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Direct delivery: definition & important aspects for buyers
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Direct delivery in a nutshell:
Direct delivery describes the delivery of goods directly from the manufacturer or supplier to the end customer, without intermediate storage in the company's own warehouse. For the purchasing department, this means reduced storage costs and shorter delivery times, while at the same time minimizing handling and the associated risks.
Example: An automotive supplier agrees with its steel supplier on the daily direct delivery of 2.5 tons of special steel to three production sites, which reduces warehousing costs by EUR 45,000 per year.
Contents
What is direct delivery?
Direct delivery is a logistics and procurement strategy in which goods are delivered directly from the supplier to the end customer or to the place where they are needed, without intermediate storage or transshipment stations. This model enables faster and more efficient delivery as it shortens the transportation route and reduces the need for warehousing within the company. Direct delivery is often used to shorten delivery times, save costs and streamline the digital supply chain.
Core elements of direct delivery
Significance for purchasing
Direct delivery offers numerous advantages for purchasing. It reduces costs through lower storage and transportation costs and increases the efficiency of the supply chain. Buyers can improve responsiveness to customer requirements and shorten delivery times through direct delivery. It also promotes closer cooperation with suppliers, which leads to better business relationships and negotiating leeway.
Whitepaper: Direct delivery - optimizing the supply chain through efficient delivery routes
Direct delivery: from traditional distribution to drop shipping
Direct delivery has revolutionized the way goods get from the manufacturer to the end consumer. Building on the theoretical basis of direct delivery, there is a clear shift in practice from traditional distribution channels to more efficient models. This change is of practical importance as it enables companies to optimize supply chains, reduce costs and respond more quickly to customer needs. The need for flexibility and efficiency has accelerated the transition to new methods.
Old: Traditional distribution
Traditional approach: In the traditional distribution model, products are delivered from the manufacturer to the retailer's central consignment warehouse. From there, they are distributed to regional stores or intermediaries before the goods finally reach the end customer. This process is characterized by multiple stock transfers, increased inventory levels and longer delivery times. In addition, higher costs are incurred due to inventory ratios, personnel and transportation between the various stations in the supply chain. The lack of flexibility can lead to overstocking or supply bottlenecks, which limits the ability to react to market changes.
New: Drop shipping
Drop shipping: The modern approach of direct delivery, known as drop shipping, eliminates the need for retailers to hold their own stocks. Instead, the retailer transmits the order data directly to the manufacturer or wholesaler, who ships the goods directly to the end customer. This innovation eliminates the need for intermediate warehouses and additional transportation routes. The integration of e-commerce platforms and automated ordering systems enables a smooth flow of information and real-time tracking. Practical benefits include a reduction in storage costs of up to 50%, shorter delivery times and increased product variety without additional capital expenditure. This enables companies to react more quickly to market analysis and increase customer satisfaction.
Practical example: Direct delivery in the electronics trade
A large online electronics retailer has implemented the drop-shipping model to expand its product range and save costs. By working directly with manufacturers, the company was able to offer over 10,000 additional products without having to build up stock itself. The delivery time to customers was reduced by an average of two days. Within the first year of introducing the model, sales increased by 35%, while inventory costs fell by 40%. Customer satisfaction increased noticeably, which was reflected in positive reviews and repeat purchases.
Conclusion on direct delivery
Direct delivery is a forward-looking logistics concept that enables significant efficiency gains and cost savings by eliminating intermediate storage. Its success depends largely on precise planning, digital integration and reliable supplier relationships. Despite certain challenges such as increased coordination effort and process dependencies, the strategic advantages clearly outweigh the disadvantages. With advancing digitalization and AI-supported solutions, direct supply will continue to gain in importance.
