The cost of all goods has risen substantially this year due to inflation, rising gas prices and supply chain disruption. It’s no surprise that the cost of shipping goods has increased, eating into business profits.
When you have a public trained by Amazon to expect free shipping for all of eternity, businesses are forced to take shipping costs on the chin to remain competitive. Finding ways to save money requires skill and knowledge and may require the assistance of someone trained to conduct a parcel audit.
Couple that dilemma with an increase of demand which has become more difficult to meet due to slowed deliveries held up at the ports. Businesses have had to find alternative, local suppliers and absorb the cost of higher materials.
People who once preferred only to shop in stores were compelled to buy products online. Now that people are accustomed to ordering online, comparison shopping among many retailers and not paying for shipping or returns, the shipping industry and the major carriers are faced with increased volume at a time when it’s difficult to find competent and willing labor. No longer will the carriers award guaranteed service refunds for products not delivered on time. It’s just the norm to get things late and there’s not much you can do about it. You must inform your customers what they should expect and do your best to remain competitive by providing great customer service.
A few ways you can rein in costs are:
- Evaluate alternative suppliers who can provide quality within your desired lead time. The terms of the agreement are just as important as cost; do not short sell yourself on service which could cost you customer loyalty.
- Hire a logistics consultant to evaluate shipping costs, bottlenecks, waste, etc. to determine where you can make improvements to improve efficiency.
- Facilitate remote working to retain quality employees and offer flexibility to make working for your business desirable.
- Meet with your floor managers to hear their input about where improvements can be made and what could be slowing down productivity.
- Use ERP software to reduce duplication and repetitive tasks, saving time and money.
The pandemic taught business owners that survival requires perseverance, creativity, and a willingness to try new things. The way we do business now involves more online channels, internet conferences and acceptance of remote working and meeting situations. While many were happy to return to the work atmosphere to socialize again, some preferred working at home without distractions, the cost of commuting, dressing for the office and a longer workday.
If businesses take the lessons they learned and use them to prepare for future, health related scenarios, economic changes or political situations that cause unanticipated business disruptions, they can be better prepared to survive and thrive while their competition struggles to keep up.
High costs aren’t likely to subside any time soon. Being profitable requires trimming the fat where possible and trying new things that will be resistant to disruptions when new local laws kick in and chaos sets itself in motion.
