Whether you ship a small batch of products weekly or dispatch bulk orders every day, working with the right shipping company can make a massive difference in your bottom line.
This guide is meant to help small businesses navigate the complexities of shipping so that they can send products to customers efficiently and affordably.
What Shipping Challenges Do Small Businesses Face?
One common issue is high per-unit costs. These occur due to limited shipping volumes. Lower volumes mean less negotiating power and higher expenses per item shipped.
Businesses also need to offer a range of shipping options to meet diverse customer expectations. However, this often makes your systems harder to manage. If you want to remain profitable, balancing the need for fast delivery against the high cost of fast shipping services is a must.
Expanding into international markets introduces another layer of complexity. Businesses need to navigate customs and postal regulations, which can lead to delays and increased delivery costs. If you intend to enter an international market, keep up with ongoing regulatory changes to avoid penalties and ensure timely deliveries.
To overcome these challenges effectively, businesses need to identify a service that aligns precisely with their needs, customer expectations, and budgetary constraints. That’s why the first step in choosing the right courier service is to make a list of the shipping challenges your business faces.
Here’s how to create your list.
- Brainstorm a list of all the challenges your business is facing. These might be related to things like cost, delivery speed, customer satisfaction, and international relations.
- Write them all down on a piece of paper.
- Order the items on your list by impact. The challenges that impact your ability to do business the most belong higher on the list. Smaller challenges belong lower on the list.
When you have your list of challenges in hand, use the rest of this guide to determine how you can overcome them.
How Can Businesses Optimize Shipping Costs?
Shopping carefully, negotiating with carriers, and choosing affordable packaging are all viable ways to reduce shipping costs. Small businesses should also make sure they’re offering shipping services that align with their financial goals.
Compare Prices
To cut costs, compare shipping rates from various shipping companies. Research and compare shipping prices from carriers like USPS, DHL Express, and regional services too.
If you want to work with a large courier, use online tools like this calculator from CoolParcel to input package weight and dimensions and see rate comparisons.
If you want to work with a specialized courier for something like pharmaceutical or medical deliveries, use tools like Yelp and Google to find and compare options near you.
Negotiate with Carriers
Many small business owners don’t realize that you can often secure discounted shipping rates based on your order volume or potential business growth.
Don’t hesitate to negotiate with carriers. Starting discussions about volume discounts or flat-rate shipping options is a great way to measure a potential courier’s level of customer service. It also lets you forecast how much you might spend with them over time.
Match Service Levels With Your Business’s Needs
Not every shipment needs to arrive quickly. Routinely using expedited services like Priority Mail Express for deliveries can quickly cut into your profit margins.
Think about the urgency of each shipment and select a service provider that offers a balance between speed and cost.
For less urgent shipments, slower options can save money.
For international shipping, choose carriers known for competitive rates. They’ll understand the intricacies of customs processes and help you avoid delays and extra fees.
Choose Affordable Packaging
Your choice of packaging heavily affects shipping costs. Ideally, you should choose lightweight, sturdy packaging that protects your products without adding unnecessary weight.
Eco-friendly materials are often less bulky, which helps you save on dimensional weight charges.
Buying your shipping supplies in bulk is another fantastic way to save. Suppliers normally offer shipping discounts for large orders, so estimate your needs and buy accordingly.
Use standardized packaging sizes whenever possible. This will streamline your packing processes and reduce the need for custom packaging solutions, which are more expensive.
You should also make sure your team knows the best practices for efficient packaging. Choosing the right package size and materials for the items you ship will minimize travel damage and shipping expenses.
What Should You Consider When Making Strategic Shipping Decisions?
If your goal is to cut shipping costs, there are other factors to consider aside from price, service level, and packaging. Think about how you can optimize logistics and whether you need to use multiple carriers when deciding who to work with.
The Impact Of Logistics On Shipping Costs
Effective logistics management is one of the simplest ways to control costs in shipping operations. Logistics includes everything from the ordering and storing of supplies to the actual packaging and delivery of goods.
To refine your logistics and improve cost-efficiency, here are a few practical strategies.
