How can small businesses capitalize on drone delivery technology?
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. Start Small
If you’re keen on integrating this relatively niche technology into your business’ logistics strategy, my recommendation is to start small. Test the product on short distances (and low premium products) first and get educated about regulations in your area to avoid any potential legal action taken against you for utilizing the technology in would-be protected “no-fly” zones.
2. Ask Yourself If You Really Need It
Certainly, it is cool. But you need to be thinking about how it makes a difference in your specific business. Product delivery might be one area. Delivering relevant and targeted ads might be another. But if you have no use for it, it’s just an unnecessary expense.
3. Tout Fast Deliveries
Now local businesses can compete with the logistics abilities of large corporations. Customers can, and will, order local because they will get the products they desire more quickly. Drones could allow you the opportunity to market this capability as a unique value proposition, allowing customers to get products faster, rather than waiting for a product to arrive from somewhere further away.
4. Put Your Warehouse Near a Hub
Drone deliveries as we imagine it today are far from becoming a reality. Instead, a first approach to drone delivery will be large shipments to a central hub and smaller, local deliveries made by drones. By setting up near freight hubs, you will be the first to benefit from faster, same-day drone deliveries, both procuring items from suppliers such as Amazon as well as shipping to customers.
5. Outsource Drone Management
Drone delivery sounds really sexy, but you have to be cautious – there are real logistical risks that can ruin your investment. Drone delivery is a major waste of money if you buy a drone only to have it knocked out of the sky by a red-tailed hawk (which does happen, especially in California). It’s a better idea to outsource to a company like Flirtey, so they’re handling the inherent risks.
6. Set Up in Underserved Areas
Techy metropolises will see drone delivery quickly, but this will be less so for smaller cities and residential areas. By serving these areas first, you could open yourself up for healthy business, and to the possibility of being bought if a national partner does show up in the area.
7. Partner with Other Companies to Share the Technology
While it may be too expensive to adopt as a small business, more local businesses can consider a cooperative model where they share the delivery technology, investing together to build a local delivery service for those within their cooperative.
8. Hold Off, but Be Ready to Be First
A small business shouldn’t be spending hours of their time or money right now thinking about drone delivery. That tech is years away and will be great when it lands. Stay up-to-date on developments, but don’t waste too much time on it. Be ready to invest your time and money early, when possible, to offer a competitive edge.