Apr 24, 2011
Picking a courier company / logistics partner is probably one of the most critical decisions for an Ecommerce company. They are the last mile of your interaction with the customer, and as a result you need to be really careful about that experience. So please consider the following points as you select one or more logistics partners for your ecommerce business.
1. Pin Codes covered - The more the merrier. You would be surprised the remote corners your customers can come from.
2. Delivery times for Tier 1, Tier 2, Tier 3 and Tier 4 cities / regions - Most of your customers are going to be from Tier 1 and Tier 2 cities. So ensure that your logistics provider commits to delivering your products in these cities in super quick time. Ideally next day. Worst case within 48 hours.
3. Own Network vs 3rd Party Network - Ask your logistics provider about details of the network they cover. How much of the pincodes that they cover is by their own fleet, and how much is outsourced to a local 3rd party provider. The difference in quality would be stark between the two, as will be the accountability.
4. Dedicated Relationship Manager – Demand for one. You need someone senior to service your account. Depends on the size of your business, but still demand it and get it.
5. Rates - The all important one. Shop around and consider all the factors on this list, and not just this one. Yes it needs to make sense for your business. But you don’t want to pinch pennies here at the cost of your customer’s experience.
6. Technology support – Check out how much information they can provide you and your customers with their technologies. Courier tracking and on demand status are the minimal service they should provide. They should also provide your customer support team to find the status of a bunch of Airway Bill Numbers.
7. Reconcilliation – This one is crucial to your accountant. Make sure they offer you on-demand reports of how many packages were picked up, how many delivered, send you the proof of delivery receipts, as well as all cash collections for Cash-on-Delivery orders. Also settle with your logistics company once every fortnight. In my experience, the longer the period of settlements the more the number of issues that crop up.
8. Damage and Return policy - Read this part of any contract you sign very carefully. Who is liable in case of damages to the products? What is the maximum amount of liability taken by the logistics partner? What is the insurance coverage provided? Please factor in these points when you publish your return and refunds policy.
9. Weight vs Rate – When you are considering a logistic partner, please check how their rates goes up with respect to the weights of the shipment. Does the increase seem justified? Or do they plan to make a killing when the shipment weight goes up? When you formulate your own shipping policies please factor in these costs.
10. Cash on Delivery – Extremely important in India. COD is still the preferred method of payment for many online customers. So please pick a logistics partner that provides you this service. Also do the homework in checking out the reputation of your partner when it comes to settlement of the COD amounts. This is really crucial as they become your collection agents and any delays on the logistic partners’ part in settling payments would then impact your cash flows. But still this is extremely important. And cannot be ignored.