How Small Businesses Can Get Control of Their Shipping
How you manage your shipping, fulfillment and returns can make or break your business. Small businesses thrive on great customer service so make sure you get it right and don’t break the bank whilst doing it – Don’t worry we’ve done the research for you!
Shipping considerations for small businesses
Volume of orders
The quantity of orders that a small business sends out every month plays a significant role in picking the best solution. Businesses with larger volumes have the ability to negotiate inexpensive shipping rates, small business shipping services solutions, such as packaging and delivery discounts: even better using a third-party source like Veeqo to help manage your orders and shipping. Overall this connection ensures seamless ecommerce order fulfillment… because happy customers means happy life right?
FACT: According to the U.S. Census Bureau, retail e-commerce sales totaled nearly $200 Billion during the third quarter of 2020, representing 13.5 percent of retail sales in the United States. Even more reason to ensure you meet customer expectations!
Choosing the right packaging is one of the most important considerations in fulfillment – the customer wants the product in perfect condition and so the packaging must be correct. Choosing your product packaging provides an opportunity to protect your goods and save on shipping costs. The level of protection that the product needs is of course important, however could impact packaging costs due to the added bubble wrap or being air-filled for protection. All aspects to consider when choosing the correct packaging for each specific product to avoid damages.
Tip: Packaging can enable you to advertise your brand – the unboxing process we see all over social media is a huge marketing tool. ‘Over 90,000 people type “unboxing” into YouTube every month’ – Use this to your advantage!
Needless to say, heavier packages will cost more to ship and this is why the packaging above is important. You should consider the dimensional weight (DIM) of your goods being transported as this takes into account the dimensions of the package. Large boxes have a larger DIM weight, which will lead to high shipping costs. Due to this, if possible to use smaller boxes while ensuring that the products are secure in place, this will save on shipping costs.
Distance between your location to the customer is another factor to consider. Shipping internationally is more costly than domestic shipping and this can therefore affect delivery times also. Online customers expect quick yet affordable deliveries: it is essential to select a shipping provider that gives a balance between cost and time. Keep an eye out for the breakdown of available providers within this blog!
Always provide the customer with information on how long it will take for the product to be produced, packaged and shipped – As mentioned above trust is key. An email update is a simple gesture that means a lot when waiting for a parcel. We all know the excitement when you receive a ‘booking confirmed, your parcel is due before the end of the week’ email.
When providing an estimated delivery date, it may be wise to add a few extra days in case anything arises to delay the process. The best possible experience is when a package arrives on time. Even better is when it’s early (hence the extra time so you always seem to meet those deadline dates & enhance customer satisfaction).
All small businesses should have a clear shipping policy that they share with their customers: the tracking protocol is part of this policy. Increasingly customers expect to be able to track their purchases, the benefit for you is that you can use that aspect to build trust and maintain a competitive edge. Transparency is the foundation to build a relationship with your customers, which in turn should evoke emotions to want to return to your business, all being well with their shipping process.
Four different shipping methods for small businesses
Choosing the right shipping method for your business can be hard, that’s why we have added a breakdown below so you know what shipping options to offer your customers. The top 3 Ecommerce shipping options: free shipping, flat rate and table rate shipping.
This may be free to your customers but not to you. You will still need to pay the carrier and you’ll have to make sure you’re making enough on each order to cover the associated shipping costs. However, the benefits of offering free shipping with an associated basket cost could improve your sales. On average orders are 30% higher in value than those without free shipping offered.
For example, ‘Free shipping for orders over $40.’ This means you can increase your sales and average basket size if you set a free shipping threshold. This could of course exclude products that are too heavy/large for you to offer free shipping. Is this something you could consider?
Flat rate shipping
This is when you charge for example $10 shipping regardless of order value. This works well if products are quite heavy or have a number of different products in one parcel and they are using up the space; otherwise it could be cheaper to send a smaller parcel as standard.
Table rate shipping
Shipping this method can seem complex; however here is a quick breakdown for you! It could be split up by distance or subtotal of products. For example, a merchant with a warehouse in New York City might charge customers near the city a certain amount, say $10 per order, with rates going up to $10, $15 etc, as you get further away from the fulfillment center. If you were to charge based on the order subtotal, for example $10 for orders up to $50 in value, $10 for orders up to $100, and free for orders over $100. This method is based on how you wish to split up your orders – whether that be location, price or even weight of products: this rule is set by you.
