Shipping out merchandise is sometimes the most complex operation for a small business. No planning, or even poor planning, can mean owners wind up overpaying, even losing some sales if their company can’t consistently provide cost-effective delivery to its consumers.
For any business which isn’t sending big shipments of multiple pallets simultaneously or simply isn’t big enough to afford hiring a dedicated logistics provider for shipping management, the development of certain guidelines is critical.
The effective management of shipping costs has a direct impact on the bottom line of any small business. Every single dollar that a business can save in the area of transportation results in significant improvement in the larger financial performance.
Keep reading to learn several particular factors that a business owner needs to consider in advance of shipping any of their products to their consumers:
Match the fees and delivery requirements for your most common shipments.
You’ve got several national choices in terms of a shipping service provider. That would be the United States Postal Service, DHL, UPS, or FedEx. Once you choose one, find out who their small-business specialist is so that you can match the carrier services and fees with the most common shipping requirements your business has, like delivery timing and mode of transportation. Businesses which fail to work with their chosen carrier to map out their shipping criteria sometimes spend nearly 40 percent more in total fees than competitors who do actually follow through.
One pertinent factor to discuss with your specialist is when a package should be shipped by ground or by air. Ground services can provide substantial savings, based on the size of the package, the value of the package, the weight it has, and what distance it is getting shipped. Look over your carrier’s tariff schedule to compare prices.
It’s also good for business owners to institute rules internally so that their own staff can easily decipher when an order should be shipped so that express delivery fees, which are almost always higher, can be avoided. When something has to go out last-minute, your only choice might be air, but that will come with an increased cost.
Create charge-back policies for transportation costs.
Let your customers know clearly when your business will cover shipping and when they are going to be responsible for the costs. For instance, you might list three-day parcel services as a standard option your company pays for, but any premium services above that, like two-day parcel or overnight air, are handled partially or in full by the consumer.
Once you set such a policy, inform both customer service and sales staffs, since they’re typically the ones dealing directly with your consumers.
Utilize a robust postage meter.
A postage meter is typically a portable machine that comes equipped with a scale where you can weigh your packages, assess accurate postage charges, and print your shipping labels. A system like this helps your staff of mailers because they no longer guess package weights or buy additional postage just to make sure it gets there.
According to http://www.usastampguide.com/ utilizing postage metering systems eliminate the cost overruns of over-postage and it’s far simpler than physically going to a shipping carrier and then waiting in line. Pitney Bowes is one of the leading names among postage meter providers, and they claim that some small businesses reduce their annual postage by as much as 20 percent with the right meters.
Some postage meters are also quite affordable, with recurring monthly fees starting as low as $20. It doesn’t take many packages without cost-overruns to pay off one of these.
Realize when the time comes to consolidate.
If your business sends out shipments that range from 150 pounds to roughly 20,000 pounds, then you are dealing with LTL, or ‘less than truckload’ shipments. It might make sense to partner up with a specific freight consolidation service that combines your own shipments with others in order to create full truckloads.
LTL shipments and typically run a lot higher than the prices for full container load or truckload rates. LTL shipments do have to go through a carrier consolidation process at a truck terminal before they join a full truckload and get shipped out. When a small business actually has a full container load or a full truckload shipment, then their carrier can simply pull up to the terminal, load up the truck, and leave, which saves time and money.
Track the performance of your carrier.
Using a kind of ‘scorecard’ means you can analyze your carrier performance along measurable metrics, such as costs and services. Individual service factors might include delivery, pickup, customer service inquiry responses, accessibility of online status information, the accuracy of that information, and meeting agreed-upon transit times, pickups, and deliveries.
Cost factors might include a baseline by distance or weight, the costs of each service level (such as standard, expedited, premium, overnight, etc), meeting delivery times that are specific, or special handling fees.
Work in conjunction with your carrier to isolate and that resolve and failures or lapses in service quality or cost performance. Soliciting the input of your consumers can often be quite insightful in learning where things could use improvement, as well as gathering their ideas for how to create services or solutions that work for them.