Amazon is keenly aware that fast shipping is a major key to its success. That’s why it spent billion developing an enormously complex logistics and distribution network that could make 2-day shipping routine. Having largely achieved that, Amazon is not resting there. It is working hard on making next-day and same-day delivery its new standard.
This has powerfully shaped the expectations of the average online consumer. In 2016, a survey by Clutch found that cyber shoppers believed 4.8 days for delivery was acceptable. But now, just four years later, about 50% of shoppers think two days is reasonable.
For small business owners, this presents an enormous challenge. Since consumers are “spoiled” by the Amazon fast-shipping effect, small business owners must scramble to find ways to compete on the delivery issue.
Fast shipping is even more critical for some small businesses than others. For example, a mechanic might order special Subaru performance parts online and need them shipped overnight. Mechanics know that people rely heavily on their cars to maintain their normal life activities. They expect repairs to be completed the same day they bring a car into a shop. But if a local auto part dealer doesn’t have the specific part needed, the part must be ordered. That might create an understandable delay of a day or two. But the key here is the last part of that phrase: “A day or two.”
Giants like Amazon can handle two days easily. But a small business simply does not have the global logistics network and infrastructure to perform the same function. The Clutch survey also found that consumers may not understand what it takes to get a package from Point A to Point B. That puts small business owners at an enormous disadvantage.
Data shows that 45% of shoppers are unlikely to buy again from a company if it takes a long time to deliver packages. Thus, some experts have recommended that small businesses should bite the bullet and simply not promise fast delivery. Another recommendation is to reduce their product offerings so they can concentrate on made-to-ship items and get them out faster.
Yet another suggestion for small business owners is that they add a strategically placed warehouse to improve their reach. Many small business owners balk that this idea, however. By definition, a small business does not have the resources to simply buy, build, or rent a warehouse for the single purpose of speeding up shipping.
The key, then, for small businesses is to rely on those companies that are in the business of shipping. That generally means FedEx, UPS, and the United States Postal Service. It also means working out ways to work with them effectively in terms of reducing the fees they charge. There are many strategies for doing so.
For example, the USPS and UPS flat rate for boxes allow for up to 70 pounds. FedEx is 50 pounds. A small business can adjust their product weight to consistently meet the flat rate and save money.
Another thing to consider is cubic pricing. This means shipping a small, heavy parcel will not be assessed the same fee as a larger parcel of the same weight. Configuring products to take advantage of cubic rates is a way to minimize shipping costs. Managing shipping volume is critical for a small business. A higher shipping volume makes it possible to negotiate a lower rate from shipping providers.
There are many other ways for small businesses to work with the major carriers to leverage faster shipping at an affordable rate.
Parcels stock photo by New Africa/Shutterstock
