Stark differences between managing E-commerce deliveries in-house and outsource

In my previous post, I highly recommended to engage courier services for E-Commerce Deliveries in Singapore. There are huge benefits associated to it – zero fixed costs, zero human resource planning, zero vehicle management issues, and more time to concentrate on improving your competitive advantage.

I will be supplementing that post with more facts on the differences between managing E-commerce deliveries in-house and outsource in this post. After going through my list of facts, you will definitely be more convinced of the benefits as derived in my previous post. I know some of you likes to analyze things from the bottom-up – making your own analysis and judgements after getting all the facts.

E-Commerce delivery boxes

Firstly, if you manage your E-Commerce deliveries in-house, you will need to hire a fixed salaried staff and rent a van. There is no question about it. If you would like to argue that you can offer fully commissioned salary scheme to drivers where they are paid per trip, then it will be futile – there will not exist any takers for it. Drivers know that low volume of deliveries will not give them much salary if they opt for the fully commissioned salary scheme. Hence, there will be a fixed cost from the start if you want to manage your E-Commerce deliveries in-house. It will definitely be more costly as compared to outsourcing the E-Commerce deliveries to an external E-Commerce logistics company where they charge you per delivery.

Secondly, you have to manage your drivers and vehicles continuously to ensure that both are performing at optimal standards. If the drivers are slacking or the vans are having some issues, you will need to motivate the drivers and send the van for servicing respectively. You will definitely be using up more time if you are managing the E-Commerce deliveries in-house as compared to outsourcing them.

Thirdly, you will need to plan for contingency events for deliveries if you want to manage the deliveries in-house. Contingency events such as workers taking leaves or delaying their deliveries may happen. Hence, there may be a need to hire part-timers or additional staffs to provide buffer to the operations. If you outsource the deliveries, the logistics company will take care of these issues for you.

An important concept to aid in your decision-making on whether to manage your E-Commerce deliveries in-house or to outsource them is to weigh the potential cost savings you can get via in-house deliveries management versus the cost of delay in competitive advantage improvements. You will essentially be saving more time and effort if you outsource the deliveries at some expenses, and vice versa. In the scenario where you think that you will not be able to produce cost saving if you manage the deliveries in-house, then it will be an outright wise choice to outsource your deliveries to a logistics company in Singapore.