Shipping costs have risen 12 per cent annually, driven by soaring fuel costs domestically and internationally. Labour market volatility and the rising cost of warehouses have also played major roles according to Steve Zammit, CEO of the Australian logistics technology platform, Interparcel.
The Australian Bureau of Statistics reports a 10.8 per cent rise in the cost of postal and courier pick-up and delivery services in the past 12 months. With the ongoing cost of living pressure affecting eCommerce, this has greatly influenced the way people are buying.
Major courier companies have invested in larger warehouses, distribution centres and technology to support and handle the growing demand in the eCommerce industry, ensuring they can keep up with rising parcel delivery volumes – but this comes with higher costs that are affecting customers.
This means that SMEs need to get savvy with their operations now, more than ever. Businesses should run a business check every six months, with a bigger focus around processes and procedures, particularly in shipping.
To lift common challenges that many SMEs are facing from the economic pressures felt within the shipping industry, here are five major factors eCommerce businesses must consider to streamline their processes and cut back on costs.
5 Cost-Cutting Solutions for SMEs Amid Growing Economic Pressures
1) Offer more choices at the checkout stage to reduce cart abandonment
Offering customers choices at checkout is crucial for eCommerce businesses to help reduce the demanding issue of cart abandonment.
After all the hard work to drive traffic to your website, whether through ads or influencers, the last thing you want is to lose a customer at checkout because you’re only offering one shipping option.
For example, if a customer needs the product for the weekend or as a gift, it is highly likely they will abandon the cart if only standard shipping is available. Offering multiple shipping options like express or same-day delivery can prevent this.
2) Use shipping technology to save time on daily tasks
The deployment and use of shipping technology enables businesses to focus on growth.
Automating manual processes in particular can free up more time for other business priorities. At Interparcel, we’ve been helping small and medium-sized businesses operate efficiently for 15 years and we’re seeing a lot of retailers are still doing work manually, such as creating shipping labels and preparing orders for pickup.
However, this can all be automated, saving time and reducing errors. Our platform allows you to import orders, select courier services, process labels, and update customers with tracking information.
3) Conduct regular health checks to ensure processes are in line with new business developments
There’s a lot that businesses can control, one of which is performing regular health checks every six months.
Implementing simple improvements such as re-organising your warehouse can make a big difference in time management.
For example, if your most frequently bought items are stored in the back, re-arrange them so these are closer to the dispatch area to save time.
Small adjustments like this, combined with efficient shipping management, can have a major impact on the business and the post-purchase experience for your customers.
4) Consider the delivery preference of your customers
Some customers may prefer one courier service over another, so it is vital that businesses consider their preferences in all stages of the buying experience.
Without offering these critical choices, you risk losing sales. At Interparcel, we provide technology that allows businesses to offer calculated rates at checkout for platforms such as Shopify and WooCommerce.
This ensures that customers have options, such as Australia Post for standard delivery, or have other alternatives such as Fedex Express or StarTrack for express deliveries.
It’s important to consider your customer preferences as some may prefer a courier because they know drivers can deliver at certain times, while others may prefer using Australia Post parcel lockers due to busier schedules.
5) Set up international shipping to leverage and maintain competitive advantage
One strategy business can implement to help maintain competitiveness is exploring international markets. We’re seeing a huge demand for Australian eCommerce products, especially in New Zealand and the USA.
Setting up your business to ship internationally is straightforward and relatively competitive compared with shipping domestically. Shipping to New Zealand, for example, often takes the same time as shipping within Australia. This can open new revenue streams for businesses, especially in times of rising costs.