Leverage Your Order Volume
Leverage your order volume to negotiate better rates with couriers. Schedule regular reviews of your shipping volumes. Use your metrics as leverage when asking for discounts. If you can show a consistent or growing volume, you may be able to secure more favorable terms.
Offer Multiple Delivery Speeds
Not all shipments need to be rushed. Analyze the urgency of each order and tailor your shipping methods to match. Then offer a range of shipping speeds to cater to different customer needs. This will avoid the high costs that come with speedier delivery options when they are not necessary. It also lets you work with multiple providers if they can provide you with better pricing.
Optimize Packaging
Choosing the right packaging isn’t as simple as finding something cheap that gets your product from point A to point B. It’s often tempting for small businesses to cut corners on packaging to save upfront, but the long-term costs of such decisions are high. Poor packaging can damage products during transit. This results in customer dissatisfaction, product returns, and the need for replacements. All of these things increase your expenses and harm your brand’s reputation.
Invest in quality packaging that provides solid protection for your products. Make sure each item fits snugly within its package to prevent movement that could cause breakage.
This approach might mean an initial investment in better materials, but it pays off by drastically reducing returns due to damage.
To assess the effectiveness of your packaging, monitor feedback from customers regarding the condition of received items. If you notice a pattern of damage complaints, it’s a clear signal to review and improve your packaging strategy.
Remember, the goal is to deliver your products in perfect condition and reduce product returns. By optimizing your packaging, you’ll also enhance your customers’ satisfaction and trust in your brand.
Using Multiple Couriers To Maximize Benefits
Diversifying your shipping options with multiple couriers strengthens your shipping strategy by offering flexibility. Different couriers excel in different areas. These can include cost, speed, or global reach. Using a mix of couriers means you are not overly dependent on one service, which might not always align with your needs.
It also facilitates competition between them, which you can use to your advantage. When your courier is worried you’ll leave for a competitor, they’re more likely to offer discounts that benefit your business.
Working with multiple couriers also reduces risk because you have other options if your main courier suddenly shuts down or experiences disruption.
Whether To Choose A Regional Or National Courier
When deciding between regional and national carriers, weigh the pros and cons to determine the best fit for your business. Regional carriers are often less expensive for local deliveries. They tend to offer more personalized services, and they provide quicker turnaround times for local deliveries.
That said, they often have limited reach. A regional courier isn’t suited for extensive national or international shipping.
On the other hand, national carriers support huge shipping networks. They generally offer advanced tracking capabilities too, but at the tradeoff of higher delivery costs. And because major carriers are so large, negotiating with them isn’t as easy as it is with smaller providers.
Choose who to work with by looking at factors like your shipping volume, the geographical distribution of your customers, and specific shipping needs.
For example, if you often ship across the country or require sophisticated tracking, a national courier like USPS or DHL Express might be more appropriate than a local one.
If your deliveries are predominantly local, a regional carrier could offer more cost-effective and faster services.
What Technology Enhances Shipping Operations?
Utilizing the right software tools lets small businesses enhance efficiency, reduce errors, and ultimately lower shipping costs while increasing value to their customers. You can use software to track packages, manage inventory, and simplify the way you interact with various couriers.
Shipping and Logistics Management Platforms
Tools like ShipStation, Shippo, or EasyShip integrate with multiple shipping companie. They allow small businesses to manage all their shipping needs from a single dashboard.
These platforms offer features such as bulk label printing, automatic rate comparison, and integration with e-commerce platforms. Businesses can quickly compare rates across carriers, choose the cheapest shipping options, and print shipping labels efficiently by using these tools.
Inventory Management Systems
Software like Cin7 provides robust inventory management features that sync with shipping operations.
It helps track inventory levels, manage orders, and ship in the most efficient manner possible. This synchronization reduces carrying costs and minimizes shipping delays, so products are ready to ship when needed.
Route Optimization Software
For businesses that work with couriers and manage their own fleets for local delivery, tools like Route4Me or OnFleet can optimize delivery routes to save time and fuel.
These applications consider traffic patterns, delivery windows, and vehicle capacity to propose the most efficient routes, significantly cutting down on delivery times and costs.
