Sorting out your shipping is one of the hardest parts of setting up an online business. It’s a tricky thing to balance because customers have high expectations. When you’re competing with big companies that offer next-day delivery, you need to make sure that you get products delivered quickly. However, you also have to consider the price because, if you’re charging over the odds for delivery, you won’t make any sales. Finding a good balance between the two is harder than you might think, and there are lots of organizational challenges to deal with too.
If you are planning to start your own online business, here’s how to set up an efficient, cost-effective shipping operation.
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Choose Your Shipping Option
First, you need to decide how you’re going to handle your shipping. You could deal with all in-house, but that’s a big expense, especially for a new business. Do you have the money to pay for vehicles and drivers? Can you plan effective routes and deliver products across the country? The answer is probably no. Handling shipping in-house is also a big risk because you can’t cope with expansion.
Hiring a courier company is another option. They have the infrastructure to handle all of your shipping quickly and efficiently. If you need to expand, a large courier can accommodate that too. Just make sure that you compare prices between several suppliers and negotiate to get the best deal. You should also investigateltl freight shipping services that don’t require full vehicles because they can help you save money. LTL stands for less-than-load, and it is perfect when you have a small number of products that won’t fill a full load. You share the truck with other businesses and the products are all shipped together. This is ideal for new businesses with limited sales.
Calculate Your Shipping Costs
Next, you need to calculate your shipping costs. You must charge an accurate price to customers for shipping. Don’t absorb all the costs because that will reduce your profits, but don’t charge the customer too much because that will damage sales.
If you are working with a courier and you pay them a flat rate, calculate how many products they deliver for you, on average, and then divide the flat rate by that number to get a cost per delivery. Otherwise, you should have a specific cost per delivery. You can use this figure to work out how much to charge customers.
Find Ways to Cut Costs
Once you have set up your shipping operation, you need to monitor it and find ways to make improvements. So many businesses are wasting money because of inefficiencies in their packaging and shipping operation. By doing simple things like reducing the size of packaging and cutting weight, you can save money. It’s always worth negotiating with your courier too and looking around for better deals.
If you are running an online retail business, you must get your shipping operation right. These are the basic steps you need to follow.