Online shopping is quickly replacing physical stores as the preferred shopping destination for consumers. It brings the convenience of not to having to travel, wait on lines, or keep track of physical receipts. With so many advantages of starting an online business, it's important to be aware of new competition online retailers are facing on a daily basis. Competition comes down to many factors including product quality, user experience, product prices, and shipping costs. Online business owners are quickly realizing that shipping costs can be a huge burden from a business standpoint, and can also have a great effect on the decision making process of the consumer.
Increasing the overall shipping efficiency in your business is essential to growing profits and creating a sustainable business in the long run. Here are 4 ways to create a shipping strategy that works for your business, whatever the size.
Add Shipping to Product Cost
Many company owners are unsure of how to reduce shipping expenses in their company. Shipping is essential to getting the product to the customer. One thing that many businesses start doing is adding in the cost of shipping to the product cost. This means that customers still feel like they are getting free shipping, but in reality they are paying for shipping costs through a higher retail price. There are a lot of large companies that have success with this strategy. If you are unsure of this shipping method, try it out for a few months to test the results. Without a drop in sales, this will add money to your profits.
Another way to save money on shipping is to combine shipments. Many online businesses give discounts to customers who order multiple products at the same time. The more a business ships to one place, the less per unit the business will spend on shipping. This is an important concept for online business owners to understand.
One area that many companies need to improve in is communication between their inventory and accounting. It's crucial to stay on top of your inventory and always plan ahead. Using spreadsheets might work for you now, but they're not built to support a growing company. Even if you own a small business, you can still benefit from an Inventory Management System, and increase efficiency at the same. In fact, a company with electronic communication between their warehouse and accounting department can increase business efficiency by an average of 10-15%.
Improve Storage Efficiency
Companies today need to make sure they maximize storage efficiently by simplifying processes, measuring KPI's, and being able to manage fulfillment, or hiring someone who does. You might not even have your own warehouse right now or outsource to any type of storage solution at all for that matter, but as your business grows, not managing your storage space effectively could have a detrimental impact on your revenues. Plan ahead now so you can prevent the headache later.
If you're looking for an expert solution that can do all your tracking, automation, and warehousing for you, book a demo with one of our reps and we'll build the best and most affordable solution for your business, no matter the size. Now that you've got your shipping strategy out of the way, it's time to work on your customer service strategy. Contact us today for more on how to strengthen your strategies and save on shipping.