Like the classic David and Goliath story, achieving small business growth in the shadow of gargantuans like Amazon can feel like you need a miracle.
Specifically, the free shipping perk of Amazon Prime has become something of an expectation among consumers with everyone they do business with. What was once considered an occasional incentive has now become a price of doing business. Retailers of all sizes are feeling pressured to join the free shipping club, even if it means cutting margins or not profiting at all on some items.
As the Atlantic points out, “free” shipping isn’t free. Someone always has to pay for it. Sure, you could always charge for shipping to maintain your margins. But this often means losing out on sales as consumers search for retailers that will ship comparable items for free.
It’s not a losing battle, though. Remember that David took down Goliath with a stone and slingshot. As it turns out, a solution for small business growth can be just as simple, too.
In essence, it’s all about knowing how to use your strengths and available resources. Remember, you’re probably not trying to be a Herculean equal to Amazon and Walmart. Instead of trying to defeat the giants, why not tap into the powers they hold over you?
Here are four small business growth strategies that can help you overcome the free shipping challenge.
Small Business Growth Hack #1: Enlist in Amazon FBA
As the old saying goes, If you can’t beat ‘em, join ‘em. Maybe it’s time to throw in the towel and team up with Amazon and their FBA network.
Amazon FBA allows retailers to ship their goods to Amazon and let the company serve as a third-party logistics team. You can list your products for sale on Amazon, and they handle the rest on your behalf. This includes tapping into their Prime 2-day shipping offer, giving customers even more reason to do business with you.
Anyone can become an Amazon FBA seller. However, you will need to get permission from Amazon to sell in restricted categories, such as alcohol, animal-related products, and electronics, for example. See the complete list of restricted categories on Amazon for more details.
Small Business Growth Hack #2: Team Up with 3PLs Close to Your Customers
Part of offering free and/or fast shipping lies in minimizing transit time. A third-party logistics (3PL) provider can bridge the gap so that items are promptly shipped by a professional warehouse team located anywhere in the country, ideally close to the destination to minimize shipping expense.
3PLs spur small business growth by handling all the tasks that happen after the customer places an order. Your items are stored in their warehouses. When an order is placed, the 3PL team locates, picks, and packs the order for you. Depending on your service, they may also handle things like returns and customer service on your behalf.
In terms of shipping costs, many small businesses use 3PL services because they may be able to access lower shipping rates. Because 3PLs serve multiple businesses, they often have deals with carriers and pass those bulk savings on to you.
Shipping times are also reduced when the 3PL uses best-in-class warehouse management software like Zenventory. Software optimizes their operations and can even connect directly to your e-commerce platforms, such as Shopify.
This means that your 3PL will receive your order as soon as it’s placed rather than having you serve as an intermediary. The result: faster order fulfillment for happier customers.
Small Business Growth Hack #3: Incentivize Slower Shipping Methods
While free shipping is an expectation among many consumers, it’s not an end-all solution to doing business. When customers aren’t in a hurry to receive items, they may be more inclined to choose other shipping methods if they come with other attractive incentives.
For example, some online retailers (including Amazon!) offer discounts if you choose slower shipping. Since slower shipping methods are usually cheaper for the retailer, you have a little more wiggle room to offer monetary incentives.
In fact, according to Modern Retail, a “no rush” shipping approach could save retailers anywhere from 3% to 32% on logistics costs. This largely depends on the number of orders that request no-rush shipping, so making an attractive incentive is key to maximizing its benefits.
Small Business Growth Hack #4: Avoid Backorders at All Costs
Supply chain upset has been a common theme in the last year due to the global pandemic. We’ve seen first-hand how customer loyalty flew out the window when supply shortages became rampant. This means you can’t always rely on your brand to carry you though, no matter how large of a customer base you have.
No retailer has been immune to COVID’s effects, but consider it a learning opportunity. It has allowed retailers to see just how valuable a rock-solid supply chain can be.
You work hard to get orders, and maintaining a healthy inventory allows you to capitalize on every order without fail. Use automation tools to set alerts for low stock levels and trigger reorders well before items are depleted.
Remember, every time you have to turn away a sale due to backorders, you risk losing that customer to a competitor for good.
Final Thoughts: Efficiency is Key for Business Growth
Tackling the free shipping challenge is just one example that underscores the importance of efficiency. When retailers can streamline operations, from shipping to inventory management, small business growth becomes more feasible.
Want to take your small business to the next level? Discover how Zenventory can help you improve your logistics.