As a Retailer, You Need to Outsource Your Distribution ASAP
While the retail industry is certainly going through a metamorphosis and many "high street" shops are starting to disappear, this does not mean that the consumer is any less demanding, as they will still want their goods as soon as possible. Some companies find it difficult to cope with the changing face of demand, and while they may understand that local footfall may not be as buoyant as before, they know that they need to sell products to their consumers wherever they may be. This is why any moderately sized retail organisation has to have a good look at its distribution model if it is to not only survive but prosper. What changes may need to be made?
Nothing stands still in the world of retail for very long. A decade or so ago, the smaller operation was coming under pressure from the big box store, as these facilities became more prevalent in the suburbs. Yet people are beginning to turn away from those stores as well now, as they expect their goods to be delivered to their home instead.
There are some mega multinationals involved in this game, of course, and they have a very sophisticated online presence, together with an even more sophisticated distribution network. It can be difficult for the average retailer to compete, but they can have a perfectly good share of the market if they make the effort.
For most retailers, this means that they need to outsource distribution to a third-party logistics company, as these particular organisations are focused on getting the product from the source to the customer "just in time." They are taking a leaf from the multinational book and are trying to deliver the product in as short a space of time as possible and at a specific time each day. However, this type of arrangement is only possible if the organisation is very well engineered and if the company is able to take advantage of the economies of scale.
Efficiencies and Economies
Third-party logistics companies will often work together to form a network so they can help each other to mutual gain. They may have lower distribution costs because this is their primary focus, and this will help them to offer competitive rates to the retailer in the beginning. They will also have a reliable fleet of trucks and vans ready to move everything from source, to warehouse, to customer, and they will have an army of highly trained drivers and other operatives.
If you have a medium-sized retail operation, then you need to turn over your distribution needs to a third-party logistics company as soon as possible. This will allow you to focus on what you're good at so that you can take advantage of a proven method instead.