People often start online businesses because they think that the running costs are going to be low. It’s true that you don’t have to pay rent on a physical shop space and hire a load of staff to fill it, but there are costs that are unique to e-commerce which means that it’s actually not always cheaper. One of the major costs that people underestimate is the shipping. Of course, your customers will pay toward the shipping but with a lot of the big companies offering free shipping these days, it’s a risk to get them to pay high fees. You’re likely to put people off if they have to pay a lot for shipping so you’ll have to bear the lion’s share of that burden yourself. But this can make things difficult, especially for new businesses that only have a limited amount of cash to play with. If you’re going to survive, you need to find a way of cutting your shipping costs. Luckily for you, we’ve put together a handy list of ways that you can do just that.
Cut Down On Unnecessary Packaging
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Have you ever ordered something small, only to get home and find a note saying that it wouldn’t fit through the letterbox so you’ll have to collect it from the post office? You’re left thinking, why couldn’t they get something so small through the letterbox? Then you go to pick it up and realize that it’s because it’s in a ridiculously large box. A lot of companies make this mistake and it costs a lot of money. You’re paying for all of that packaging and if you’re using too much, you’re just burning money. If you want to save money, you need to make sure that you’re only using what you need. The cost of shipping is going to be decided on the weight as well as the size so each piece of excessive packaging will push that price up.
Often, companies end up using unnecessary packaging because of the shape of the packaging on the product itself. Interesting product packaging can be an effective marketing tool but if you’re using an odd shape that means you have to put it in a much larger box, you might be costing yourself a lot of money. You have to weigh up whether the benefits you get from the interesting packaging outweigh the extra money you’re spending on shipping. The best thing to do is get some scales from 1800scales.com and start weighing your packages. You’ll be surprised just how much difference it can make if you cut down on the size of the box that you use. The other major benefit of weighing parcels yourself is that you can get an estimate of how much it should cost and you’ll know whether you’re paying over the odds or not.
Choose The Right Courier Service
Choosing the right courier service is vital to cutting the cost of your shipping. The obvious way to save money is to find the cheapest company and go with them, but it’s not always that simple. They might give you a cheap price but the service will reflect that. If they break things in transit or deliver the wrong parcel, it’ll be you that pays for a replacement product most of the time so you’ll essentially be paying twice. You’ll actually save money if you pay a little more for a more experienced service that handles your products carefully.
When you’re choosing a courier service, there are a few things to look out for. Firstly, you should ask them whether they work with any other companies that sell products similar to yours. Having that experience means they’re less likely to break things along the way.
Flat rate shipping is another big bonus; instead of paying for things by weight and size, you’ll pay a flat rate dependent on where the delivery is going. Usually, it will save you money but you do have to consider the products that you’re sending. If, for example, your products are small and they’ll cost less than the flat rate to ship anyway then you aren’t saving money. But if you sell some larger products, you’ll usually make a big saving.
When you think that you’ve found a company that is best for you, always make sure to negotiate. They’re going to offer you their worst price to start with but most couriers are open to negotiation. If you don’t try to get a better deal for yourself, you’ll be paying way more than you need to be. Some couriers will offer benefits like packaging materials etc. as part of the price so consider this when you’re haggling on the price as well.
Shipping Refunds
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When a customer buys a product from you and you give them an arrival date, you’re making them a promise. If the courier company doesn’t deliver on time then you’ve broken that promise and it reflects badly on your company. Trust is the most important thing in business and you’ll lose the trust of your customers if you don’t get their products out to them when you said you would. Fortunately, most courier companies offer a refund service to protect you from this. Obviously, you’ll want to avoid it in the first place but if it does happen, make sure that you contact the courier company and claim your refund. Often, the best thing to do is send the money back to the customer and apologise for the mistake. That way, they’ll be less likely to get upset about the issue and they’ll come back again in the future.
If you can’t keep up with the refunds yourself, there are some companies like refundtiger.com that will claim them on your behalf in exchange for a small percentage of the money that they recover.
Managing your shipping costs is the most important thing when you’re running an e-commerce business. If you don’t, you’ll end up spending all of your cash on shipping and you won’t have anything left to cover the rest of your running costs.