If used properly, you may be able to reduce your reliance on third-party couriers
Freight and Parcel Auditing Software
Platforms such as Share a Refund or AuditShipment analyze shipping invoices to detect overcharges and service failures so that businesses only pay for the services they actually receive.
This can lead to serious savings, especially for businesses that ship in high volumes.
E-commerce Integration Tools
Solutions like WooCommerce for WordPress or Shopify’s built-in shipping suite help small businesses streamline the process from order to delivery. These tools often include features that allow customers to choose their shipping options, automatically calculate shipping costs, and track their deliveries, enhancing the customer’s shopping experience and saving the business valuable administrative time.
By integrating these technological solutions, small businesses can streamline their shipping processes, from comparing rates and printing labels with USPS or another shipping service, to ensuring timely deliveries to the final destination. The use of these tools not only helps in managing day-to-day operations more efficiently but also provides scalable solutions as the business grows.
How Do I Improve Customer Satisfaction With Deliveries?
Customers expect fast delivery and how quickly a package arrives can make or break whether they reorder or recommend your business. Using shipping companies for small business (like USPS Priority Mail) or courier services that offer express delivery can help meet those expectations.
Make sure to clearly state expected delivery times on your shipping labels and during the purchase process. This sets customer expectations.
And consider offering something like Priority Mail Express International for those that need even faster delivery – especially for international orders.
Using tools that simplify shipping and provide real-time updates can also increase customer satisfaction by keeping them informed until the moment their package arrives at their door.
Eco-Friendly Shipping: The Benefits And Customer Appeal
More consumers value sustainability, so it’s becoming important for businesses to adopt eco-friendly shipping practices. Sustainable shipping isn’t only about reducing environmental impact. It’s also a business decision that can boost your brand image and appeal to a wider customer base. Here are a few suggestions to increase sustainability.
Choose Sustainable Materials
Use recycled or biodegradable packaging materials and minimize the use of plastics in your business shipping process. Even small changes like using flat rate boxes made from recycled materials can make a big difference.
Partner with Green Couriers
Many courier services now offer eco-friendly options whether through carbon offset programs or using vehicles powered by alternative fuels. Partnering with these services shows you care about sustainability. For example, GO₂ Delivery offers carbon-neutral courier services to help you show customers you’re committed to cutting emissions.
Engage Your Customers
Offer incentives for customers to choose slower shipping options, which are often more eco-friendly. Slower shipping reduces the need for air transport. It also allows for efficient load consolidation, which reduces the carbon footprint.
By focusing on sustainability and delivery speed, small businesses can exceed customer expectations and help the environment at the same time. Online shoppers who are looking to support brands that are like-minded appreciate these efforts. Use them as a way to stand out as a responsible, forward-thinking company with eco-conscious consumers.
How Do I Reduce The Cost Of Shipping Returns?
Returns are part of doing business, especially in e-commerce. A good returns management strategy minimizes costs and increases customer loyalty primarily by simplifying the return process and optimizing delivery systems. This makes it easy for your customers to return products. Here are tips to help you optimize the returns process and keep your shipping costs low.
Optimize Return Shipping
Offer return shipping options that balance speed and cost. Options like the USPS flat-rate box can be a cost-effective solution for small items. This controls costs and simplifies the logistics of managing returned merchandise.
Analyze Returns
Review returns regularly to identify recurring issues with products or shipping methods. If you find issues, they could be caused by many things. Focus on areas like the build quality of your products and packaging durability. Fixing these issues at the source can increase returns over time and reduce both product loss and returns.
Remember: the goal is to simplify, save, and build customer loyalty by aligning your shipping to your business and your customer’s needs.
Now, go check your shipping strategy. Review your current shipping solutions, consider the points above, and see if there are opportunities to save, speed up, or improve customer satisfaction.
Still unsure of where your small business shipping solutions need improvements? Schedule a call with GO₂ Delivery to get a free analysis of your delivery systems. We’ll help you optimize your shipping logistics and find a solution that lets you increase your delivery capacity while cutting costs.
