Sink Or Ship: How Your Small Business Shipping Strategy Determines Your Success

Have you decided on the right small business shipping option for your company? Here’s how your shipping strategy determines your company’s success.

There’s no doubt about it. The “Amazon Effect” has revolutionized the way people do business in the U.S. and abroad. It’s also revolutionized the way businesses handle shipping.

These days, customers want their products as soon as possible, and they don’t want to have to pay extra for them. This presents a lot of challenges, especially for small businesses.

If you don’t have a solid small business shipping strategy in place, you may find it difficult to keep up with retail giants like Amazon. You don’t have to give up hope, though.

Read on to learn about the importance of a good shipping strategy and how it’ll help your company succeed long-term. You’ll also learn some useful tips that will help you improve the way you ship products.

How Shipping Affects Your Bottom Line

The way your business ships its goods, as well as the average amount you spend on shipping, can have a huge impact on your business’s bottom line and ability to be profitable.

There are a lot of ways in which shipping (and shipping costs, more specifically) affects your business, including the following:

Cash Flow

One of the most obvious ways in which a poorly planned shipping strategy can affect your business has to do with cash flow.

If you have to charge your customers high shipping rates, you’ll likely find that fewer people are interested in doing business with you. This, in turn, can lead to fewer sales. As a result, you’ll soon experience a decrease in cash flow.

The same can happen if you decide to eat the shipping costs and offer lower rates to your customers. This still impacts your cash flow and can affect your bottom line in a big way.

Customer Satisfaction

Customers also are more likely to be dissatisfied if they have to wait a long time for their items, or if they have to pay an exorbitant amount (to them) to receive their products.

In many cases, a customer would rather pay a higher price and get free shipping than end up getting hit with high shipping costs during the checkout process.

If you have a low customer satisfaction score, this can also eat into your bottom line and have a negative effect on your sales. 

Business Growth

Good luck growing your business if you have issues with cash flow and unhappy customers. Those two ingredients don’t add up to a healthy, profitable business. The sooner you can improve your shipping strategy, the sooner you can work on growing your business.

Stocks

Negative perceptions can also affect your business’s stock prices. If yours is a publicly-traded company and you have lower profit margins because of shipping issues, Wall Street will notice and may penalize you with a lower multiple for your stock price.

Creating a Great Small Business Shipping Strategy

Clearly, it’s important to make your shipping strategy a top priority. This is especially true if you feel that you’re spending too much on shipping or suspect that you’re losing customers because of high shipping costs or long shipping times.

No matter what challenges you’re facing, a good shipping plan can help. Here are some tips that will help you put together the perfect plan for your business:

Do Your Research

Start by doing your research. Learn about the different shipping options available to your company and figure out which one will give you the most flexibility while also saving you the most money.

For example, can you offer free shipping by increasing your prices slightly? Can you offer a flat-rate shipping option so customers know exactly what they’re paying?

Do your research when it comes to shipping carriers, too. Comparing and contrasting carriers (as well as their rates and the shipping features they offer) can help you save a lot of money while also finding the most efficient way to deliver your products. 

Look Up Local Carriers

You may want to consider local carriers who ship to a specific region, too.

If you are shipping lots of items to one part of the country, a local carrier can help you save money. Their rates are often lower than national or international shipping carriers because they don’t serve as wide of an area.

Stock Up on Shipping Supplies

Make sure you have all the shipping supplies you need. Buy in bulk so you never run low. Depending on the shipping carrier you choose, you may also have access to free shipping supplies.

Don’t be afraid to reuse materials, either. You can reuse things like bubble wrap and packing peanuts to save money and reduce waste. 

Look into Outsourcing

Sometimes, the best small business shipping strategy is to outsource to someone else. This might cost you more money upfront. However, it’ll save you a lot of money later on.

Outsourcing your shipping also helps you to increase your efficiency for your customers.

When you let professionals handle the shipping process, they can send out products faster, which means your customers receive them faster. This, in turn, will lead to more satisfied customers and better reviews for your business.

Consider Freight Shipping

Don’t forget to ask for a freight shipping quote or two when you’re considering your shipping options. If you have to ship out a high volume of goods, freight shipping can be very cost-effective.

You may even be able to split up items into multiple shipments, which can lower your costs even more. Just be sure to disclose that to your customers first so they know to expect multiple deliveries. If it lowers shipping costs for them, they’ll often be happy to accept it.

Work on Your Shipping Strategy Today

As you can see, there are a lot of ways in which your small business shipping strategy impacts your bottom line.

If you keep this information in mind, along with the tips on how you can create an effective strategy, it’ll be much easier for you to ship out goods on time and for the lowest prices possible.

Do you want to learn more about small business shipping? If so, check out the Business and Startup sections of our site today for some additional tips and tricks.