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What you need to know about logistics to make your startup successful

Business · 5 min read

Startup logistics

Some say the success of your business could be down to luck, timing or even the well-being of you, the founder. In our experience, getting your logistics right has a lot to do with whether your startup will fly or fall.

People often idolize founders of successful startups, holding the likes of Mark Zuckerberg or Steve Jobs up as quasi-mythical beings. In reality, running a startup is stressful and hard work, with evidence suggesting that ineffective management from founders is the downfall behind 65% of failed startups. It’s therefore important that founders feel supported when the going gets tough, by having their logistics already in place. This might seem complicated at first, but it can really keep the stress away if you plan it right from the outset.

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When cosmetics company Pestle and Mortar went from a tiny niche supplier of high-quality products to shifting the same items in sizable quantities, they turned to DHL Express to make things easy for them. An article in the New York Times gave them sudden, huge exposure, and DHL Express was able to help seamlessly satisfy every one of the orders that came flooding in. Now, when orders come into their Irish HQ from the other side of the world, they know DHL Express can deliver to any of their customers in a matter of days.

DHL was also instrumental in helping fashion brands Zanerobe and Kulani Kinis achieve global penetration but with minimal stress. Both companies went from ambitious startups with big plans to competitive global players in just a few months. Will you be following in their footsteps?

From plans to orders

So you’ve written your business plan. You’ve got funding. Your marketing is fully worked out. And your prototype looks great. But without the right shipping strategy in place, your startup is still just a plan. Even more crucial than your product and pricing, sorting your shipping and delivery options will play a big part in the eventual success of your business.

Without a coherent way to get everything where it needs to be, you face a steep learning curve and a lot of dissatisfied customers. We spoke to Leendert van Delft, Vice-President of Sales Programs at DHL, about what startups should be considering when planning out a successful logistics strategy.

How should startups decide on a delivery service?

Once you’ve researched the various delivery options, you need to decide if you are you willing to pay a fair price for a faster, more efficient service. In recent years, I’ve seen a lot of reports talking about free shipping, but you need to remember that this doesn’t actually exist! You still have to capture the costs of shipping in some shape or form, even if the consumer isn’t doing so directly. However, 91% of online shoppers will now leave a retail website if services like ‘fast shipping’ are not available, and they’re starting to prioritize speed over free shipping more and more.

If you were planning to simply use the local mail to ship your products, remember that there’s a huge difference in the transit times offered by them and an alternative express service. DHL Express offers premium features such as speed, multiple delivery options and a high level of reliability with customer service support – all of which I feel justifies the price difference for online shoppers. Your customers are the ones who will be paying the additional charges, so if they really need something the next day, they will almost certainly be willing to pay extra for this service if it is available. Just make sure your prices are clearly displayed when you offer express, and not hidden in your website’s footer or mentioned for the first time at checkout.

How should startups approach returns?

There’s a lot of evidence that shows how return rates are actually much lower on international shipping, so the bigger your ambition, the smaller this issue actually gets. I also think that you can measure your customers’ appetite for returns on a trial basis, so you can then evaluate the potential benefits over the losses. Returns are always going to occur in e-commerce, so your policy should take into account the additional orders you’ll earn by incorporating a free or easy returns policy. You could even incorporate their average cost into your overall shipping fees to eliminate the risk factor.

How will the average order value be affected by offering express?

You may find your shopping cart value actually increases with its introduction, as brands like Paul Smith and Gymshark enjoyed 70% boosts after they started offering this service. It may even be the case that potential customers you’re currently unaware of are using your competitors specifically because they offer express.

How international should startups aim to be?

There’s no risk in simply opening your doors to the international market, but I do think there’s a risk in getting left behind. It’s important to know what your competitors are doing, and whether they already offer international shipping. I’ve found Similarweb.com is useful in determining which countries to focus on. DHL Express can also show you how this is achieved through their own developed Website Health Check, analyzing your startup’s potential while also checking where your website could be optimized.

Strong evidence shows that international customers spend significantly more than local shoppers, so even if the international traffic to your website is small, it can be worth a lot for limited effort. Don’t just go for the obvious big cross-border markets either – with express, your business has the potential to be a true global brand!

What advice do you have for startups worried about customs delays?

This is where doing business with DHL Express could definitely pay off. They have in-house customs expertise and your appointed sales rep can support you in getting this sorted. If the paperwork has been done correctly, there shouldn’t be any customs delays or worries. You can also access plenty of relevant, easy-to-follow information on customs through either DHL’s Trade Automation Services (TAS) or local government websites.

How does express compare with a local mail service?

There are big differences in transit times between mail and express, so you need to decide if you want to pay extra for an improved service which could help you speak to the needs of today’s consumer: 45% say they have abandoned their cart because delivery would take too long, so make sure this doesn’t happen at your checkout! It’s also worth remembering that following a negative delivery experience, 38% of customers say they are likely to never shop with that shipper ever again. Conversely, more than two thirds of millennials have bought goods from one shipper over another because better delivery options were offered, and half of silver surfers have done the same.

DHL’s On Demand Delivery service provides various delivery options and also notifies receivers of their shipment progress via e-mail or text. With retailers who offer premium shipping growing 60% faster than those who don’t, I truly believe that when you give online customers a choice of delivery options, they will be more willing to pay a fair price for a more efficient service.

How should startups decide on a pricing structure?

It’s important to take a look at your projected average order and average weight first, and then see how such factors can be reflected in your shipping charges. You could offer flat rate shipping to certain countries, or even free shipping for customers who spend above a certain threshold. 75% of consumers claim they’ve purchased more items just to take their order above this minimum spend before. DHL Express also provides free packaging options and can help you work out the volumetric weight of the boxes, allowing you to determine the right price to publish on your site for express shipping.

Helping you move forwards

No matter how new your startup is, a DHL Website Health Check is a good idea to avoid making any obvious errors. Here's what it can do for your business:

  • Explore new customer channels by using SimilarWeb data to identify potential markets

  • Understand the various IT integrations with a focus on connections to the different e-commerce platforms

  • Provide an in-depth look at customs and trade agreements

  • Supply a deeper understanding of pricing strategies when it comes to shipping, ensuring your charges are appropriate

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