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5 Ways to Reduce eCommerce Shipping Costs

“Free shipping” — it’s what customers today expect to see when they shop online. So how can an eCommerce seller absorb those shipping costs without wreaking havoc on its profits? You could just raise your prices, but customers won’t like that either. Fortunately, you can change things about the way you ship to minimize the financial impact.

Decide how much you can absorb

You just may not be in a position to pay 100% of the shipping on every single order. But you could still favorably impress customers by offering it on orders over a certain dollar amount. Figure out what that amount is, taking into account average order value, surcharges for weight or size, and so on.

Downsize your packaging

Lose the habit of using the same size box for many different sizes of the product. Smaller boxes cost less to buy. Plus, many carriers calculate their shipping prices based on a combination of size and weight called “dimensional weight,” so a smaller box will cost less to ship even if it weighs the same as a bigger one. To make box selection easy, there is software that will do it for you based on each SKU’s measurements and weight.

Also, are you automatically using bubble wrap for every item, whether it needs it or not? Invest the time to analyze each SKU’s real protection needs, especially those that are already boxed by the manufacturer. Conversely, giving some products more protection can prevent damage in transit and reduce the number of returns.

Choose hybrid shipping options

In hybrid shipping, your carrier (such as FedEx) gets the package from you to its destination city, then hands it over to the U.S. Post Office for local delivery. This enables significant cost savings while keeping the customer happy with your speed and service.

Compare carriers

Look beyond UPS and FedEx. There are many other shipping services out there who can provide better prices and equal if not better service.

Automate shipping processes

Let shipping software save you time, manpower, and money in every step of the fulfillment process, from verifying address accuracy to printing labels to tracking deliveries.

These days, no eCommerce seller can afford to leave its shipping process on autopilot. Look for new solutions and strategies to minimize costs, and keep your net profits right where you want them.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

How Small Retailers Can Win Big Over Mega Stores

Cutthroat prices, huge inventory, massive advertising bucks — a small retailer is bound to feel like David going up against Goliath when competing with the big chains. But, like David, you can win the battle. The trick is to fight it on your ground, not theirs.

Leverage localness

We are located in South Florida and every winter we see our chain store branches offering cold-weather gear, even though it’s rarely needed in our climate. Large national chains are by their nature generic; it’s virtually impossible for them to offer any local flavor. You, on the other hand, can tailor your merchandise mix to the specific tastes and needs of the people in your area.

Stress quality and value

There’s no way you can beat the prices of your big-box competition. So go the opposite route and offer products that are made well and will serve a customer’s needs for years. They cost more but give greater value than an item that fails within a few months of purchase.

Promote uniqueness

Seek out products from smaller manufacturers that won’t be found in big box stores because they can’t meet such large orders. Customers love having alternatives to the mass-produced merchandise that’s the same from one chain to the next.

Help customers find you in local online searches

There’s no way you can top the search engine results page for nationwide searches. But you can use local SEO strategies successfully. They are actually weighted in your favor because Google will penalize any business that sets up multiple website pages for every one of its locations.

  • Create a Google Business page (or check the one you already have for completeness and accuracy)
  • Make sure your location appears on every page of your website
  • Direct inbound traffic from search engines to a location-centric landing page on your website (your address, phone number, store hours, location map)
  • Display links to other local businesses and organizations on your website

Connect with the community

Build customer awareness and loyalty by getting involved with them.

  • Host or participate in community events
  • Contribute to local charities
  • Sponsor a local sports team
  • Form strategic partnerships with complimentary local businesses
  • Invite local social media influencers to visit your store and sample your merchandise

Deliver superior customer service

You have the advantage of one-on-one relationships with your customers, which no big box store can equal. Provide a memorable experience by making them feel recognized, comfortable, and cared for where they shop.

Big stores will always be big players in the retail scene. But small retailers can reach local customers on a level above and beyond what national chains can do. Those are the ones that will survive and thrive.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

7 Steps for Retailers to Reduce Inventory Shrinkage

Inevitably, somewhere between the manufacturer and the cash register, some of your merchandise disappears. Every retailer has this problem; in fact, it adds up to more than $42 billion in annual losses nationwide. The three biggest causes of shrinkage are administrative errors, employee theft, and customer theft. Here’s how to counteract them.

