Shipping isn’t a very sexy topic in the startup scene, but it is still a crucial part of business. It’s a challenging problem to solve, and not one you’re likely to do over night. It has the potential to crush a business dealing with inflated costs just to get products to the user. With these tips, you’ll be able to hammer out some of the details in your business plan for shipping to customers anywhere in the world.
Determine Cost
The first thing a business should do is determine the costs of shipping, and look for ways to cover those costs. Most companies online will offer some kind of shipping service to a US mailing address. Usually it’s standard mail delivered within one week or five business days.
Keep in mind that your shipping component shouldn’t be looked at as a part of your long term revenue. Most companies will take a loss on shipping costs so that customers won’t resent the brand. There are also other ways to subsidize those costs, like hiding some of it in the product price itself.
If you want to offer goods internationally, you’ll need order fulfillment services that can forward mail to addresses based outside of the US. International shipping can be costly, and difficult to track if you don’t use the right company.
Promotional Shipping
Companies like Amazon pride themselves in “Free Shipping” as a promotional tool. This is a viable strategy for any budding business, but it does come down to cost. Amazon has always subsidized its shipping costs, building its business on gaining market share as opposed to profits. Some businesses aren’t in the position to absorb those kinds of costs. Instead of offering full-time shipping, consider offering free shipping on certain items, or for orders over a certain dollar amount.
Handling Returns
Another concern you should have when you’re shipping a product is what happens if the item is returned. Returns will cost you money subsidizing the packaging to send the item back to the factory. If the customer requests a replacement, you will pay for the replacement item itself along with the shipping costs for the new product. It is not uncommon for companies to ask customers to split these costs.
Final Thoughts
Shipping inside or outside the US presents costs and complications that must be ironed out before an ecommerce business can find success. Do not try to compete with shipping as your prime selling point, instead look for ways to cover some of these costs and offer a better product.
