Image by Dariusz Sankowski from Pixabay

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Outsource or In-House Delivery: Here’s What Retail Businesses Need to Know

Emily Peyton

Image by Dariusz Sankowski from Pixabay

The retail sector went through a series of ups and downs at the beginning of the pandemic, but as things settled, businesses saw things moving forward. According to Statista, the retail sales growth worldwide is expected to reach 7.2% by the end of 2021 and 6.6% in 2022 (compared to a 5.2% growth in 2019). 

This growth is partially due to online shopping, which was a life-saver during the lockdown months. Plus, as more people adopted e-commerce into their lives, the delivery sector also noticed an increase in demand (more of a boom, actually).

Of course, this shift came with its own challenges (lack of drivers and proper vehicles), but it also led to the development of new lines of income for local drivers. 

On the other hand, almost every business that wanted to stay competitive had to answer an important question: keep delivery in-house or outsource the service? 

In fact, that question still keeps entrepreneurs and business owners everywhere up at night. So if you’re unsure about how to handle retail deliveries, we will try to clear the fog a bit by providing a few pros and cons for both scenarios. 

Outsourcing Delivery

If you decide to outsource the delivery process, here are the main pros & cons to consider:

Pros:

  • You’re working with professionals
  • No need to worry about logistics
  • No need for a major financial investment
  • Overall lower costs compared to an in-house delivery operation
  • Good customer experience since they know how to handle quick and smooth deliveries

Cons:

  • Prices can vary significantly in time (depending on your partner’s policies)
  • Third-party delivery services make it incredibly easy for customers to switch retailers
  • You don’t have direct access to customers’ data if they order using the delivery service’s app

In-House Delivery

If you decide to keep things in-house, you have to be well-prepared to cover the extra costs and effort this implies. But before you decide, take a look at these pros & cons:

Pros:

  • You control the entire process (plus the data of your customers)
  • Your budget is not affected by sudden changes in price 
  • You won’t get blamed for your partner’s mistakes (as it often happens when customers are frustrated with the delivery service)
  • With the right tools, you can find ways to optimize the process and make sure customers are happy

Cons:

  • It is a significant financial investment since you’ll need both vehicles and drivers
  • It takes time to learn the ways of fully-optimized delivery
  • The vehicle maintenance and other expenses fall on your side of the hedge
  • You may not be able to offer free delivery and other perks big delivery companies tend to offer as an incentive.

In Conclusion

While the decision is influenced by a lot more factors, it all builds around your available budget and plans for the future. According to the current trends, the customers’ preference for delivery is likely to stay even without the pandemic. So if e-commerce is likely to become an integral part of your business, you may want to consider in-house delivery. 

Outsourcing is also a great option if used correctly. For instance, small businesses and startups may find it easier to outsource the delivery part since it puts less pressure on the budget. Plus, it’s easier to trust an experienced partner than start your own delivery service without any prior experience in the field.

Overall, at least until self-driving cars are something we can rely on, delivery services (outsourced or in-house) are the best method to make sure customers stay happy with your business. So take your time and consider all the factors before taking a decision.