While volumes are written on the importance of design, usability, assortment planning, and marketing, making sure your ecommerce business is successful – and profitable – results from optimizing every component of the business, not just the flashy ones.
To make sure you’re maximizing your profitability in your transportation and fulfillment channels follow this handy checklist:
RIGHT SIZE YOUR MATERIALS
We all know FedEx and UPS changed the rules earlier this year when they implemented DIM weight pricing for all domestic and International services, and that this change brought the potential for significant increases in shipping costs. To make sure you’re not paying too much for freight make sure you optimize your shipping services, your carriers and your packaging. Choose the smallest box you safely can, taking into consideration the importance of making sure the contents of your package arrive intact. It can be a bit of a balancing act, but shaving ounces and cubic inches can add up to significant savings, which fall straight you your bottom line as increased profits.
Charging too much for shipping is a sure recipe for disaster. What’s too much? Judging by the Walker Sands 2015 Future of Retail Study charging anything at all is too much. In their survey, 83% of respondents said Free Shipping was a primary motivator in their online purchasing decisions. Bummer, huh? To limit your exposure on this one, if you’ve already optimized your packaging to minimize cost, your next best strategy is to comparison shop reviewing vendors, service levels, delivery options, and costs.
Once you’re certain you have the best pricing, get creative with how you position yourself on the competitive landscape. Perhaps you can subsidize your shipping costs by adding a nominal flat rate to all orders, build the cost into your MSRP, or set a qualifying threshold for Free Shipping. As a part of our distribution services at Jay Group, we use a host of strategies to get the best rates for our clients. (Shameless plug… One of our best strategies is using our size to our advantage to get the best volume discounts available.
Nothing undermines profitability faster than re-performing work. Make sure you’re delivering the right products to the right people on time to avoid wasting labor, and eroding your profit margin. One of the best ways to do that is with systemic controls and a set of Standard Operating Procedures that help to manage quality and compliance standards. Using an order management system that tracks all of the details about each shipment gives you the best opportunity to ensure the orders are being shipped on time, to the right destination, and that each contains the right products. Documenting processes and using these reference materials to train team members will also go a long way to maintaining accuracy.
CONVERT THE CUSTOMER BY OFFERING FAST SHIPPING
In the Walker Sands study mentioned above, did you notice that the second most influential criteria for online purchasing was 1 day shipping? Clearly customers want their orders fast. As further proof, we need to look no further than Amazon’s continuing investment in same day delivery. To date, they’re offering this service in 14 metro markets. If Amazon isn’t the best choice for you, don’t worry, you may still be able to reach your customers quickly enough to ensure they make their purchase with you by offering expedited delivery as a premium option. Ideally, you can avoid this extra cost by analyzing your sales data and strategically locating your products near your customers so you can ship by lower cost ground options, but still offer the convenience of next or second day delivery.
FIND A PARTNER
Last, but certainly not least on the list of ways to optimize shipping, is to know when you need help. Third party logistics companies often have greater expertise and scale, better rates, and enhanced capabilities. Making the decision to align with an expert who can handle fulfillment for you, so you can focus on your own business growth, is often one of the soundest long term business strategies for companies who have outgrown their internal capabilities.
At Jay Group, we deliver more than just your shipments. We deliver your brand experience, and we deliver the peace of mind that comes from knowing that your critical logistics activity is on time, on budget, and adheres to the strictest quality management standards you’ll find anywhere. With us on your side, you benefit from our tremendously competitive freight rates, and world class logistics expertise that provides greater than 99% accuracy to our customers.