In modern-day commerce, your closest rivals could be located anywhere in the world, and they could be anything from a small home-based business all the way up to a high-volume operation. As a small business, are you really ever going to get the same shipping rates, savings, and discounts as your larger, higher-volume competition?
Maybe not. However…
There are many different types of shipping software and lots of new ways you can optimize your small business shipping arrangements. In this post, we’re offering you a few key tips on the topic of small-business shipping. With this, we hope to inspire some new practices to help you on the path to lower shipping rates, better customer experience, and, ultimately, higher profits for your business.
Avoid Using a Single Carrier One of the most limiting things you can potentially do for your business is fail to accumulate many shipping options. Be prepared, as there’s a little leg work to do, and you need to have a solid understanding of your key parcel data—not just your volume but also your product weights, sizes, packaging, and any service-level agreement (SLA) requirements.
The more data you have, the more clearly you will be able to articulate your needs to potential shipping partners. You should try to obtain quotes, SLAs, and contracts for multiple carriers, including regional, national, and specialty shipping providers.
Don’t completely rely on any single carrier like UPS or FedEx. There are scenarios where each carrier makes the most sense, and it’s important for you to understand how they can work together.
Yes, it will take time, but in the long run, these efforts will be really beneficial.
Audits While this may not be the most appealing of tasks, it could be exceptionally fruitful in terms of the ROI. If you don’t already have a process in place to check your shipping invoices, then it’s time to get one! When you ship with guaranteed delivery options like overnight or 2-day, you’re entitled to a refund when they’re late. But the carriers aren’t going to do this for you.
A regular audit, such as monthly or quarterly at most, might not just reduce your shipping costs but also give you an indication of the service levels from a specific carrier. Either way, it’s a win-win.
Earlier in this post, we mentioned the importance of using shipping technology for your small business. Manual auditing could be time-consuming, but there are also many automated options that can save you time and money! LateShipment.com is just one of many options to consider.
Harness Small Business Shipping Technology It’s safe to say we all use technology in business. However, not everybody maximizes their use of technology in small business shipping. The best shipping software will help you manage your orders, check against multiple carriers for the cheapest shipping option, print labels, track packages, arrange pickups, and more!
Nowadays, all the top small business shipping software companies will offer seamless integrations with most of the popular e-commerce platforms, such as BigCommerce, Shopify, Amazon, Woo-Commerce, and many others.
With intelligent automation working for your business, you can realize a more streamlined, cost-effective, and less time-consuming approach to small business shipping.
Packaging At a time when consumers and companies alike are looking at ways to reduce their costs, reviewing your packaging is another essential task, and it’s something that’s firmly within your control.
According to a recent e-commerce survey, over 70% of consumers aged between 18 and 30 and over 60% of all shoppers state they are more likely to buy products from brands that use sustainable materials. Furthermore, another similar survey demonstrates that consumers tend to have a higher opinion of companies that use paper packaging instead of plastic or other unsustainable materials. The best thing is that eco-friendly packaging doesn’t always equal more expensive packaging, so it’s worth looking into.
Did you know that many carriers now give away free packaging?
For instance, USPS has hundreds of free shipping supplies on their site, as do DHL Express, FedEx, and UPS. All of these are worth a look!
Earlier in this post, we mentioned the importance of getting a handle on your data in order to rate shop across multiple carriers. You can go further by understanding how close your existing packaging is to cheaper rates if you were to make things ½” smaller or ½ lbs lighter.
Free Shipping Alternatives Regardless of the type or size of the products you sell, you might not always be able to afford to offer free shipping across your store. However, there are a few alternatives that you can still consider.
Minimum Order Thresholds One way of incentivizing customers who want free shipping is to set a minimum order value. This tactic often encourages people to order more and pushes up average order values while giving the customer a feeling of value in the process.
Offer a loyalty program with free shipping Many major brands are doing this, but it’s also highly applicable to smaller businesses. For your loyal customers who order from you regularly, offer them the option to pay a small annual or monthly fee in exchange for free delivery.
Consider a flat-rate cost of shipping The applicability of this depends on the size and type of products you sell. However, a flat-rate shipping charge provides customers with complete transparency with their shipping costs, making it easier for them to see the exact cost of their order. In many cases, this also acts as an incentive for customers to place larger orders as they try to take advantage of the fixed shipping cost.
Include the shipping cost in your price By including shipping costs in your prices, you can promote ‘free delivery’ as part of your offering. If you’ve implemented some of the earlier shipping tips for small businesses and optimized your company’s shipping operation, you can still offer value to your customers without having to cover the cost of shipping out of your own margins.
Bonus Tip – Reviews
People trust online reviews. One way smaller shippers can compete with their larger counterparts is by building up a quality online profile with lots of positive reviews. So, if you haven’t already optimized your shipping to include an insert or incentive for leaving a review, then doing so is a great idea!
