How local SMEs can compete with e-commerce giants through outsourced fulfillment

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With the arrival of e-commerce giants such as Amazon, Shein, and Temu, how can local SMEs optimise their business to stay competitive?

"By outsourcing fulfilment services,” says Damian Velayadum, group financial director at Fastway Couriers.

“Many global e-commerce players utilise local delivery partners. This means that South African SMEs have just the same access to market-leading services that these bigger companies enjoy - they are not exclusively offered to big business.”

It's likely lesser known that courier service providers offer more than just the final knock on their customer’s door to deliver a parcel.

Logistics providers offer comprehensive support across the value chain, handling everything from receiving and processing orders to warehousing, inventory management, picking and packing, shipping, and handling returns.

This end-to-end service constitutes a significant portion of business operations, offering substantial cost savings and efficiency gains for businesses.

Here is how:

Cost efficiency and resource allocation

Reducing operational costs is always a good place to begin. The maintenance of fleet and delivery vehicles, hiring of drivers, and managing logistics are all costs to the business. Outsourcing last-mile delivery can significantly reduce these costs.

Focusing on core competencies is important. By delegating other responsibilities such as delivery, an SME can focus its resources on core business activities, such as product development, marketing, and customer service.

Enhanced delivery speed and reliability

Outsourcing last-mile delivery allows SMEs to scale their delivery operations quickly without requiring significant capital investment in logistics infrastructure.

The upside to utilising professional delivery companies is having access to their expertise, infrastructure, and technology to ensure faster and more reliable deliveries.

“You can benefit from the sophisticated logistics software that optimises delivery routes, reduces fuel consumption, and minimises delivery times,” says Velayadum.

Improved customer satisfaction

Delivering packages to their destination within the expected timeframe, and doing so consistently is an integral aspect of the logistics industry, leading to overall customer satisfaction.

Many third-party delivery services offer advanced tracking systems that provide customers with real-time updates on their orders, enhancing transparency and trust.

Efficiency in logistics and delivery is integral to our economy and the local supply chain.

Playing smart in this space could significantly increase your output as a SME, allowing you to scale growth and improve your efficiency.