Depending on the products you sell, the size of your business, and the location of your customers, shipping directly may be a wise business decision or even a downright necessity. Find out how an efficient direct shipping system can maximize your company resources and customer satisfaction.
Direct shipping refers to a method of fulfillment in which products are sent directly from supplier to consumer, circumventing a physical store or warehouse. Shipping directly differs from dropshipping, in which goods are sold by a third-party retailer online and shipped by the supplier.
With direct shipping, DTC brands can sell products to customers without having to secure and maintain a physical retail shop or sell wholesale to retailers. If you already have a physical presence, direct shipping allows you to maintain only a small inventory rather than a full stock of each product in all its varieties.
A direct shipping network is the transportation infrastructure used within the supply chain. It includes aspects such as routing and scheduling. When you're developing your company's direct shipping network, aim to answer these questions:
By planning your direct shipping network around your company's specific needs, you'll be able to streamline the entire delivery process. Your products will be delivered more accurately, effectively, quickly, and affordably.
Direct shipping is especially advantageous for leaner ecommerce companies that are just starting out or have smaller order volumes. Its five main benefits are:
When you ship direct, you'll have more control over your inventory, branding, and orders. This can help bring you closer to your customers if you want to customize packaging and branding.
Because you’ll be able to control how your products are handled, stored, and shipped, shipping direct can help you save money on supply chain expenses. Direct shipping also eliminates the extra expenses that come with third-party distribution centers, including warehouse and logistical costs. You can then pass these savings on to your customers.
By choosing to ship direct, your company doesn't need to worry about overseeing a supply chain with stops at warehouses or seller facilities. After you pass on the delivery information, the supplier will manage the rest.
With direct shipping, your company doesn't need a physical store or a distribution center. Without these intermediaries, your customers will receive their products much more quickly.
Direct shipping means your business won't need to store inventory or manage shipments. Instead, you'll be using larger shippers and suppliers that are more efficient. As a result, your company will be able to reach a larger customer base and sell larger quantities of products, but you won't need to create a larger retail space or increase your company's resources to do so.
Direct shipping is not without its drawbacks. Being aware of the risks—like product availability and quality management—you can decide if direct shipping is appropriate for your business and customers.
While shipping direct gives you more control over the inventory, you'll also have more responsibility that may otherwise be handled by an intermediary, like a 3PL. This could be a problem if you're not prepared for a sudden surge in product orders. If you expect an increase in customer orders, secure enough warehouse space to store all the items you'll need to meet the anticipated demand.
When you ship direct, there's no way to ensure the quality of the products sent to the customer from the supplier. This can put your reputation in jeopardy if there are shipping issues with a customer. Third-party logistics (3PL) provide a better way to ensure shipping through SLAs.
Generally, direct shipping requires more internal resources to manage customer service and fulfillment processes. This will lead to more fulfillment costs for payroll, shipping expenses, software, and more.