Final Thoughts With poor or no planning, shipping can end up being complicated and costly, and it can heavily impact your reputation and the overall customer experience. For smaller businesses that don’t have the demand for volume shipping, getting the right partners, processing, and pricing in place is essential.
Online shipping is so much more than an operational process. It’s also an opportunity to build loyalty and improve your customer experience, and it can also be crucial to your profit margins. In some cases, the flexibility and strength of your online shopping options could also help you make a sale in the first place.
We hope you’ve been able to find at least a couple of shipping tips for your small business.
Have a question or want to know more? Let us know!
Shipping can make or break your business. More than 75% of shoppers consider even small shipping costs a deal breaker compared to free shipping.
That means you cannot afford to skimp on it. You have to be intentional with the kind of experience you and your would-be customers will have during the entire process of shipping. To keep your business shipping at the most efficient cost and service, using worthwhile shipping software is a good start.
The options are endless, but the search is worth the effort. Of course, you’ll have to consider your specific business needs to get a platform that serves you best. Other aspects of it can apply to almost every online business out there.
In this article, we’ll be looking at the top 5 concerns you should look into as far as your current shipping platform is concerned.
Take a look.
How Flexible Is It with Integrations?
Your shipping software isn’t the only system in your business. You must stay on top of your current e-commerce platform, manage your inventory, and ensure your books are in order. Think of the daily activities that are essential for the continued running of your business.
A good deal of them will need a platform of some sort, and each one of these platforms must work in harmony with the others. The same goes for your shipping software.
Can it plug into the existing ecosystem without much fuss? Spoiler alert – it should. That’s how you’ll realize its full importance as a tool, which is to make your work easier.
For some very specific integrations, the ideal platform should offer API access so that you can tweak everything down to your requirements.
Another way to make this work is with order aggregation like that provided by eHub. Your shopping cart, marketplaces, and website all connect to it, and it connects to your shipping software. That way, you don’t have to worry about managing many integrations.
Does It Offer Multi-Carrier Rate Shopping?
Customers expect free shipping and getting their products ASAP. They don’t care about the carrier service you use, but you should. Products going to inner zones should be using ground service. Outer zones may need something faster.
The USPS has the best rates for items under a pound—flat rate options. Depending on the package size, zone, and service level you need (how fast does it need to get there?), you need the most economical option. Does your software rate shop across carriers? An effective and efficient shipping program will rely on multiple carriers.
Your customers will be eager to know where their shopped items are. It’s only natural as they’ve paid for them. This is an opportunity for you as a merchant to show how committed you are to satisfying your customers.
What Are Its Track-Trace Capabilities?
Your customers will be eager to know where their shopped items are. It’s only natural as they’ve paid for them. This is an opportunity for you as a merchant to show how committed you are to satisfying your customers.
You can do that through your shipping software.
A good platform allows you to update your customer every step of the way – from the moment the item is shipped to being in transit and finally delivered.
But amid all this, returns are bound to be there. You also want a seamless process on the customer’s part and even your team.
For some platforms, it’s as simple as offering a return portal, printing the return label, and sending the item back to you. And that’s precisely what you’d want.
How Effective Is It in Managing Your Workflow?
As already mentioned, shipping software is a tool, and the sole purpose of a tool is to make your work easier. Part of making work more accessible is streamlining day-to-day operations from the time a customer places an order to the time the item is shipped out.
How good is your current platform with this?
Think of the documentation required in shipping an item – there are a lot of forms to fill and keep up with. Your shipping software should stand in for you. It helps keep all these documents in one place for easy retrieval when needed while eliminating a good deal of errors simultaneously.
Are you printing labels one at a time or in batches? Are you printing pack lists to make it easier to fill orders? Shipping software can be customized to your current process or utilized to make your process even more accessible. One way Essential Hub adds value is by educating, training, and optimizing customer shipping processes based on the platform they are using. Through this method, they save customers 20-30% in time every day. What would you do with an extra 2 hours?
What Are the Available Options for Shipping Rates?
Some platforms have limited options as far as rates are concerned. This means you have to make do with whatever the said platform has to offer.
This is certainly not the best way to go about it.
Having a custom pricing plan will work in your best interest. There are plenty of shipping platforms that offer this option. You should be able to rate shop, load custom rates, and manage your own shipping profile. Essential Hub is connected to multiple software options that do this.
Not every platform sells shipping the same way, but they would all have you believe that they offer the best rates. One way to check this is to take a typical package size, including weight and the exact delivery address, and shop it across platforms. That’s an excellent place to start when evaluating who offers the best rates.
