As a new e-commerce startup owner, navigating logistics can feel like scaling a mountain. The dilemma of whether to opt for a shipping aggregator or a direct courier partner looms large and creates a huge impact on the journey of e-commerce and D2C businesses.

In this blog, let’s dive deeper into the debate about logistics aggregator vs delivery partner and figure out which logistics solution would suit your business better.

What is a Shipping Aggregator?

Shipping aggregators like Shipway are a bridge that connects your business with various courier services. With such courier aggregators you can easily access several courier partners in a single platform.

Shipping aggregator partners with multiple courier services (both big and small) to give your business the flexibility to choose different options for your variety of needs.

What makes this a wise decision for your company, then? To begin with, the goal is to preserve your investment. Aggregators can negotiate excellent rates with courier providers because they work with large volumes of different types of businesses.

It’s an economical decision to expand your company further because of these savings. Plus, you’re not putting all your eggs in one basket when you use an aggregator for assistance.

Your products may be easily delivered to more locations because you can access a large network of couriers.

A shipping aggregator like Shipway opens up new possibilities for your startup business. The benefits are clear:

• Cost savings through negotiated rates.
• Centralized platform for streamlined deliveries
• Extended reach to diverse customer demographics

So, when thinking about what is better for your e-commerce business shipping aggregator or courier service, think about what your business needs most. The cost-effectiveness, flexibility, and broad reach of an aggregator are in its favor.

About Direct Courier Partnerships

Choosing between shipping/courier services or logistics aggregators is a big decision for any startup. Going the traditional route and partnering directly with a courier service is a choice many businesses consider.

But what does this really mean for your startup?

When you work with a courier service like Delhivery or DTDC directly, it’s like having a direct line to someone who takes your parcels from point A to point B. This can be great for enough volume as you might get a better deal on rates.

It’s like buying wholesale where the more you buy, the less you pay per item. Plus, there’s a chance to get more personalized attention. Your courier might know your business needs inside out to provide services just for you. However, this process has its limitations as well. Direct partnerships often require a commitment of sending a fixed number of couriers every day or every week.

For a startup, predicting how many orders you’ll get can be as tough as predicting the weather. What if your business grows and you want to reach customers in farther corners of your country or even abroad? You will find it difficult with a single courier partner to cover all the areas you need.

While direct courier partnerships may give lower rates initially along with a dedicated service, they also bring challenges like minimum order commitments and limited reach. This can be a bit of a problem for startups to balance the need to grow and expand.

Why Startups are Taking the Shipping Aggregators Route?

As we have already discussed, choosing between logistics aggregators vs delivery partners is crucial. Recent data highlights that Amazon aggregators got funding of $68 million in May 2023.

This shows a growing trend where more startups are going towards shipping aggregators. Let’s find out the main reasons for the same.

1) More Location Coverage
Using courier aggregators means your products can reach more places. This is because you’re using the network of not just one, but several couriers. So, you can send your goods to lots of different locations, reaching more customers all over the world.

For instance- Shipway, a courier aggregator, covers over 29,000+ pin-code locations in India alone. This extensive coverage ensures that your products can reach even the most remote areas, allowing you to tap into a broader customer base and expand your market reach significantly.

2) One-stop Shipping Solution
Courier aggregators offer a platform where you can manage both new orders and returns easily. This makes your job much simpler since you can handle everything by yourself quickly.

3) Handling Returns Made Simple
When you need to manage returns, having multiple couriers to choose from makes life easier. You can pick the best one for the job directly on the platform, without worrying about whether they can deliver to a specific area.

4) Choosing From Many Couriers
Courier aggregators like Shipway and Shiprocket work with lots of courier services, sometimes more than ten. This gives you the freedom to pick the courier that suits your business for each package. It can be based on where it’s going, how much it costs, or even which one your customers prefer.

5) Flexible Payment Methods
The difference between a courier company and a courier aggregator is that the former has limited payment options. However, you can offer your customers multiple choices of paying with a courier aggregator.

6) Easy Website Connection
You can link up the courier aggregator’s system to your online shop or marketplace. This is done through something called APIs, which automatically take order details from your site to help you ship directly from their platform. It makes sure you don’t miss any orders and keeps everything running smoothly.

7) Smart Courier Selection
Some aggregators have special software that picks the best courier for your shipment using data analysis. This is great when you can’t decide among many options. It picks the best one based on factors like delivery success rate. So, while comparing a shipping aggregator or courier for startups, it’s wise to go with aggregators.

8) Quick Cash Handling
Courier aggregators provide cash-on-delivery (COD) payments faster than traditional couriers. This means your money isn’t tied up for long and you can reinvest the same in your business.

9) Free to Start
There’s no cost to sign up or use the platform itself initially. You only pay for the shipping fees when your order is generated. This means you can offer your customers a great shipping experience without any extra charges.

10) Smart Technology for Better Shipping
In choosing the logistics aggregators vs delivery partners dilemma, you can rest assured that aggregators use smart tech to give you more features. You get things like choosing the best courier, showing expected delivery dates, and more.

This helps you make quick decisions and improve your customers’ delivery experience. You get detailed reports about your shipments, including daily updates.

Tips to Figure Out the Right Selection Between an Aggregator and Courier Partner

Deciding what is better for my business shipping aggregator or courier service? Here’s a simple guide to figure it out:

• Understand Your Shipping Volume: Look at how many items you’re sending out. If you’re just starting or your volume is low, an aggregator can give you more flexibility without the need for big commitments.
• Know Your Reach: Think about where your customers are. If they’re spread all over or even internationally, an aggregator can help you cover more ground easily.
• Check Your Budget: Money matters for startups the most. If you’re tight on budget, aggregators often offer competitive rates because they negotiate bulk deals with couriers. But, if you’re shipping a lot, direct couriers might give you better rates based on volume.
• Specific Needs and Services: What special requirements do you have? Some products need special care or faster delivery. Compare what services each option offers like tracking or express delivery.
• Long-term Strategy: Think about the future. As your business grows, your needs might change. An aggregator offers more flexibility to adjust, but a direct courier partnership could become more cost-effective over time.

Considering these points can help you make a smart choice to go for a shipping aggregator or courier to fit perfectly with your business plan.

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