Shipping packages can create costly and logistical dilemmas for small business operators. However, creativity and knowledge can go a long way to streamline your shipping and minimize costs while maintaining high customer satisfaction.
By integrating some of the tips below, you can create a more cost-effective and easily manageable shipping strategy to help your growing business thrive.
1. Use Appropriate Packaging to Keep Your Items Safe
One rule of thumb is to keep two inches of padding between all parts of the item and the shipping box. Another rule of thumb is to pack items to survive a six-foot drop. You can use bubble wrap or large, air-filled pockets to provide enough cushion and protection without increasing shipping weight.
Speaking of weight, find ways to keep shipping weights down, and whenever you can, keep package sizes under 12 inches per side. Otherwise, you may get hit with a dimensional shipping fee, which could double your shipping costs.
2. Invest in Shipping Software or Services
Save money and time by purchasing shipping through online sites that buy at bulk rates and pass the shipping discounts on to you.
You can also contract with courier or fulfillment companies. This type of logistics company can provide drivers for local package deliveries, warehouse storage for items that need to ship on a specific date, and in some cases, order fulfillment.
Third-party logistics companies offer solutions that save time and money on labor that you do not have to keep on your payroll and a warehouse that you don’t need to rent. These companies also typically offer expertise when you face challenges about packing an unusual item, getting a package to its destination on time, and other common shipping issues. Using one of the premier software solutions in this area such as Verizeal will likely mean there is a specific software feature for dealing with unusual or hazardous items too, which can streamline the process and reduce reliance on customer support. This will reduce lag time in fulfilling shipments and reduce complaints from customers. Software can also automate and simplify the tracking or storage processes of order fulfilment, which can free up valuable employee hours for other operations.
3. Compare Shipping Rates Across Carriers
Look for the best deal since each carrier has its strengths. Some might provide lower-cost ground service that arrives in a week but can’t compete on overnight shipping rates. Other carriers are set up for quick response and can provide overnight shipping within a specific area for a very reasonable rate but don’t provide any slower services. The more items you ship, the better you will know which carrier fits your shipment’s needs.
Surveys have shown that many customers abandon online shopping carts once they see the shipping costs. Consider offering flat-rate shipping to customers and build any overage into product prices if necessary.
4. Use Tracking Information Consistently
Use tracking codes for all shipments, and use delivery confirmation when available. You may also want to institute a policy of purchasing a signature confirmation service for any shipped item that exceeds a specific dollar amount, such as $100 in value.
Shipping companies typically offer insurance, but if the carrier has proof that they delivered the package, yet the customer says they did not receive it, the sender absorbs the loss.
Good customer service mandates using tracking numbers whenever possible so buyers can trace their packages in the shipping system, especially if the item becomes lost or was delivered to an incorrect address.
Consider insurance, delivery confirmation, and signature confirmation services to reduce business losses from items destroyed during shipping, lost packages that never show up, stolen packages, and items that a buyer claims they did not receive.
5. Use a Shipping Scale for Every Item
Weigh items before offering them for sale. Nothing is worse than having an item returned to the sender because it did not have enough postage applied.
Another product weight issue comes up when selling items with a decent profit margin, only to find out the entire profit, and more, was spent paying for shipping. When you calculate weight-based shipping upfront, and shipping costs are accurately factored into the product’s price or charged separately, your business and the customer both win.
6. Explore Alternate Shipping Options
Offer more delivery options and higher customer satisfaction. You could include same-day deliveries within a specified range or hire bike couriers to handle deliveries within hours, especially if your company sells perishable products or deals with time-sensitive items. You can also offer local pickup for customers who live nearby.
Consider offering expedited shipping, faster handling times, discounted shipping for customers that combine orders, and stock eco-friendly packaging to appeal to environmentally conscious customers.
7. Consider Outsourcing Your Shipping
Consider using an order fulfillment company. This type of business will warehouse your items. When it receives a sale notification, the company’s employees will pick and pack the order, apply the shipping label, and transit the package to the shipping provider.
Fee structures may vary, but you may pay a handling charge for each package, shipping, and in some cases, another fee that covers customer service provided by the fulfillment company. You can also provide the company with your branded packing materials, even though items ship from their warehouse.
8. Create Clear, Detailed Policies for Your Internal Shipping
Set up workflows to prevent errors and miscommunications. Establish standard packing practices, handling deadlines per package, and other policies that fit your business.
Many parts of the shipping workflow can be automatically captured in a shipping software platform by generating and printing the shipping label. A simple barcode scanner can input order data and track orders before they leave your premises.
9. Offer free shipping and other promotions
During the year or busy seasons such as holidays, larger, more profitable orders and multiple items shipped in one package can reduce shipping costs. Consider additional promotions throughout the year as incentives for customers to follow you on social media, for example.
10. Consider Third-Party Insurance
Investigate other types of insurance for your packages. Most carriers offer no-cost insurance for items with a declared value of up to $100. However, if you often sell items that exceed this value or ship a high volume each month, you have more exposure to lost, damaged, or stolen packages than the average business.
Third-party insurance can save you a significant amount of money and typically offers a broader range of coverage. Carriers offering free coverage might decline your claim if the item was damaged due to a natural disaster because it was perishable or because of insect-related damage. Making a successful claim is often much more manageable with third-party insurers.
Conclusion
Shipping is an essential part of operating a small business, and its complexity means that you can find plenty of ways to reduce costs and streamline your shipping strategy. By taking advantage of the above suggestions, you can reduce costs, increase customer satisfaction, and create a competitive advantage for your growing business.