Once you have set up a business that requires shipping on a regular basis, you will have to decide whether to do it on your own or to outsource it to a third party. Let us look into the pros and cons of either option.
Own shipping:
If you have a fairly large shipping overhead AND you have decided to do it yourself, you need to understand a few basic pointers about shipping. Firstly, understand the cost it involves. Based on that, decide whether you want to offer free shipping to your clients. This decision is greatly dependent on your margins and volumes of business. You need to find a reliable courier service provider and book a shipment every time you find a customer. A keen business person does a lot of groundwork before zeroing in on a service provider. Imagine doing this for EVERY shipment you send out. It involves a lot of time and effort. Once you have sent it, you will be responsible for the shipment until it reaches the customer. The customer calls you if there is a delay in his/her shipment. You take on the responsibility of tracking the shipment and redirecting it if necessary. Having your own shipping service translates to maintaining your own fleet of transport vehicles. That is a huge overhead in terms of costs, space and effort.
The advantage of running the show yourself is that you get to choose the type of shipping yourself. If you have the time, you can hunt for the cheapest freight service for your route. If the customer is in proximity, you can save shipping charges and send your own personnel to deliver the product. You can choose US Postal Services in place of FedEx or UPS to save shipping costs. There is no middle man and you get to know if there is a mess up. You can track the shipment and collect late shipment refunds in case you are eligible for that. Automating your shipment tracking and refund retrieval brings down most of your manual effort and helps brings down overall shipping charges.
Shipping through a third party carrier:
You can outsource your shipping to a third party vendor who specializes in shipping. He offers a contract and does it for a fixed price. In case, you do not have the time and personnel to take care of shipping at your end, you can choose a third party to do the same. Shipping biggies like FedEx and UPS offer competitive packages to businesses and have a good track record for the same.
The advantage is that you are completely free of shipping related responsibilities. The partner ships, tracks and takes care of customer queries regarding the shipment. In case of overseas shipments, there are various legal issues to be kept in mind. The partner takes care of all that. You need not worry about shipping audits, personnel to do that, shipment tracking or answering shipment related questions from the customers.
The disadvantage of using a third party shipping vendor is that you are answerable to the customer in case the shipper does a bad job. From the customer’s perspective, your image is tarnished if the shipping partner goofs up. So, it is prudent to go for a very reliable shipping partner, if you wish to do so.
