Free Delivery: Guide for Small and Mid-sized Businesses
June 10, 2021
What are the two magic words every customer wants to hear? Free delivery.
You might remember that when we talked about last-mile solutions for Shopify, we spoke about how consumers gravitate towards brands that offer fast, free, sustainable shipping. All three are easy to set aside because they belong to the realm of big companies and Enterprise-level staples. But what if I told you free shipping is something small and mid-sized delivery businesses could implement too?
Fundamentally, free shipping is all about balancing your delivery costs to the point where they’re so low you can afford to deliver for free. With the right tools and efficient processes, you can dramatically reduce your operational costs and come closer to providing free delivery even as a small business.
In this blog post, we explore what goes into free delivery and how it can be implemented by SMB with minimum hassle. But let’s start at the beginning.
Free delivery statistics
If you want to get inspired to do free delivery, you don’t need a lot of pep talk – just look at the numbers.
Free delivery is something that can turn a person's buying mood around: when this option is available, 90% of people are inclined to shop more. As we can see from Amazon Prime’s example, free delivery can even be the basis of a successful business model.
Customers love free delivery for obvious reasons. But stats show that businesses benefit from introducing free delivery too. It’s a win-win situation and there’s no reason for small and mid-sized businesses to stay behind.
What is free delivery made of?
When you’re a small to mid-sized business, free delivery is the result of a lot of optimization and careful planning. Let’s look at what goes into such planning and optimization.
1. Prescheduled delivery
Unlike on-demand delivery that requires couriers to travel a whole separate route to deliver one order, prescheduled delivery is a way of organizing several orders into one route. What do you get when you combine several orders into one route instead of making a separate route for each order? That’s right – lower cost per delivery.
Not all delivery businesses can do prescheduled deliveries. But even within the food delivery business – which is notorious for its harsh delivery conditions – there’s a segment of companies that can comfortably provide prescheduled deliveries. Grocery, meal, and water delivery are just a few examples.
2. Route planning
When you’ve moved to a business model that relies on cheap prescheduled deliveries, it’s crucial to organize orders within each route in a way that makes the most sense time- and money-wise. This is what a good route planner can do absolutely error-free.
A route planner like Track-POD uses AI to build the most efficient routes that cover all of your daily orders. You still have full control over the routing process as you can interfere and change the order and priority of deliveries but the point is that you can rely on the software to do all the hard work for you. Efficient, fast routes that pack a lot of deliveries lower the cost per delivery even further.
3. Fleet optimization
Fleet maintenance and optimization is the job of a fleet manager. Even if you don’t have a designated person to make the most out of your fleet, there’s no reason not to use fleet management tools that make sure that you deliver your maximum using minimum resources.
For example, Track-POD lets you indicate maximum capacity for each vehicle in your fleet. Multiple vehicle parameters, combined with things like speed ratio and driver’s breaks, make for excellent fleet management and optimization. On top of that, Track-POD powers order checks and proactive vehicle maintenance, which saves you a lot of money on urgent repairs.
4. Fewer man-hours
The driver shortage is a real thing, and it can cost a delivery business a lot of money. Regardless of how good your truck driver management is, you always run the risk of having insufficient human resources to fulfill all of your orders on time.
Delivery management becomes a lot easier when you’re using a route planner that organizes your drivers’ daily routes in a smart way while also making the most out of your vehicle resources. Ultimately, you need fewer drivers, for shorter shifts, to deliver more orders, which cuts your delivery costs a lot.
5. No extra paperwork
Paperwork is exceptionally good at dragging things and making them more costly. Unfortunately, managing a business requires doing a lot of paperwork, which can’t be said about managing deliveries. Here’s how this works.
As a business using last-mile delivery tools like Track-POD, you can make your delivery process completely paper-free. With features like electronic signature and photo proof for contactless deliveries, you can move to electronic Proof of Delivery (POD) documents. Cutting paper out of the equation makes for faster, cheaper, and more sustainable delivery – something customers appreciate a lot.
6. Fewer disputes
When your whole delivery workflow is customer-centric and efficient, not to mention paperless and relying on instant communication, you significantly reduce the risk of disputes that may arise when you fail to deliver. With a few tricks up your sleeve like scanning of goods, live traffic data, and order transfer from driver to driver, you can rest assured that your rate of successful deliveries will remain at an all-time high.
Delivery success is what keeps your customers happy and coming back for more. Your business, in turn, is also safe from disputes that add a good chunk of expenses to your overall costs.
Free delivery, small business style
Now that you know what free delivery is made of, it doesn’t seem so unrealistic, does it? It’s time we moved to the practical side of things. How can you, as a small to mid-sized business, introduce the free delivery option? Let’s break it down.
Find a last-mile delivery tool that fits your bill
The market of last-mile delivery software is booming, and there’s a tool out there for every budget and scope. I’ve explored a lot of these tools in the past so you don’t have to: Onfleet, Routific, OptimoRoute, WorkWave Route Manager, Tookan. Dive in and choose the software that covers everything required for creating conditions for free delivery + your specific operational needs.
If you go with Track-POD, you can get started for as little as $19/mo per vehicle. As you keep growing, you can easily move from one plan to another – or choose to pay per number of tasks a month. Anyway, your cost per delivery with Track-POD can be as low as 10 cents. Isn’t too far from free delivery, is it?
It’s one thing to give your drivers the tools to run vehicle or order checks and another – to involve your customers. While for drivers it’s still additional hours of work that you need to compensate for, customers can take a share of your order management responsibility without any compensation on your part. Here’s how this works.
When you have a place where your regular customers can log in to add, track, and manage their orders, you empower them to work with you and save you time and money. Track-POD’s Customer Portal, for one, is an excellent way to engage your shippers in order management. Being a part of the process, customers have their orders processed quicker while doing a chunk of your work – a total win-win.
Any fleet manager will tell you that optimizing your delivery operation is essential for consistent growth and profitability. When you’re on the path to provide free delivery, analytics that you can draw performance insights from is your best friend, and it’s crucial that you have access to it at all times.
A delivery management tool like Track-POD offers extensive analytics that stretches up to 24 months in the past. The analytics table is completely customizable and you can add or remove columns until you get the perfect look that you can extract data from. In addition to analytics and a breakdown per KPI, you also get built-in reports with breakdown into successful, unsuccessful, and partially successful deliveries.
The analytics tab is also where all order-related information lives in case you need to retrieve a Proof of Delivery document or check specific order details.
Free delivery is not an unattainable reality of Enterprise companies. It’s much easier for small and mid-sized businesses to implement than people think, and there’s every reason for you to get on board with it and delight your customers. When broken down into smaller chunks, free delivery turns out to be the result of a series of optimizations that you can do with a last-mile delivery tool like Track-POD.
Track-POD will help you optimize your delivery costs to the point where you can comfortably offer the free delivery option. If you want to see Track-POD in action and ask questions specific to your operational needs, do not hesitate to book a free demo.