1. Use a good inventory management system.

Wherever human beings are doing the counting, organizing, and recording, errors are sure to happen. Choose software that:

  • Organizes product and vendor information
  • Integrates with your POS system so that inventory data is automatically updated after every transaction
  • Generates accurate purchase orders

2. Tighten up your inventory receiving process.

To minimize mistakes:

  • Cross-check against the PO at the time of delivery
  • Call the vendor within 24 hours to resolve inconsistencies
  • Tag and label merchandise immediately

3. Record sales consistently.

Any currently available POS system will do this automatically.

4. Take physical inventory.

It’s the only way to reveal discrepancies between what your inventory software says you have and what you have. Cross-reference the manual counts against software records to see where shortages are occurring, for example with a particular cash register or employee, or during the same shift and day every week.

5. Train employees in loss prevention.

Letting everyone know that you have a strong plan to stop theft can deter both employees and customers.

6. Improve pre-employment screening.

The reality of retail is that employee turnover is high and company loyalty usually low. Besides, employees have less supervision and easy access to your valuables. Do your due diligence in hiring people with no history of dishonesty, including nationwide criminal background checks and verification that resumes are complete and truthful.

7. Install a security system.

Large, visible cameras act as warnings to thieves to pick an easier target. They also help catch and convict criminals after thefts occur.

Inventory shrinkage is a challenge that will never go away. And that means your efforts towards loss prevention can never stop either. Success lies in ongoing processes and continuous attention to keep your merchandise right where it belongs.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

3 Great Cash Flow Ideas for Retailers

What do a used book store, garden nursery, and boutique clothing shop all have in common?

No, this isn’t the set up to a joke. Unfortunately, all three types of businesses are at risk of failing if their cash flow isn’t in good shape. According to the Small Business Administration, “inadequate cash reserves” is a top reason small businesses close their doors for good.

So whether you sell novels, shovels, or dresses with ruffles — if you’re a retailer, cash flow is king.

What exactly is cash flow?

Think of it like a checking account. Cash flow looks at all the money coming in and out of your business each month. If there’s more coming in than going out, you’re in the green! If you’re spending more than comes in, read on. That means your cash flow is negative and your business could be in trouble

Here are three simple ways to get your cash flowing in the right direction.

1. Bundle products

If you sell several accessories apart from your core offering, try packaging them together with a small discount. This can also be an effective way of clearing out dead stock while creating goodwill with your customers, who feel like they’re walking away with a great deal.

2. Understand the risks of discounting

If you do decide to bundle products or offer another type of sale, make sure you know exactly how that will impact your bottom line. You should know the profit margins on every product you sell and your overall cost basis – it’s the only way to determine if you’ll break even with the sale or take a loss.

3. Encourage repeat business

Offering perks or freebies to returning customers helps create loyalty and makes it easier for them to choose you over other options. Go old school with a punch card, get creative with a contest, or print an offer on receipts that are good for a future purchase.

If you’re struggling to determine the state of your cash flow, it could be time to call in for some backup. With Xendoo’s suite of affordable bookkeeping and consulting services, you’ll be able to spend more time at the “cash-out” bringing the cash.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Selling on Amazon: To FBA or Not to FBA?

Unless you’re living under a rock on the moon, you’re well aware that Amazon is the eCommerce success story of the century — not only for Amazon itself but for thousands of independent sellers who take advantage of its marketing reach and customer confidence. Amazon’s FBA (Fulfillment By Amazon) program goes a step further: it gives smaller eCommerce businesses the clout and convenience of its warehousing, shipping, and customer service facilities.

So if you use FBA, you do less than half the work of the transaction: listing your product on Amazon and getting your merchandise shipped to an Amazon fulfillment center. They take care of the rest: merchandise storage, order processing, picking, packing, shipping, and shipment tracking.

A fundamental decision any third-party seller on Amazon must make is whether to use FBA or its fulfillment facility. Here are some things to consider:

Comparative costs.

Which will be more profitable: paying for your warehousing, packaging materials, and staff to do the picking, packing, and delivery to the shipper; or paying the FBA fee to have Amazon do all that for you?

Amazon makes it easy for you to compare the numbers with this Fulfillment by Amazon Revenue Calculator. Fill in the item price and your costs, then click “Calculate” to see the FBA costs for the same item, and which is your best option in terms of net profit and net margin.

Time investment.

The more you sell, the more time fulfillment takes out of your day. The time that should be spent on management and development, not putting items inboxes. This is often a major roadblock to scaling your business.

Sales tax obligations.

When some or all of your inventory is stored in and shipped from Amazon warehouses, you may be required to collect and remit sales tax in the states where those warehouses are located.

