For a business owner in a furniture and accessory company, shipping and delivering to local customers is a regular part of how you do business. One of the keys to managing this service is minimizing the cost of moving product to your customers. Depending on the percentage of your products that can ship via UPS or FedEx, you may want to consider renting a truck on the occasions that you have larger deliveries.Calculating the Cost
Shipping and delivery cost can be quite expensive, especially when you add in the cost of labor hours for delivery personnel. For items that are small and light enough to ship via UPS or a similar company, it is often more cost effective to do so. However, to determine if that is true for your business, you need to chart and calculate the costs over a month's period. Compare costs for local shipping versus local delivery, and include the amount of money it would cost to buy and insure a commercial truck. Research each cost to determine which option works the best for your business.Costs to Research
If you consider everything that is needed to deliver large products to customers' homes, you can make a valid comparison. Here are the components of a successful delivery service:
- Fuel cost
- Cost of truck
- Cost of insurance for truck
- Labor cost for two delivery personnel
- Insurance for the personnel
- Labor cost for scheduler and handler
- Labor cost for customer service representative
Of this list, only the scheduler and customer service representative need to be regular employees from your company that can be reached during business hours. The remainder of this list can be hired or rented on an as-needed basis until your company has enough sales to make several delivery runs per month. You can ship items via common carrier without making the deliveries yourself, however for local deliveries this option is not usually cost effective.Cost of Shipping Smaller Items
Depending on the schedule for your delivery runs, you may find that it is cost effective to put some of the medium-sized shipments on the delivery truck. This cost is one that you will have to calculate when you compare numbers. When it comes to local shipping, sometimes sending heavy packages by mail or UPS is not cheaper than delivering it yourself. Set up a spreadsheet to compare each category of shipment price from each potential carrier. Over a period of a month, you can assess the best method.Where to Rent a Truck
Truck rental options vary widely. Examine your options carefully as you research. Truck rental is generally priced by the hour or day plus a fuel cost. You may be able to find a company who will rent by the weekend or have a lower price on certain days of the week or month. If you are sure of a regular delivery schedule, you may also be able to negotiate a lower rate per use for a specific number of rentals per month. These comparisons should all be charted on your spreadsheet.
Other issues to consider when renting are the age and condition of the rental trucks at each facility. Does the owner keep their vehicles in top-notch condition? If not, you will be upsetting your own customers if a problem occurs on a scheduled delivery day. All of these factors can be charted on your spreadsheet as you figure out costs.Hiring Delivery Personnel
In most cases, the best bet for hiring part-time or occasional delivery personnel for your company is to find loyal employees and offer them extra hours. These employees already work for you and know the company, its products and customer service policies. However, if this isn't your best bet, you can add hiring options to your cost research list such as temporary help, part-time help, contract help or a trucking company with their own drivers.Don't Make Assumptions
Many people assume that USPS and UPS are cheaper than FedEx, and others common carriers are cheaper than hiring your own truck and driver. These assumptions are often wrong depending on weight, location and packing materials. It is well worth your time to look up each cost as you do your research to determine if your assumptions are right or wrong. It is also worth your time to talk to the folks at Del's Truck Rentals for more information.