8 differences between delivery services, shipping and in house delivery for your growing business
It is becoming clearer and clearer that in our fast-paced world, providing reliable, safe, and speedy deliveries is no longer a nice offering to have, but an essential service.
The success of local businesses depends on their ability to adapt to changes in consumer behavior as well as their competitive advantages. Businesses will start creating partnerships with local delivery services to compete with the offerings of large corporations.
At Metrobi, we worked with several local businesses to start local deliveries and assisted them with co-marketing. One question we always get is the difference between a delivery service, shipping, and in house delivery operations. The question has been answered for purely e-commerce driven business models. But, it has not been answered for the case of local wholesalers, suppliers, and makers.
With this article, we aim to provide a comprehensive overview of the difference between delivery service, shipping service, and in-house delivery in the context of local businesses.
Logistics and delivery can make or break the future of your business
It is not a mystery that your customers work with you due to the authenticity and quality of your products. The demand for local products has risen among consumers in the last couple of years. And, retailers and restaurants have adapted to this trend by forming tighter partnerships within their geography.
Recent supply chain issues most industries have been facing demonstrated the importance of locally sourced products. While larger corporations had inventory problems, local businesses were more resilient due to their proximity and therefore logistical advantage.
The opportunity to win the competition against larger corporations was presented by the recent developments. Yet, it should not be taken for granted. Consumer buying behavior is driven towards home deliveries and bulk purchases. An inability to meet the delivery requirements can cause a fatal problem. Consumers and retailers want great products but they do not tolerate the unreliable availability.
Home and wholesale delivery
Particularly home delivery and e-commerce had always been a challenge for local businesses. One of the challenges is the adoption of technology – see our free e-commerce platform built for local businesses.
The other challenge is the delivery operations. Compared to traditional wholesale delivery logistics, e-commerce delivery needs to be much more flexible and therefore requires a wider network of vehicles. Several local businesses including BoardsByMo used Metrobi delivery service to start e-commerce operations.
Bulk purchase behavior of consumers constitutes another challenge. Retail outlets, now, tend to order larger amounts of stocks in order to avoid stock-outs. The logistical challenge is the spikes in delivery volume – ie. a local business might need two vehicles on a particular day and only one the next day. Businesses such as Quinlan Wasserman took advantage of Metrobi flexibility in local deliveries.
The need for mixing wholesale and home deliveries
The logistical advantage of local suppliers is their ability to combine home and wholesale deliveries. Learn how Dorchester Brewing Company has successfully combined wholesale and home deliveries to decrease costs and increase sales.
Different local delivery solutions have different value propositions. Therefore it is critical to understand the difference between a delivery service, shipping service, and in-house delivery for business needs.
Difference between delivery service, shipping, and in-house delivery for businesses
A quick search online results in many resources claiming one form of transportation is much better than the others. The reality is it depends. It depends on the nature of your products and business. Some businesses would even work with all these types of logistics solutions to provide the best customer experience.
How to determine the best solution for your business
Heavy or bulky shipments
Product size and weight is maybe the most important factor in determining the best logistics solution for your business.
- Shipping service: While UPS and FexEd make it really hard to accept loads more than 150lbs, anything more than 50lbs can cause much higher costs than regular shipping.
- Delivery service: Delivery services can provide more flexibility for the size of the loads. While most of the delivery services focus on urgent shipments of smaller packages, some delivery services provide delivery service for other business needs.
- In-house delivery: In-house delivery fleet can be created to the exact needs of your packages, and can handle the size and weight requirements. However, an increase in the necessary delivery volume requires business owners to hire another driver and lease another vehicle which creates a limitation.
Flexibility is critical to meet the delivery volume which can change from week-to-week and even day-to-day.
- Shipping service: When it comes to flexibility, shipping services are extremely flexible. You can ship one item or multiple items on a given day and you will only pay as much as you deliver.
- Delivery service: Delivery services also provide a flexible delivery capacity which can be adjusted daily.
- In-house delivery: Among all delivery solutions, an in-house delivery fleet is the least flexible option. A business doesn’t have the flexibility to hire and fire drivers one day to another. More importantly, renting a vehicle daily will introduce much higher costs and lots of time spent.
Delivery cost is one of the most important factors when it comes to choosing the best delivery solution for your business.
- Shipping service: Shipping services provide the least expensive option if your packages are less then 25lbs, and you’re shipping less than 5 packages a day.
- Delivery service: Traditionally, delivery services tend to be expensive due to lack of technology. However, at Metrobi we provide a 25% cheaper last mile delivery service compared to an in-house fleet.
- In-house delivery: Deliveries cost more than driver wages and fuel costs. Lease, insurance, maintenance, and time spent on managing operations add up to a larger amount.
Reliability is important to make sure that products are delivered regardless of vehicle and driver problems.
- Shipping service: Shipping services are reliable when it comes to delivery problems. However, products can be lost occasionally or delivered to wrong addresses.
- Delivery service: Delivery services provide a very high resilience against vehicle and driver problems. Delivery businesses have excess capacity of vehicles and drivers that can handle unexpected events.
- In-house delivery: In-house delivery fleet is the least reliable option when it comes to problems. Businesses rarely have the luxury to keep one extra vehicle and driver. When there is a problem, it is usually the business owners who need to take care of the problems.
Perishable, frozen or delicate products
Perishable and frozen products require a particular logistics solution designed for it.
- Shipping service: Shipping services are not suitable for delicate and perishable products as it is designed as a one fits for all delivery solution
- Delivery service: Some delivery services provide a dedicated fleet for perishable and frozen products. In the case of delicate products, delivery services provide a much better solution compared to shipping services because products are picked up and delivered by the same vehicle.
- In-house delivery: In-house delivery fleet can be tailor-made for the exact requirements for the business’ products.
If you’re an e-commerce company shipping smaller packages nationwide, a shipping service would be your best choice. Although delivery services create partnerships to handle long-distance deliveries, they are not as reliable as shipping services. And, an in-house fleet is the least suitable option for nationwide deliveries.
However, if your packages are larger, then a delivery or a 3PL provider can be your best option.
Same day delivery
When it comes to same-day deliveries where products are picked up and delivered on the same day, delivery services and in-house delivery fleet are the best options. Shipping companies can provide same-day delivery solutions. However, they tend to be much more expensive because shipping services are not designed for same-day delivery in mind.
Tracking and end-to-end control
- Shipping service: Shipping services’ tracking is limited to transfer centers and proof of delivery. They do not provide the exact location of drivers and a precise time of arrival.
- Delivery service: Delivery services, if they have a good technology infrastructure, can provide an instantaneous tracking of driver location and precise time of arrival. See how we leverage technology at Metrobi to notify your customers about delivery time and proof of delivery as well as giving you the full visibility of drivers.
- In-house delivery: If you use delivery management software, you’ll have full visibility into driver location and time of arrival. To send delivery notifications to your customers, a business should choose the best delivery management software.
Time spent on management is often overlooked but maybe one of the most significant bottlenecks of a delivery solution. Deliveries are mostly managed by business owners or a senior member of the team whose time is much more valuable for the business.
A delivery service and shipping service completely handle the full management of deliveries. Whereas, an in-house delivery fleet will need business owners to spend time for leasing vehicles, hiring&training drivers, and take care of daily problems.
To sum it up,
When it comes to deliveries, the best delivery solution depends on the nature of your business and products. This article summarizes the difference between a delivery service, postal service, and in house deliveries for businesses.