How Small Businesses Can Compete With Amazon on Shipping
As a small business, there are lots of things you can do better than the big guys. You can offer more personalized service. You can pivot quickly to respond to trends. You really understand your specific niche or demographic. One thing that’s not the easiest? Competing with big-box retailers or online giants like Amazon when it comes to shipping. Amazon Prime has trained all of us to expect deliveries fast and (almost) free... and it means that smaller retailers need to find ways to offer similar options. Or at least the illusion of them :) Here are 5 tips and ideas on how to optimize your shipping processes, lower costs, and improve your bottom line.
1. Use the free tools available to you!
Almost every carrier (UPS, FedEx, and USPS) offer some free boxes. Not only does this eliminate the need to buy your own packaging but can save you money on shipping, too! Shipping providers are optimized to use the standard size boxes they offer and often charge more for other shapes or sizes. So, as cute as a custom printed box is, it could be worth it to focus on what’s inside instead (branded tissue paper or inserts, for example) and just use the standard or flat rate boxes offered by your carrier of choice.
2. Set shipping tiers strategically.
Consumers are hesitant to pay for shipping but will often gladly spend the same amount to get their cart above a minimum requirement in order to get it for free. Paradoxically, people are often willing to pay extra for express shipping methods to guarantee a faster delivery. So how do you use this little bit of odd buyer psychology to your advantage? Set your shipping tiers strategically. For example, offer free ground shipping - but only on orders over $X. Then, offer an upgrade option to express delivery for $Y. The result will be higher average cart values (people spending more in order to get “free” shipping), or people spending more AND paying a premium for faster delivery.
3. Bake the cost of shipping into your products.
This one always seems to rub merchants the wrong way but I’m telling you this works! Abandoned cart data everywhere shows us that people bail out the second they see your sky-high shipping rates. The solution? Just bake those costs right into the cost of your products. Instead of selling something for $24 plus $12 shipping, make it $36 + free shipping. Or $30 + $5 flat rate shipping. The psychology here is that paying for a product has value (you get something in exchange for your money) but paying for shipping feels like a loss (you’re just paying to get the good you already paid for). I think the biggest mistake I see smaller merchants make is feeling like they need to pass on all of their business expenses to customers outright. That’s like going out to dinner and getting charged to use a fork and knife ☠ No one wants to see how the sausage is made.
4. Use a shipping extension like Easyship!
The reason the big guys can offer free or low-cost shipping is because of the sheer volume of shipments they send out. They’ve negotiated with carriers to get their rates way down and also have high-tech fulfillment centers to make sure every step of the shipping process is as optimized as possible. But even if your fulfillment center looks more like your laptop + a roll of packing tape, using a shipping extension like Easyship can be your secret weapon. It’s the #1 way to make sure you’re in the best position to compete with the Amazons and Walmarts of the world.
How does Easyship work?
Short version: they negotiate with 100s of couriers all over the world on your behalf giving you enough purchasing power to take advantage of discounts of up to 70% off retail. The cloud-based software then automates everything: you can compare shipping quotes, create rules or filters for different products or countries, generate and print shipping labels, schedule pickups, and monitor everything from one simple dashboard. You can also offer a branded shipment tracking page for your clients which can help boost buyer confidence and reduce time spent responding to customer service inquiries.
Even if you ship just a few shipments each month, a shipping extension like Easyship is a no-brainer just for the time savings alone! It’s also the winner for me when it comes to easy automations with Zapier. I love it when I get an email the second a package is delivered!
Bottom Line
Using all the tools, technology, and resources available, you can offer a premium shipping experience without seeing red. Combined with some simple pricing strategies, your small business can ship as smart as the big guys and create happy, loyal customers in the process.
