Running a business involves navigating a wide range of challenges. Whether it is marketing new products, maintaining inventory, or managing finances, small business owners have to carry out many tasks if they want to stay on top of every aspect of their business.
Of all the variables involved in operating a business, shipping services occupy one of the highest priorities for e-commerce businesses and online retailers — choosing the right shipping carrier is not only essential for ensuring a fast delivery time but it is also a crucial step that will help keep your cost of shipping at an optimum level.
In this article, we will discuss the importance of working with the ideal shipper and outline some of the things that should be taken into consideration when choosing a shipping company for your small business.
How Do Shipping Companies Help Small Businesses?
As a third-party logistics provider, a shipping company helps small businesses tackle a number of shipping and fulfillment tasks. Here is a brief overview of the main ones.
- Shipping: Naturally, shipping is the core service that these companies offer to small businesses. Depending on where the products are being shipped to, the shipping company can ship via road, rail, sea, or air.
- Inbound processes: Inbound logistics are the supply chain processes that bring products, goods, or raw materials from suppliers to the warehouse. Full-service shipping companies can help with everything from managing receipts and load arrivals to purchase order tracking and customer returns processing.
- Outbound processes: Outbound logistics are concerned with delivering the final product to the customer. Outbound tasks include order processing, product packing, shipping, and document generation.
Things to Consider When Selecting the Best Small Business Shipping Company for You
Before exploring different small business shipping solutions, you must first identify a few factors that could affect your shipping needs. The following sections will provide a breakdown of what you should take into consideration when picking a shipping company.
How Many Orders You Will Ship
The first thing you need to determine is the shipping volume of your business. In fact, having a clear idea of how many parcels will be sent out to customers plays a significant role in picking a shipping carrier.
For instance, a business that sells a small number of products on a local e-commerce platform or a niche online store is better off outsourcing the shipping process to a small, locally focused carrier. On the other hand, businesses that move a lot of units on large platforms, such as eBay and Amazon, should work with major carriers that can handle large volumes and provide international shipping, like DHL and FedEx.
How Big Your Packages Usually Are
Another factor you shouldn't neglect when picking a shipping carrier is the size of your packages. It's worth noting that many shipping companies impose size limits, restrictions, and dimensional fees on the packages they ship.
The maximum size specifications can vary widely from one company to another and depending on the shipping method. To ensure you are picking a carrier that can accommodate your needs, make sure to identify the size of your packages before you start comparing the different shipping options that are available to you.
The Type of Packaging You Will Use
The type of packaging you use will also affect your choice of carrier. As a matter of fact, shipping companies have different standards and requirements when it comes to parcel packaging, and carriers might require specific design characteristics before shipping your products. Here is what you need to determine before selecting a shipping company:
- Shape and dimensions of the packages
- External packaging material
- Internal packaging material
- Packaging strength
- Temperature control for certain products
How Heavy Your Packages Usually Are
One of the crucial variables you should factor in is the weight of the parcels you plan to ship. Keep in mind that most shipping carriers use a pricing model that takes weight into consideration, and many companies have strict weight limits. An example of this is the United States Postal Service's (USPS) 70-pound weight limit.
To avoid any unexpected shipping expenses in the future, make sure to weigh your packages before opting for a carrier and take some time to go over the weight requirements of different shipping companies.
Where You Usually Ship
The locations you ship to can impact several aspects of your shipping strategy. If your business handles orders from all over the world, the ideal option might be to work with a major carrier that offers a comprehensive international delivery service.
On the other hand, if you get repeat business from a few select countries, you might want to explore the possibility of working with a local carrier. Due to their specialized expertise, companies that are specific to a country can offer competitive shipping rates and an excellent delivery speed in that location.
Ways to Reduce Small Business Shipping Costs
As a small business owner, your control over shipping is not limited to selecting a shipping carrier. In fact, there are many proactive steps you can take to reduce your overall shipping costs. Below is a detailed look at what you can do to ensure a cost-effective shipping service for your business.
Negotiate Rates
Negotiation is the key to unlocking shipping cost reductions and obtaining the best rates for a small business. Due to the competitive nature of the shipping industry, even small businesses can leverage their position in the market to negotiate lower shipping rates.
When negotiating shipping rates with multiple carriers, the first move is to inquire about shipping discounts for volume orders. Next, showcase the consistency of your business by providing a data-based breakdown of your shipping history — shipping companies are more likely to acquiesce to the demands of businesses with solid track records.
Package Drop-Off vs. Pick-Up
When shipping customer orders, businesses can either drop off the packages at a P.O. box (drop-off) or arrange for the shipping carrier to pick them up from the specified address (pick-up). While the latter is the more convenient option, it also comes with an extra charge. A straightforward way to reduce your shipping costs is to simply opt for the drop-off option.
Choose Packaging Materials Carefully
Making sure your packaging is up to industry standards can help you reduce shipping costs by a significant amount. On the opposite end, using subpar packaging materials increases the risk of product damage and leads to a higher rate of return shipments.
The key when choosing your packaging material is to maintain a healthy balance between affordability and quality — there is no need to invest in pricey fiber-based materials. However, you still need to avoid cheap, flimsy materials and exclusively opt for reliable packaging materials that are industry tried and tested.
Manage Your Small Business Shipping Costs and More With Skynova
As we have seen in this article, businesses that involve shipping or delivery of products come with a unique set of challenges. Moreover, the prospect of managing all the logistical and financial details seems like a daunting one, even if you happen to enjoy a hands-on approach to running your business.
Luckily, this is exactly what Skynova is here to help with. By using Skynova's accounting software, you can streamline your financial management tasks in a single platform and manage your expenses and income in the most efficient way possible.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always compare the rates and shipping requirements of different carriers to ensure you're making a better-informed decision.