Amazon Prime eligibility.

Only third-party sellers who use FBA are Prime eligible, and many say that this is their number one reason for doing so. When customers see “Fulfilled by Amazon” on the product page, they have confidence that:

  • Their purchase will be delivered in just 2 days
  • They are getting a better deal because shipping is free
  • They will receive excellent shipment tracking and customer service

Even Amazon shoppers who are not Prime members often choose to buy from a seller who is Prime eligible rather than one who isn’t. This gives FBA sellers a huge advantage over those who do their fulfillment.

Each business must weigh the pros and cons of Amazon FBA concerning its needs and goals. But we think that in 99 cases out of 100, the advantages far outweigh the costs. It’s certainly worth a try.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

Increase Efficiency to Reduce Retail Labor Costs

While retailers struggle to maintain their profit margins, labor costs continue to rise. Check out these smart ways to keep them under control.

Fine-tune schedules.

This can be tricky in retail; there may be too many employees on the job when customer traffic is low, or not enough when the store is jammed. Analyze your POS sales data to more accurately schedule the right number of employees for each shift. (Or obtain scheduling software that will do it for you.)

Avoid overtime.

Instead of having your full-time employee work extra shifts at the time and a half, pay a part-time or temporary worker the base rate to cover the same hours.

Eliminate time theft.

A time and attendance app will ensure that employees are not being paid for the time they didn’t actually work: coming in late, leaving early, long breaks, rounding up hours or buddy clocking in/out.

Cross-train employees.

Most people are happy to learn new skills and take on new roles. And you’ll be happy that fewer people are needed to get the work done. Plus, if one employee quits, you’ll have another ready to step in without the costs of a new hire.

Reduce employee turnover.

Recruiting and hiring new employees is expensive; it’s much more cost-effective to keep the ones you have. That doesn’t mean you have to give them raises; the number one reason people leave a job is happiness, not money. Provide opportunities for engagement and career advancement to keep them on board.

Increase employee productivity.

Another benefit of keeping employees happy is that it also keeps them more productive and efficient — up to 20% more, according to some studies. That means you could get the same work out of fewer people.

Re-evaluate wages and pay structures.

  • Check whether your pay rates are consistent with industry norms at PayScale or Glassdoor. If they’re too high, bring them in line for new hires.
  • Convert sales roles to a commission-only pay structure.
  • Give pay raises based on performance, rather than an automatic annual increase.

The best way to reduce labor costs isn’t to reduce staff. It’s to increase efficiency in managing the human resources you already have. That’s how you have your cake and eat it too: keep customer satisfaction while taking a giant step toward improving profit margins.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

a person writing on financial reports

6 Ways to Cut Overhead Costs

Every business has to spend money in order to make money. Here’s how to keep those ongoing expenses from getting too high and impacting your bottom line.

Take a fresh look at every single expense.

Chances are, some of them have become a habit but can now be either eliminated or achieved in a more cost-effective way.

Re-negotiate supplier and vendor contracts.

  • There may be things in there you don’t need anymore.
  • On the other hand, you may find that buying more services from one company costs less than piecemealing it out to several suppliers.
  • Ask for a better deal from existing suppliers.
  • Shop around for more favorably priced suppliers.

Allocate more marketing efforts to free or low-cost channels.

  • Word-of-mouth and tell-a-friend promotions to existing clients.
  • Social media campaigns.
  • Strategic partnerships with other local businesses.
  • Employee sales competitions.
  • Testimonials from satisfied clients.

Centralize purchasing.

One person in the company should handle it all, from office supplies to phone/internet providers to equipment rentals. This person will:

  • Prevent duplications, unexpected shortages, and confusion.
  • Be good at wangling better deals, concessions, and discounts.
  • Shop around for the best offers.

Re-think your office space.

  • Do you really need to be leasing so much space?
  • Do you have too much inventory/equipment on hand, taking up storage space?
  • Is there another space available that offers equally good access for current and prospective clients at a lower rate?

Control labor costs.

  • Avoid paying overtime by fine-tuning scheduling or converting to part-time employees.
  • Reduce turnover and hiring expenses by maintaining a happy, fulfilling work environment.
  • Cross-train employees to fill more than one role.
  • Prevent time theft with an app that tracks actual hours worked.

Solving the overhead problem is all about baby steps. Chip off a bit here, a bit there, and keep a year-round watch on expenses. It will all add up to some nice, healthy profit margins.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.