Whether you’re an ecommerce company or a brick-and-mortar retailer that’s ramping up your mail-order business, you’re going to pay a lot to ship packages to your customers. And increasing your shipping volume is often the most cost-effective way to increase sales, assuming that you keep shipping costs under control. Here are the best small business shipping tips to grow your profit margins in 2021.
Understand the New Shipping Terms
INCO defines the terms used in standard shipping contract. They’ve made changes for 2021 such as changing the levels of insurance coverage for Cost Insurance and Freight and Carriage and Insurance Paid. These rule changes included more detailed security obligations for import/export clearance and changing Delivered at Terminal to Delivered at Place Unloaded. You can read an updated INCO glossary here. Then you can update your contracts to reflect these new terms or understand what you’re committing to when you sign up for a service.
Pay Close Attention to Shipping Costs
Labor costs are rising. Rising fuel costs are driving up shipping costs, too. You can’t afford to keep your shipping and handling fees steady while the cost of providing service going up. There are a number of options. One option is charging customers more for deliveries. Adjust your shipping rates as the shipping services change their shipping rates, so that you’re not losing money because you didn’t keep up. Another solution is finding ways to lower shipping costs. You might consolidate orders, especially if you’re shipping overseas. You might charge customers based on the weight and size of the item rather than a flat rate. Then they pay for bulk orders, but they get a discount if they order something smaller. You could try to lower the size and weight of shipments by shifting to smaller boxes or integrated packaging.
Consider Outsourcing
You might outsource shipping and logistics to third parties that can do so at a lower cost per package. Depending on the arrangement, this might speed up delivery to the customer, too. For example, you could have a company with warehouses scattered across the country fulfill orders for you. If the order is sent by the warehouse in the customer’s home state, they could get it one to two days sooner though they’re paying the same cost for shipping. You certainly don’t have to ask retail staff to stay later to fulfill online orders or pay overtime to meet holiday demand.
Invest in Quality Control Before It Goes Out the Door
Invest a little more into making sure the right item is shipped to the right address before you send it. It is a waste of time and money to ship the wrong item to customers and then have to pay for its return. Verify that customer provided addresses are correct and that it is a valid address. You don’t want to pay to ship something that is lost because the customer left off an apartment number or other critical information. Have an audit done if a lot of your shipments are reported lost.
Understand the Additional Requirements When Shipping Abroad
When you ship internationally, there will be additional paperwork such as customs declarations. Value added taxes, duties and tariffs need to be paid by someone, too. You may need to come up with new procedures if you’re going to start shipping things abroad or work with professionals so that international shipments get through without delays and without additional expenses.
