Insights & Analysis

Benefits of not using third party logistics

BY Carl Thompson 20 Sep, "12

Third party logistics (3PL) can be a godsend for businesses moving huge amounts of stock, yet many smaller businesses are not only wasting money, but losing a valuable marketing channel by using them.

I experienced both third party logistics and in-house logistics running my own clothing label. I would like to share my thoughts on why small businesses should retain in-house logistics for as long as possible.

First of all, let me say this advice is in no way a dig at logistic professionals. They are a great option for high volume businesses and have an important place in the market. However, I believe smaller businesses can create an advantage by maintaining in-house logistics and customizing their deliveries.

Using Your Deliveries As A Marketing Channel

When you’re young in the market it’s difficult to get people to buy your product. Your first customers, the ‘early adopters’, are the lifeblood of your business when your marketing channels are maturing. These initial customers are seeking out unique brands and products that none of their friends have. They buy not only because they love your product, but because they have an emotional connection to the concept and identity of your brand.

Retaining your logistics in-house gives you opportunities to personally connect with these ‘early adopters’ and nurture their growing loyalty.

Look at ways to add value to every shipment you send out. Whether you include a personal note, a brochure/catalog, or perhaps an extra something for repeat customers. I once ran a campaign where we sent sample packs of a friend’s product out with our deliveries.

I’ve personally received emails, Tweets and Facebook posts from customers who were thrilled by the way we exceeded their expectations.

Personalized deliveries like this can only be achieved by keeping logistics in-house and they’re a great way to establish strong connections with your ‘early adopters’. From day one you should be thinking about how you can leverage every customer touch point and maximize the value you offer the customer.

I know a number of companies who work with the best of both worlds. They keep their website orders picked, packed and posted through in-house logistics, but send their retail orders out through 3PL.

Leverage your deliveries and create loyalty amongst your early customers. Because if they love you, they will promote you.

by Carl Thompson

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