How to Manage Small Business Shipping Costs
Small business shipping has become a cost management focus for eCommerce brands. Combined with an increasingly competitive online marketplace and evolving carrier price structures, high business shipping costs present serious challenges to profitability—creating the need for small and medium-sized eCommerce companies to find new ways to reduce shipping-related expenses.
Small Business Shipping Challenges
In today’s online marketplace, shipping is no longer an afterthought—it’s a primary consideration for consumers. In many cases, shipping options differentiate eCommerce brands from the competition or incentivize shoppers to make a purchase decision.
But maintaining an efficient small business shipping program can be a struggle for eCommerce brands. Some of the common challenges include:
- Customer Expectations – When it comes to shipping options, customer expectations are at an all-time high. Increasingly, consumers and B2B buyers anticipate a range of advanced shipping options, including fast, standard delivery (1-3 days) and next-day or even same-day delivery in large metros. International shipping requirements raise the bar even higher for emerging eCommerce brands.
- Competitive Pressure – Like it or not, there is a competitive dimension to small business shipping. Since eCommerce brands realize that customers often reward sellers that provide superior shipping experiences, more and more eCommerce companies are using free shipping, expedited shipping and other strategies to differentiate themselves from the competition.
- Dimensional Weight Pricing – Large shipping carriers like UPS and FedEx have expanded dimensional weight pricing for ground shipments. In the past, ground shipping was based on weight. But dimensional weight pricing is based on package size. In general, dimensional weight pricing is a win for retailers that ship mostly small packages (e.g., jewelry sellers), but it creates higher costs and new shipping challenges for retailers that specialize in larger package sizes (e.g., apparel).
Tips for Managing Small Business Shipping Costs
At Dotcom Distribution, we understand how important it is for small and medium-sized retailers to manage business shipping costs and leverage shipping to create exceptional customer experiences. Here are a few tips to help your brand optimize small business shipping:
- Work with a proven 3PL partner. An experienced third-party logistics and fulfillment provider can significantly improve shipping processes and generate important wins for your brand. In addition to managing shipping costs for you, leading eCommerce logistics partners can suggest shipping strategies that increase customer satisfaction.
- Consider package design. In the era of dimensional weight pricing, it may be worthwhile to reconsider your packaging. Although it’s important to identify more efficient packaging alternatives, it’s even more important to offer premium packaging that extends the customer experience to the moment packages arrive on shoppers’ doorsteps.
- Create a more efficient logistics and supply chain. Shipping costs are only part of your brand’s logistics and fulfillment expenses. In many cases, the increased use of automation and forecasting can create additional efficiencies and reduce costs across your brand’s logistics and supply chain operation.
Ready to optimize small business shipping for your eCommerce brand? Dotcom Distribution is the leading strategic eCommerce logistics partner for fast-growing online retailers. Contact us today to learn how we can help your brand convert shipping processes into a true business advantage.