is a dream come true for small businesses that don’t have the money for warehousing alternatives. But that is not to say that it’s entirely perfect or just something that every business is looking for. This is a particular service that is great for some companies that have to compete with much larger firms like retailers directly. With that said, here’re a few pros and cons for on-demand warehousing.
– No Long Leases
Possibly the most significant benefit of getting on-demand warehousing is that you don’t have to deal with long leases. Major commitments to bigger logistics firms for three years or longer can lead to problems or disputes between the companies. Smaller companies that are relatively new to the market have an uncertain future and require flexible conditions that support this uncertainty. These small companies may even expand over the years, making the previous agreement obsolete. On-demand warehouses don’t have any limited lease, and if you run out of space, find another.
– Very flexible
Depending on the nature of business you’re running, on-demand warehouses are a versatile solution to nearly all of your problems.
Are you seeking for a warehouse that can fulfil your orders? You can find that through an on-demand warehouse.
Are you looking for a warehouse that can deal with literally everything from picking, packaging, handling, etc.? Well, you can find that here. Whatever it is you’re looking for in a warehouse, on-demand warehousing sites are sure to provide it to you.
– Freedom to expand and improve
A major disadvantage of bigger logistics firms is that their leases can often get very shallow and inadequate. For the time that you’ve signed up with a logistics firm, the contract does not change, and neither does the space. So, you are stuck looking for another firm to take that extra space. With on-demand warehousing, you don’t have to worry about leases or space. You can negotiate space with the provider at any time, or even find a new one for your stock. And of course, on-demand warehousing is also substantially cheaper than larger logistics firms.
– Lack of streamlined IT
Not all warehouses have the right tools and equipment to manage the stock that you bring in. While some warehouses may be very technologically advanced, others may not even have the essential infrastructure record, plan, and report on inventory.
– Giving up control
Unless you are buying your own private warehouse, every warehousing option will have you losing some form of control from your inventory and product. So, unless professionals are working inside the warehouse, it can be hard trusting them with the warehousing process. And with no professionals working the scene, things can go bad very fast.
– Issues with stakeholders
Having a conversation with your stakeholders about you switching up operations can be difficult. And losing confidence in your shareholders is not something that you want. But when shareholders start to lose trust in the company, on the management part, there can be a lot of explaining to do. The management can explain a lot. Or worse, they might leave or pull out of the company, which is substantially worse.
Finding the Right On-Demand Delivery Service
On-demand delivery, combined with on-demand warehousing, is quite a lethal combination of efficiency. Customers that have now become accustomed to same-day or express delivery, and expect it to be the norm. So to integrate the on-demand delivery service into your company, you will have to find the right on-demand delivery provider for on-demand delivery in the region. Local on-demand courier services are a great place to start your search for the perfect courier.
Local couriers know the streets and know how the flow of traffic around the city. But they can also be tiny compared to the operation that you are trying to run, so it is best to go to bigger on-demand courier companies. Companies like DHL already have agreements with local couriers, and can make your deliveries as soon as possible. But they will be more expensive and can be very a little unpredictable.
You can also deliver these packages yourself, but that may not be the best approach if you’re looking to extend your business further.
Finding the right courier service can be quite a complicated process, almost as difficult as finding the right on-demand warehouse service. But since on-demand delivery has become a norm in the industry, not having it can deter many of your customers. So to compete with other more extensive and much more efficient companies, the on-demand delivery service is necessary. And a way to make them more effective is by making use of an on-demand warehousing service.