Logistics is about what is being transported. Some say it’s about how it gets done.
What is logistics about? It’s about the actual logistics of a product. Whether the product is air travel, electrical power, or food we get to decide what goes where.
The nature of logistics is an objective. It is about efficiency and effectiveness. If you don’t have a good idea what is being shipped you may be shipping something improperly. Shipping can be dangerous and it can affect the safety of your business.
How do you manage the way in which you use logistics? You determine how much and how fast your business needs to be shipped. If you ship things slowly, there is no reason to ship them at all. If you have a lot of merchandise and it takes forever to ship your products they will sell at a lower price.
There are two things to think about when shipping a product. One is your cost per unit and the other is the return. The cost per unit is the amount you need to pay for the item. It includes any costs for the paper, labor, and packaging and such.
Then there is the return. This is the amount the customer will pay to return the product. It includes the cost of any items that were damaged. It also includes the cost of any items that were lost during the shipping process.
Once you know these two numbers, you can figure out how much your customers will pay for the return. You can either charge the returnor pass the cost on to the customer. In the case of returning a product in an expedited fashion the cost will be passed on to the customer. This is a great way to keep the return costs down.
You must factor in the costs of shipping a product to your customers. You should include both the cost of the shipping itself and the cost of packaging and such. These costs will not be factored into the cost per unit. You can easily determine the cost of a product by the amount of money you need to spend in shipping and packaging. Your price per unit will be affected by these costs.
But when you’re shipping an item that doesn’t involve moving it you can simply provide the customer with a discount. Think about it. If a customer decides they want something at a lower cost than you quoted them. You are now in a position to give the customer a discount.
Pricing a product or service that involves shipping is very important. It has to be based on the condition of the product. It must also be based on its cost per unit. It must also be based on the customer’s return ability. You cannot charge your customer’s less than what the market will bear.
Shipping is a thing that needs to be kept simple. You must give the customer what they want at a price they can afford. When you do this you are doing a service to your customers.