Home Business 3 Ways to Decrease Small Business Shipping Costs While Maintaining Customer Loyalty

3 Ways to Decrease Small Business Shipping Costs While Maintaining Customer Loyalty

by John

If you are the owner of a small business, chances are you have noticed how quickly shipping costs can increase prices on your products. With company giants like Amazon, Target, and Walmart, consumers are familiar with free shipping. But with any start-up business, free shipping is generally an impossible standard to expect. Keeping this in mind, any way in which you can minimize—or appear to minimize—shipping costs can help you to retain customers and maintain a competitive edge over comparable brands.

Find Your Carrier

As your business grows and more orders need to be fulfilled, be sure to shop around the different shipping carriers for the best deal. Never assume that one carrier has the best rate for your company as this can be an easy way that you are losing money. Keep in mind that rates change as well. You should be researching other carriers on a consistent basis in order to ensure that you have the best deal. Some companies are known to ship products with different carriers depending on what the product is and what type of tracking or insurance is being provided to the customer. For instance, reliable shipping companies will offer you high value shipping insurance when you’re looking to ship valuable items, such as jewelry, watches, or gold.

Additionally, all major carriers can provide flat rate shipping. However, it is important to note that a flat rate also means standardized packaging. For example, USPS flat rate box sizes range from small envelopes and bubble mailers all the way to 12”x12 ¼”x6” boxes. If your customer’s order is larger than this box size, you will have to find another shipping method. While flat rates may seem to be a bit pricier, finding a flat rate option may be best to keep shipping costs under control if you tend to ship heavier items.

Major carriers like UPS, USPS, and FedEx have competitive small business shipping options such as offering delivery on Saturdays or providing more in-depth package tracking services. Research each company and find out which one is most cost-efficient for your shipping needs.

Offer “Free Shipping”

One hack that is used by many smaller companies is to offer free shipping on products, but in reality, the shipping cost is already incorporated into the product cost in some way. With this strategy, companies take the average cost of shipping for the average order and add it to the product cost. Since being required to pay shipping for an order can be the difference between a customer buying through your business or through a corporation like Amazon, this is a more appealing way to be able to advertise free shipping without paying for the shipping costs yourself.

Some businesses choose to offer free shipping if a certain purchase threshold is reached. For example, if the threshold set is $50, once enough items are added to an order totaling over $50, that order will receive free shipping. In many cases, customers are willing to purchase more items in order to earn free shipping. Because the profit earned by the sale is large enough, the business can cover the cost of shipping. The threshold set will vary from business to business, so trial and error may be necessary when calculating your business’ number.

Manage Returns

Any company, large or small, deals with product returns on a daily level for a multitude of reasons. Online shopping means that a certain level of risk is brought on the customer. Any way with which you can reduce this risk makes your business more appealing and more competitive. One easy way to make a return hassle-free without adding to your shipping cost is by offering a prepaid return label inside of their order but making it clear that the cost to ship the return will come out of their refund. This reduces the risk of the purchase on your customer but prevents you from being forced to pay shipping for them.

As you sell items from your business, be sure to track shipping costs against your profit margin. Find creative ways to exonerate your business from directly paying for your orders’ shipping, but also be sure to provide your customers with the best deals to maintain loyalty. And do not be afraid to shop around with different carriers until you find one that works for you.

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