THE REAL PRICE OF A “FREE” TMS
Once upon a time, to use software, you actually had to buy a physical copy and install it to your machines manually, one by one. Even with the early stages of the internet, it was faster to have a CD with the program than it was to attempt to download it over dial up.
That’s not the case anymore.
Now, we can download programs in a matter of minutes, connected wirelessly to a network within our home or office.
Programs no longer need a physical package or CD to be installed. In fact, it’s now rare for a program to even have a physical copy – sure, one could be made, but…why?
This new ease of distributing your programs happened right alongside a trend of using software to solve problems and manage more systems. Computers are no longer just a way to manage inventory, perform calculations, or provide word processing capabilities: a modern business can’t exist without the full gamut of software capabilities available now.
As we’ve become more dependent on software to help us run our business, enterprising folks have come up with numerous options for providing that software. Transportation Management Systems, for example, make it possible to do in one system what used to require many systems to manage.
FREE ISN’T REALLY FREE:
While in the days of purchasing physical copies of software, it was considered normal to pay for that software, with the new model of purchasing software online, expectations have changed. In many industries, there’s free software options for just about any task you want to complete – from marketing, to accounting, to project management, and even with a TMS.
The question to ask is whether or not the free versions really offer you enough features for your business needs. Many do, at a basic level, provide at least some of the services you’re likely to need.
There’s a reason so many software companies offer free versions, or a free trial: it’s for their benefit, not yours.
Offering a free trial or free version of a product serves two purposes:
- If it’s a new product, they can test the market for their software before they invest in actually making it a fully functional, complete solution. People using free software are more likely to be accepting of bugs, problems, and poor customer service – it’s a low investment for a potentially huge return.
- Human nature is to avoid change – so once customers become used to using their product, the opportunity to upsell them to something they pay for becomes much easier. Need an additional feature? Why not just pay the fee, and keep using the system they’ve already been using?
When a company puts out free software, it’s important to know that it’s not really free. They’re either using it as a carrot to get you accustomed to using their software, or in return for learning information about you, their target customer.
Free software is often crippled somehow. If it’s being used to test a market, it’s naturally not going to be a complete solution – why invest in something that may not find a market to be sold to?
If it’s being used to entice you into using the full product (often at a much greater cost), it’s also natural to not include the full range of features. If you got everything you need from the free service, why would you pay for the upgraded version?
Now, that’s not to say all free software is part of a conspiracy aimed at duping you into parting with your money. There’s quite a few free options for many services out there that have great features that a small business can use.
But there’s no business-oriented free software out there created out of the goodness of someone’s heart to help your business succeed.
EVERYONE’S GOTTA PAY THE BILLS
The thing about free software is that it can’t ever really be completely free – not if the person who made it wants to pay their bills.
Hosting services cost money. Development costs money. Building the website costs money. The better looking the website, the sleeker the program, the more money it cost to build it.
And yet the company is still offering their tool for free? Where did the money to build it come from? Why spend the money on something they’re just going to give away?
It’s naïve to think that they aren’t getting something out of it. The question is – what?
Are you entering your email into a database they use to market a higher cost service? To actually get additional features (such as managing documents, load management, or logins for all the users at your company), does it cost an additional fee?
How much more does it really cost to make that “free” service useful for your company?
We’ve discussed ways that business owners often get a little blind to how much a tool costs them in ways besides just the money paid for the service. If it’s not saving you significant amounts of time, or if you have to pay for multiple services to make up for what your primary service lacks, are you really saving all that much money?
It’s also worth considering the company providing the free services: if they aren’t charging, where do they get the money to pay for updates? New features? Customer service?
Are they skimping on those areas to save a few bucks and continue to offer a free version of their product?
Do they make up for a lower cost monthly option by charging you for every call you make to customer support?
Did they cut corners by outsourcing their coding and development to another country? Who actually wrote the code that enables your business to succeed – someone who’s worked in or with your industry for years, or someone in another country that’s just following a checklist?