You can of course use live rates from couriers: If the most important factor for you is to offer the best possible rate for your customers while still covering your costs, getting live rates from a carrier like UPS, FedEx or DHL may be great for you.
How small business can reduce shipping costs
It is clear being able to offer cheap or even better free shipping costs for customers is very important; however this can cut deep into your profits. So how can you keep your customers happy but try to keep costs low? Look no further…
Find the best shipping rates
Choosing the right shipping method for your business can be hard work, that’s why we have added a breakdown for you below.
United States Postal Service – The USPS offers a few choices that make it worth utilizing as a shipping solution. (Business Shipping – Rates, Discounts, Services)
FedEx – FedEx offers Next Day Delivery, can provide packaging and also does ship to certain countries worldwide.
UPS – UPS offers several services designed specifically for small businesses. UPS offers overnight, international and ground shipping, as well as returns and billing options. (Global Home: UPS – United States)
Veeqo has pre-negotiated discounted shipping rates to offer small businesses just like you to ensure you save as much as possible on shipping costs. This could be of huge benefit to small businesses that ship parcels regularly.
Tip: Know your carriers. If you’re based in the US or Canada, you can pay for USPS, UPS, DHL Express, Canada Post & if you are connected to Veeqo you can even receive pre-negotiated discounted rates!
Get a good deal on shipping insurance
Your stance on insurance should also be laid out in your shipping policy when customers are ready to purchase. It should address what might happen if products are damaged or worse lost in transit; especially gifts and luxury items.
Having a policy in place could help you put customers at ease and may not be as expensive as you think. Fortunately, most international express couriers cover shipments worth up to $100. Shipping insurance for products worth more than $100 must be purchased separately – something to look at if your total shipment goes over this threshold.
Optimise returns management
Returns can be a huge part of ecommerce so ensuring it is a smooth process will save you money. Making it easy for the customer is key if you want to maintain a positive relationship and potential return custom so here are the best return options for small businesses:
Option 1: You can send a return address label they can use to ship back once paid for. This tactic means it is easier for the customer meaning some ‘extra credit’ for your business in the customer’s eyes however also means they pay for the return – saving your bottom line too! If you are hoping to reduce costs this is likely to be your best option.
Option 2: Giving the customer the choice of shipping it back prepaid, but having the amount deducted from their refund total. It also cuts back on the time your staff spends processing returns online, meaning overall saving your small business money.
How can Veeqo help small businesses like you
Veeqo is an all-in-one solution that handles both shipping and inventory in one platform, so you won’t be paying to connect two (or more) systems together with several different logins and touchpoints. Veeqo offers automated shipping workflows: which means you can put repetitive tasks on autopilot based on custom triggers and conditions – like defaulting to an expedited service for next-day orders. You can learn more about how Veeqo can help small businesses here.
Manage all your returns and refunds in one place across your customer service, warehouse and finance teams. Find orders by customer name, date and order numbers. Do full or partial refunds and set the reason for return. Receive returns and put items back into stock or write them off.
With Veeqo you can find any order with a live search. Prioritize orders with tags and filters and add internal notes to clearly communicate with your team. Veeqo’s picking management system drastically reduces the number of mispicks your team will make. In turn reducing the number of returns due to customers being sent the wrong item. Along with so much more – find out here.
Do you need to improve your shipping options, return management or fulfillment models? Click here for more information
Small Business Shipping FAQs
Is a shipping policy required?
A Shipping Policy is not legally required, however having one provides certainty for the customer and provides benefits for your business too. If the process is clear, customers are likely to shop with you without questions.
How can I offer free shipping?
Here are 4 different ways to offer free shipping to your customers
Offer free shipping on select items only (over a certain price/ under a certain weight)
Set a minimum order amount
Offer free economy shipping (products take longer for customers to receive)
Use free shipping as a promotion (customers will pay more for products to receive free shipping)
Is a shipping policy required?
A Shipping Policy is not legally required, however having one provides certainty for the customer and provides benefits for your business too. If the process is clear, customers are likely to shop with you without questions.How can I offer free shipping?
Here are 4 different ways to offer free shipping to your customers: – Offer free shipping on select items only (over a certain price/ under a certain weight) – Set a minimum order amount – Offer free economy shipping (products take longer for customers to receive) – Use free shipping as a promotion (customers will pay more for products to receive free shipping)Do you have any related guides?
Yes we have a number of related guides for you to read: – How to create a shipping label – Order fulfillment guide – Managing ecommerce returns – Understanding SKUs – What is dunnage? – Reducing shipping costs