As ecommerce orders grow to account for an ever-larger percentage of sales in general, many companies are feeling the Amazon Effect: the increased need and use of shipping to meet customer needs. And especially as many companies enjoying the ecommerce boom are finding, orders get more and more difficult to fill and ship as demand increases. And unfortunately, many companies don’t have a strong logistics plan in place, or have one based on filling orders one-off.
This decreases the ability of individuals to focus on other critical business tasks, and spending time filling boxes and affixing labels can often either be put off or done inefficiently. But falling behind on orders and wasting time are both unsatisfactory options when there are easy and sensible solutions. And contrary to popular belief, updating a company’s logistics doesn’t always require a large investment of cash up front, and it can often be a great stepping stone to growing a better company. But that’s not the only way having a solid plan can help; it can ensure that companies are protected from projections of ever-increasing shipping rates.
Consider Third Party Logistics
Third party logistics options simply step in when your business is growing to combine several services all together, such as warehouses, freight, shipping, and transfer. By consolidating so many services, they often save growing businesses money while also netting a profit for themselves. Using third party logistics is also generally more environmentally friendly than ad-hoc shipping, and can usually save companies substantially on warehousing costs and freight because they have the facilities and equipment already, and can share costs between multiple clients.
Optimize Your Freight & Shipping Based on Price
Often, companies who begin shipping on one-off orders will simply stick with whichever shipping or freight company they used at the beginning of their business. Often, this is rarely the most cost-effective way to do business, as most companies in their first stages utilize some of the big names in the industry. We recommend using systems like the freight calculator at Red Dog or other calculators which show multiple prices for shipping a single object from several competing companies. Doing the same for each different package size can save businesses big money, as the shipping provider with the cheapest cost for one package type is rarely the cheapest for others. In short: comparison shop your shipping!
Consider using dedicated freight or shipping management software. Especially if most of what you ship is standardized and varies little in weight, using software can save a great deal of valuable time, reducing data entry, tracking payments and shipping for customers, collating invoices or payments, and even providing reports. There are dozens of logistics and shipping management software packages out there from Capterra to Trueship to Brightpearl to Shipworks.
Buying your shipping insurance from a third party, rather than the company delivering your package, can also save a substantial amount. Companies which do this include Parcel and U-PIC, and can generally save companies roughly 45 cents on the dollar. Especially for companies shipping many high-dollar items, that savings just on insurance costs can add up quite easily.
Ultimately, when updating your logistics and outgoing systems, your customers might not ever notice the difference. But your company will see a big one: in cost and labor. And updating your logistics management doesn’t need to be a big shift that’s a massive expense! It can be anything from simple solutions like comparing shipping providers to major organizational changes like hiring a third party logistics manager. And often, money can be saved even if you look in areas that aren’t especially obvious, such as insurance costs.