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The Best Ways to Save Money When Shipping Packages for Your Small Business Automated solutions, more streamlined shipping services and parcel tracking can help businesses not only save time, but also save money.

By Nicole Leinbach Reyhle Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


Parcel management -- the shipping and delivery of packages -- has long been perceived as a "necessary evil and not an opportunity to lower costs or even create opportunities for profit," Brian C. Gibbs, president and founder of Refund Retriever, a parcel audit recovery and parcel management company, recently told me. Gibbs explained that "too often businesses overlook both the value and the need for a strong shipping strategy, something that is actually much easier to implement than businesses often realize."

Related: 6 Secret Tricks to Decrease Your Shipping Costs

There are a variety of reasons why parcel management is so important for businesses to strengthen, but among the most important is that customers nowadays expect their shipping needs to be met with ease, satisfaction and minimal to zero investment. This includes the demand for on-time deliveries and flexible shipping options, something that can be perceived as either a challenge or an opportunity for businesses.

But, to Gibbs' point, these situations don't have to be difficult to overcome. Instead, they should be managed with efficiency while also introducing opportunity for businesses to enhance not only their operations but also their profit. Fortunately, in today's rapidly growing marketplace these opportunities are becoming easier and easier for businesses large and small to implement into their parcel operations thanks to automated solutions, more streamlined shipping services and parcel tracking that can help businesses not only save time, but also save money.

Opportunities and demands of shipping

Pitney Bowes, a global technology company, recently unveiled its second-ever Parcel Shipping Index, revealing a 48 percent growth in parcel volume over the past two years and estimating annual growth to continue to rise at a rate of 17 percent to 28 percent year-over-year between now and 2021. This brisk growth is significantly attributed to the increase in ecommerce activity, with study results suggesting that rising consumer expectations surrounding online shopping are putting pressure on retailers to deliver on convenience, price and the availability of products from around the world. When you factor in the importance of consumer expectations on a retailer's success -- or failure -- it's critical to factor in the realities of parcel management, as well.

Related: 4 Ways Omni-Channel Retailers Can Step Up Their Shipping Game

Jordan Sim, group product manager at BigCommerce, explained to me that "shipping is a critical component in creating a positive customer experience, however many store owners either dismiss it as unimportant, don't spend enough time thinking through the strategy, or willfully avoid it altogether due to its complexity."

To help ease the complexity that parcel management often presents to merchants, it's important to recognize the various opportunities and demands that shipping introduces to commerce based businesses. Sim offers the following five points when aiming to streamline your shipping strategy.

  • Identify serviceable markets: Commerce is global, with potential customers ordering from every corner of the planet. Knowing your customers -- both where existing customers are and where new customers are coming from -- is vital to answering this question and prioritizing your growth strategy.
  • Determine pricing strategy: Setting shipping costs too high may improve your margins per order, but may negatively impact conversion rate. Alternately, setting shipping costs too low has the reverse effect. It's important to stay attentive to industry trends and carefully consider overall pricing strategy, as well as shipping fees and options to remain competitive.
  • Communicate shipping costs at checkout: Customers value transparency, particularly in regards to any costs associated with a purchase, so don't make shipping information difficult to find.
  • Organize fulfillment and label printing: At this stage, the focus is on picking the purchased items, packing and labeling the box, and sending it out for delivery. Don't rush this process. An error in any of the steps could result in your customer receiving the wrong item or not receiving the items at all.
  • Prepare for returns: Roughly 30 percent of all ecommerce orders are returned, so you'll need to consider the fees associated with the returns process as well as your company's returns policy. By simplifying returns with a pre-paid shipping label, you are encouraging customer loyalty and positive word-of-mouth recommendations to new customers.

Robert Gilbreath, VP of marketing at ShipStation, recently told me that to strengthen each stage of the parcel lifecycle mentioned above you should -- quite simply -- simplify it. "It's all about finding ways to get your time back, so you can work on the core of your business," Gilbreath said.

To help achieve simplicity while still effectively accomplishing your parcel management goals, automation is an asset for businesses large and small to incorporate into their shipping strategies. Automation allows merchants to easily customize their shipping and order fulfillment processes while saving them time and strengthening their shipping procedures along the way. Fortunately, commerce oriented companies such as Square and BigCommerce, among many others, make shipping from various marketplaces with various shipping providers and solution companies practically turn-key thanks to their integrated and automated solutions. As a merchant, this integration is key -- particularly when you're trying to save both time and money.

Related: The Holy Grail of Profitable Shipping (Infographic)

The final -- and often hidden stage -- of the parcel lifecycle

As the expectations of commerce continue to rise and consumer demands for stronger parcel expectations continue to increase, it's critical for companies to factor in the realities of parcel management and how these realities can impact -- in their favor or not -- their businesses. One thing businesses should not overlook, however, is the conclusion of the traditional shipping lifecycle. There is another stage that is important for businesses to factor into their parcel management strategy, with a core centration on increasing profit as their end goal.

"Businesses are quick in accepting the charges billed to them by carriers such as FedEx or UPS, yet often there are additional fees applied to these bills that are not accurate," said Gibbs, who founded parcel auditing company Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of shipment auditing.

Through the automated services provided by shipment auditing companies, businesses can gain an accurate understanding of fees applied in addition to a package's base rate for shipping -- something that Gibbs said is confusing for most merchants. The clarity delivered by this service, however, is far from confusing when delivered via an automated software that identifies extra, incorrect or unforeseen charges that include fees applied to select residential addresses, Saturday delivery charges, fuel surcharges and more -- accounting for up to 40 percent of overall FedEx or UPS invoice costs. And just when you think these factors may not impact your shipping strategies, think again. UPS and FedEx collectively have recognized over 100 extra charges, with many varying in names and cost for a single service. Refund Retriever, however, shows nearly 300 additional fees that are not a part of the base shipping rates of these parcel providers. When these fees are unveiled by a parcel auditing company, businesses can gain refunds and hence, gain profit for their businesses. Because of this, this final stage of the parcel shipping lifecycle is one not to overlook.

Finally, Gilbreath suggests that understanding the process is the first step in strengthening your shipping operations, while Sim encourages businesses to "take the time to periodically review your parcel management process, which is not static."

As the consumer marketplace continues to evolve and online shopping continues to increase, parcel management will only become more and more important for businesses to prioritize. Make sure your business excels in this space to truly meet the demands not only of your consumers, but also of your business.

Related Video:

Nicole Leinbach Reyhle

Founder of Retail Minded & the Independent Retailer Conference

Nicole Leinbach Reyhle is the founder and publisher of Retail Minded, the co-founder of the Independent Retailer Conference and has contributed to publications and companies that include IBM, Fiverr, Forbes and more. Additionally, Reyhle is the author of the book Retail 101: The Guide to Managing and Marketing Your Retail Business from McGraw-Hill and has been the spokesperson for Small Business Saturday from American Express since 2014. Follow Reyhle on Twitter at @RetailMinded. 

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