Wrapping it Up
Shipping plays a significant role in most people’s purchase decisions, so ensuring everything runs smoothly should be a top priority for you as a merchant. Shipping software is a tool that will work to save you money, make you more efficient, and improve the customer experience.
Find one that works for your business using these tips. Essential Hub helps our customers evaluate the best software for their needs and how to implement that system best. Find out how today!
UPS and FedEx love to advertise their low carrier charges, hoping to draw in business from e-commerce companies who are none the wiser about a range of additional surcharges and accessorial fees.
Your e-commerce business needs full transparency to minimize shipping expenses. That’s why we’ve compiled this list you need to know about:
For example, research shows that 23,223 of the 41,702 ZIP Codes in the US are being impacted by Delivery Area Surcharges. It equates to over 55% of the country, while 25% of the US population is affected.
This can translate to thousands of dollars in extra fees, which is why you’ll need to pay attention to the small print and not the seductive prices offered by the likes of UPS and FedEx as they aim to get your business in the door.
Accessorial fees are a significant part of the business model for most carriers, so the United States Postal Service (USPS) is often the most economical option if you send packages frequently.
Here are five dirty secrets about accessorial fees and why USPS could solve your eCommerce shipping needs.
1. UPS: A 4.9% Overall Increase in Price for 2020
2020 has been a challenging year for businesses, but there’s been no respite if e-commerce is your model for making money.
UPS announced an average rate increase of 4.9%, effective in December 2019.
FedEx has also recently increased its fees and went a step further by “implementing a temporary surcharge on all FedEx and TNT international parcel and freight shipments beginning April 6” in response to the COVID-19 crisis.
It’s worth remembering that there will always be discrepancies depending on the circumstances of your business, so you could end up paying much more than you’re used to.
They may cite margins and higher costs as reasons for increased fees each year, but there are also numerous surcharges to consider first.
2. Hiding Accessorial Fees
UPS and FedEx make a point of making accessorial fees challenging to understand, and they keep them hidden away in the small print.
Eating up the costs is an accepted part of doing business, but you don’t necessarily have to pay for a service that tacks on more charges than your average budget airline.
Most importantly, you’ll need to work out any additional costs as soon as possible, and they add up more quickly than you might expect.
3. Residential Delivery Surcharges
Residential delivery surcharges are often the most egregious example of accessorial fees.
Let’s say you need to ship a small package to a residential address, as many e-commerce businesses do daily, to multiple homes. As well as the advertised price, a $4.40 ‘residential delivery surcharge’ will be tacked on by FedEx, eating into profit margins that sit at roughly 40% for the best-run companies.
For eCommerce businesses, most packages will likely be sent to residential addresses, while B2B deliveries come with their own set of separate surcharges.
The USPS Flat Rate is an excellent option if you’d prefer to pay a simple set fee with no extra surcharges. Prices start at $7.50, and they have discounted rates for business customers.
4. The Cost of Handling Weight
Everything from package weight to fuel consumption is becoming more expensive for e-commerce businesses that rely on shipping services to get their products to customers.
The UPS Additional Handling – Weight charge is now applied from 50lb rather than 70lb and comes in at $24 per instance. It’ll start to add up quickly if you’re sending heavier items regularly and can eat into your profit margins if you’re not careful.
UPS has also introduced four additional new surcharges for 2020;
● C.O.D
● Signature Required
● Additional Handling
● Peak Additional Handling
Alternatively, the USPS Flat Rate will allow you to ship packages up to 70lb to any state at the same price, which is ideal for smaller, heavier items.
5. USPS – Cubic Pricing and Potential Savings
USPS Cubic Pricing is possibly the best kept secret of all if you’re hoping to lower shipping costs.
High-volume customers can access discounted rates, while it works by calculating the length, width, and height of your package. They offer five tiers depending on the overall cubic size, and it often works out to be cheaper than FedEx, UPS, or even USPS Priority Mail.
For example, a Tier 3 (8” x 6” x 8”) package shipped to Zone 6 would incur a delivery charge of $22.47 if you’re using Priority Mail Commercial Base rates. It drops to just $10.98 with USPS Cubic Pricing, working out as a saving of 51%.
In an ideal world, competition between UPS and FedEx would lead to lower prices and improved services. Instead, they have a stranglehold on much of the market, and they’re not necessarily the most economical choice when you factor in the multiple accessorial fees that are inevitably attached.
As mentioned, you won’t have to deal with residential delivery fees with the USPS, and their flat rates are easy to understand. A competitive shipping program should utilize the advantages of each carrier’s strengths and minimize their weaknesses. You should not be using a single carrier, even if you’re only shipping one product.
Ensure your software can handle multiple carriers to maximize your savings on every shipment you send out the door. The best part is you don’t have to do this alone. With a partner like Essential Hub, you get a competitive shipping program tailored to your needs. Find out how today!
