Delivery as a Service (DaaS) [What is, Features, Benefits, Working ++]

Introduction

In markets where everything from food to fashion is fast, ecommerce deliveries cannot be slow. However, the amount of resources required to ensure a fast delivery is beyond comprehensible for smaller businesses. Technology introduced ‘Delivery as a Service(DaaS), a solution to this riddle. 

Ecommerce giants can deliver within shorter times as they have a self-deployed delivery supply chain. With the help of DaaS, you get a virtual fleet. You get to tap into the logistics resources of an established courier company without having to acquire or lease any equipment. 

You will be assigned these resources as per your demand at the time, which saves you on operating costs while enabling lighting fast deliveries. The below blog article has covered all the necessary points that you will need to understand the concept in its entirety. 

What is DaaS (Delivery as a Service)?

Delivery as a Service (DaaS) is a logistics business model that provides delivery services on demand to reduce operational liability. This business model uses technological solutions to complete the delivery of goods on demand. 

3PL companies have started to use the service delivery model. Leveraging cloud computing technology, the delivery resources in the area are allocated to fulfill customers’ requirements. This allows businesses to avail on demand delivery services and logistic companies to ensure the ideal use of every resource.

Top 3 Key Benefits of Using DaaS (Delivery as a Service)

If you look at most DaaS providers, they are 3PL or logistics companies. Providing only delivery services is not their primary forte. So one might wonder why shouldn’t a business just use its logistics services instead of just the delivery services. Here are three key benefits of choosing DaaS.

1) Convenience

All you need to do while using a delivery service is select the provider and place a delivery request. You can skip all the hassle of integrating the API, negotiating the SLA, delivery fees, etc., and start delivering. This delivery service model is beneficial for both ecommerce retailers and local businesses. 

It allows ecommerce retailers to skip the part with the heavy integration and fulfillment operation setup to provide expedited delivery. It saves local businesses from having to spend resources on building and maintaining a delivery fleet just to enter the hyperlocal fulfillment game. 

2) Competitive Advantage

The DaaS model enables delivery with the help of resources from reputed 3PLs. This will allow you to effectively manage your shipping budget. Customizable shipping options will give you an edge over your competitors. You will likely see an increase in your conversion rate at the checkout page. 

If you are a local business, you can cater to your local customer base with on-demand services. This will increase reach, and customers will pay a premium for the convenient service, increasing profitability. You can enter the hyperlocal delivery space with ease allowing you to expand your customer base with nearby markets. It also eases the process of new customer acquisition. 

3) Easier Penetration into Local Markets

Every ecommerce company dreams of being a nationwide success. But success begins at home. Local markets can also be a great platform to test your products with actual customers in a small area.

It becomes easier to set up a fulfillment center and use on-demand services to meet local demand. This allows for feasibility and flexibility in the fulfillment operation without having to compromise on control and quality. With access to the virtual fleets through DaaS models, you can grow and scale in the local markets as per your potential.

How does DaaS (Delivery as a Service) work?

If you look at it functionally, the DaaS model is not new. It is just a new approach to utilizing the existing resources of a logistics company. The first step in this process has to be often taken by the retailer. The retailer will book a delivery service with a provider. With the help of cloud computing technology, the provider will scan, assess and allocate the required resources from the supply chain in that particular area. 

These resources are allocated based on the requirements of the retailers. It can be delivery vans or an individual driver. Once the parcel is picked up, computing technology is again brought into play to improve the route taken by the package. The package is delivered to the customer’s doorstep by the delivery service. As the service provider will provide end-to-end delivery management, the business does not have to worry about building and maintaining a delivery fleet. On the other hand, the delivery provider will use the delivery fleet to serve multiple retail businesses in the area. 

6 Primary Features to Look for in DaaS (Delivery as a Service) provider

The perks of using DaaS will be nullified if you don’t pick the right service provider. Here are six factors you have to look out for when choosing a delivery service provider. 

1. Delivery Speed

Delivery speed will be one of the most important metrics when choosing a service provider. The entire reason you are switching to a delivery service is to offer expedited shipping to your customers. This metric is equally important for national as well as hyperlocal deliveries. 

If you are looking for a domestic delivery partner, you will want a delivery service that can provide expedited services like next-day delivery or 2-day delivery. Hyperlocal businesses will look for shorter time frames like 2-hour or same-day delivery.

2. Serviceability

Not every carrier can deliver to every pin code in the country. Each carrier has a list of serviceable pin codes on its website. You will have to check this list to ensure that all the pin codes you currently deliver to are on the list. Along with this, the list should also have the pin codes of the region you plan to expand into in the near future so that you do not have to look for a delivery service again. 

3. Customer Service

Shipping delays are a part of the logistics process. What matters is how a carrier responds to it. The inconvenience of these shipping delays is significantly reduced if your provider has responsive, knowledgeable customer support. This will not only reduce the panic in the system due to the delay but also improve escalation and resolution times. These responses can help you reduce the psych-out on the buyer’s side and reduce your order cancellation rate. 

4. Specialization

If your products are prone to damage due to weather or temperature change, you need to take special care while shipping. The delivery service provider you choose should have the capability to safely transport and store your product. Along with this, specialized delivery services like same-day, next-day, and hyperlocal delivery are the cherries on the cakes. Delivery Service Providers have an established expedited shipping process, and it is likely to be more affordable and hassle-free. 

5. Tracking Capabilities

As you scale your operations, being able to locate a shipment at any given point in time gives you refined control over your delivery supply chain. While most delivery service providers do provide a basic order tracking service, you will need to evaluate your own needs. There are options in the market that take tracking to another level through GPS or RFID technology. 

6. API Integrations

API platforms can be found in each and every backend business process. Integrating these APIs into your or a unified system may not always be easy. Various delivery services have pre-existing delivery integrations with popular ecommerce platforms to make things easier for you. These integrations will allow you to simplify the shipping workflow. If the carrier does not have pre-existing, it should at least have proper integration documentation and support.

Conclusion

DaaS is an ideal solution for newer businesses as well as seasoned businesses. Newer businesses can use the on-demand model to skip the technical as well as financial hassle of setting up a fulfillment operation. Seasoned businesses can use this model to test and expand into newer markets without investing too much capital and resources. 

FAQs

1) What is the key difference between DaaS and 3PL services?

With a 3PL, you will have to enter into a contract with the carrier regarding the order volume you process through them for access to shipping and delivery services. On the other hand, DaaS will simply provide access to a virtual delivery fleet and delivery services that will be tailored to meet specific delivery requirements.

2) Who can use services from DaaS?

Delivery as a Service is useful for merchants from every sector that do not want to go through the trouble of setting up their own fulfillment system in-house. It is commonly used by restaurants, grocery shops, and dairy farms to set up a local fulfillment setup. Along with this, it is used by e-commerce merchants to provide expedited deliveries and test new markets.