When small business owners select third-party logistics providers like Amazon, they are in essence giving away the farm to these goliaths of industry.
Why?
Because they are giving up control of their customer data and in fact, can’t even get the information from customers without risking being banned from selling on these sites.
In addition to this, small business owners have been hamstrung by e-commerce technologies that promise the world, but in fact, add significant human costs to running a business.
In this article, we’ll discuss the ways manufacturers can take back their customers and improve operating margins.
Most current e-commerce platforms are not integrated and keeping data current between platforms that don’t talk is costly and time-wasting.
Most third-party logistics companies like Amazon do not allow you to get information from the customer that would enable you to market to them directly. Amazon wants to keep you and the customer operating exclusively in their universe.
Why?
Because they make a good margin from your sales, and as they own the customer data, they can then market other things to these very same customers. You don’t get any credit for this ‘other’ marketing and you don’t own the customer.
To take back control of your database of customers as a small business owner, you can use new E-commerce 3.0 technologies that incorporate excellent logistics tools within a single platform and a single-source-of-truth package. Taking this investment decision, then, also helps you solve the second problem of high staff costs which cruelly reduce the profit or margin available to you.
E-commerce 3.0 is a single-source-of-truth, and so the small business owner no longer has to pay people to get computer programs to talk to each other. This either will lower the headcount needed or allows you to deploy staff to income-generating activities in sales and customer service.
The use of a single-source-of-truth will also avoid errors that can cost money and sap customer confidence. As a result, customer satisfaction and loyalty and ‘stickiness’ will rise—all contributing to a higher profits, and higher value e-commerce business.
The smart small business owner can now compete with the Goliaths using their secret weapon of customer experience and understanding, all while not giving away margin to those 3PL providers who seek to control your client database by stealth. This single-source-of-truth can also enable you as a small manufacturer to integrate your suppliers into a strong value chain that provides a high-quality customer experience.
Customers will leave companies who provide poor service, but they will stick to companies that provide an above-average experience from order to fulfilment.
As a small manufacturer, you can future-proof your business using these technologies and business models. After all, wages and salaries are not going to go down anytime soon, especially in a global market of rising costs, high-interest rates and inflation. Similarly, owning your own customer database gives you more control over your brand, profit margin and product and service mix.
Owning customers can be closely followed by knowing customers through detailed market research to identify emerging needs, wants, behaviors and attitudes of your customers. Simple demographic profiles can enable you to target your marketing much more efficiently using ‘similar-audience’ profiling. And again this targeted approach will lower the operating costs of sales and marketing.
There is no downside to owning and knowing your customers, and part of this is owning the fulfillment and logistics stages in your operating model.
Finally, all this will add value to your business down the track when you decide to exit.
If you want your small business to be profitable now and in the future while maintaining an amazing customer experience with a lean team, investing in logistics technology, particularly E-commerce 3.0 solutions, is essential. These solutions integrate all the necessary components into one platform.
