Shipping Options and Tips for Small Businesses

The cost of shipping for small businesses can have a significant impact on conversion rates and overall profitability — it’s often the top reason for cart abandonment and can impact customer loyalty and repeat business. In addition, many businesses experienced a shift in their metrics as new business rates climbed. The COVID-19 pandemic influenced more customers to shop online as opposed to in-person.

Customers that may have previously only used online shopping on a limited basis started shopping online for everything from groceries and prescriptions to cars and other large household items. It’s an excellent opportunity, but one that demands a fresh strategy and finding every possible shipping efficiency. Here are some proven small business shipping solutions that can help your business grow and adapt.

Cut Shipping Costs Without Sacrificing Quality

Evaluate Product Packaging

One of the things any size shipper should do is evaluate their packaging when considering ways to cut costs. Recent changes in the retail shipping model now include dimensional weight as part of the pricing equation. With both the weight and size of the packaging included, it’s important to review packaging with your shipping partner to determine the best options for products being shipped. When you’re determining packing materials you can compare the size of the box or material used to ship the product as well as the weight of the materials used to protect the product. Determine whether they are meeting your needs and if you are able to reduce the weight and size of the materials.

Multiple Distribution Centers

Finding ways and areas to cut costs can vary greatly from one business model to another. One of the most effective ways for businesses to reduce costs is by creating multiple distribution centers. Regionalizing product volume can have a large impact on shipping by reducing zone costs and delivery time. Though this option is dependent on your business size and product volume, there are more opportunities with warehouses and distribution centers popping up across the country.

Partner with a Shipping Consolidator

A shipping consolidation partner can offer small businesses volume rates and help them avoid expensive surcharges. Third-party shipping providers help consolidate shipping costs and achieve volume discounts by picking up packages from multiple shippers and businesses and combining them into one large load. That single load is shipped as a unit to the local USPS offices of the customer’s destination. From there, packages enter the local mail stream and are delivered to their final destination.

Develop a Shipping Model That Can Evolve with Your Business

A smart shipping strategy has the ability to respond and adapt to social-economic and seasonal changes as business fluctuates. Package volume is the biggest driver in cutting shipping costs. That’s why a strategy for large businesses is vastly different from shipping services for small businesses. They benefit from discounts based on the ability to presort and drop-ship packages deeper into the USPS system. This can be difficult for small businesses that may not ship a large quantity of packages on a regular basis, but there are other areas where small businesses can cut costs.

Use Data to Create Efficiencies in the Shipping Process

Invest in Software

Every shipper should look into available software options that can help create efficiencies in their shipping process. There are several that can be implemented as a small business grows, such as a Transportation Management System (TMPS). Having a TMPS helps small businesses track every shipping event from the warehouse to its destination. It partners well with a Warehouse Management System (WPS) and integrates with existing platforms as an out-of-the-box system and custom-tailored solutions

Shipping technology and software operations are constantly evolving. Shippers should regularly evaluate their shipping operations to see if it’s doing everything needed to create a smooth process of labeling and shipping.

Utilize Business Intelligence and Data Analytics

Implementing Business Intelligence can greatly impact and improve your business. Business Intelligence allows logistics professionals to see patterns and optimize their delivery strategies to make the process more efficient from the time a customer places an order to delivery.

Business Intelligence can help small businesses reduce spending, make real-time decisions, create efficiencies, improve customer service, and increase communication between shipper and carrier. Business Intelligence can also help identify and address red flags. The ability to pull data in real time allows you to identify problems at their source and can lead to significant cost savings.

Work with A Shipping Partner to Help Manage Shipping Costs

You should always consider the price, delivery and transit times, tracking visibility, and overall customer experience when choosing small business shipping solutions. Choosing the right shipping partner can make a difference in shipping services for small businesses. OSM Worldwide’s services can help advise small businesses to manage costs because we started as a small business and understand the complexities. OSM can determine the right domestic shipping and international shipping strategy to implement for your business. Our data-driven approach will determine the most cost-effective and efficient approach for your business’s shipping. Contact us to discuss your shipping needs and request a quote.