Who do you think is likely to create a more user-friendly product? The person following a checklist with no understanding of the industry, or someone who’s helped users for years, and strives to create a product as useful for them as possible?
FREE ISN’T NECESSARILY BAD
While it’s worth remembering that free software isn’t created out of a sense of providing a top tier service for the greater good, that doesn’t mean a free software solution is entirely useless.
You can probably benefit from free options if:
- Your company is small – only one or two people (so you won’t need multiple user accounts or tiers of permissions)
- You don’t process many loads – if you’re handling only a load or two a day, it’s easier to do a lot of the work manually, so the time saving aspect isn’t as important.
- You don’t need to access information from other services –load boards, mileage makers, carrier qualifying services, credit card processing services… the list goes on and on. If you’re okay with looking up this information from each service manually, such as when you only handle a few loads a day, then this won’t matter as much to you.
- You’re using other free services that don’t integrate with most tools anyway – free invoicing software, accounting software, or other types of free business management tools don’t integrate with many TMS options anyway. Why pay for a TMS that integrates with Quickbooks if you’re not using the program?
- You’re happy with your current business size and don’t plan to grow – why use a tool that allows you scale up if you don’t have any intention of scaling up anyway?
- You only need simple reporting tools – your customers don’t want or care about seeing greater details into their shipments, and you don’t provide auditing services. If you don’t have a need for advanced reporting, why use a tool that provides it?
When you’re a smaller company with a smaller revenue stream, every penny matters. That’s when free becomes the most helpful – you don’t have the budget or wiggle room to afford a higher quality option.
If you’re trying to grow your business, however, you need to consider a very important trade off: at what point is the money you save in a free tool worth the increased amount of time and inconvenience it takes to make that tool (or tools) work?
WHEN PAYING FOR SOFTWARE BECOMES WORTH IT:
Every business reaches a point where the pains of dealing with something that’s “good enough” is no longer worth the tradeoffs you’ve been accepting with lower cost.
At that point, it becomes worthwhile to spend the time to decide what matters most to your company. That all-important consideration: cost vs value.
What features do you need to become more efficient? The less time you spend per client to book them and get their needs taken care of, the more profit you make per shipment.
So what do you need to make the process of quoting and booking shipments more efficient?
Do you need documents to be automatically associated with the customers or shipments they apply to?
How quickly can you generate labels?
How much time is spent double entering information into multiple invoices, labels, or accounting?
Can you compare rates among your carriers in a single screen?
How quickly can you do something as integral to your business as finding the right carrier to haul a load – generating revenue for your company?
How easily can you apply tariffs to your different service areas?
How easy is it to create custom tariffs? Can you apply them to multiple carriers, or select only specific groups?
Is the tool easy enough to learn that the employees who were initially trained with it are able to teach new employees how to use it?
What’s the ongoing customer support like? Do you get charged every time you call to ask for help?
Can you manage everything you need in one window, or do you need to have multiple windows open to do the tasks you need to do?
Which of these things matter the most to you? Which ones are need to have, which are nice to have, and which ones could you care less about?
Prioritizing the features and needs that you have for a TMS will help you as you shop around for options. Check to see if the TMS you’re using offers the services you want or need as standard options, or if you’ll need to pay extra for full capabilities of the software.
SELECT THE TMS THAT MEETS YOUR NEEDS
There’s no one-size-fits-all option that works for a logistics company at every stage of its development – at least, not if its starting completely from scratch, and not as a free service.
If your business is starting with no current customer base, and you’re struggling to make ends meet, then a free option may be your only option.
On the other hand, companies with a bit of a budget have the luxury of shopping for software that does go above and beyond their simplest needs. They can look for a tool that will provide the basics, as well as the flexibility for them to grow and provide more value to their clients as their clients demand more features and services.
Do you need more than just the bare minimum?
Do you want to work with a company dedicated to solving your problems – one that isn’t going to squeeze every penny out of you for every support call or question you have?
What features really matter to you and your business?
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