Any business owner working in e-commerce needs to be able to react more quickly to the customer’s pain points than most.
After all, pain points can affect not just existing customers, but future customers who might abandon their shopping carts. Of all those pain points, deliveries tend to be some of the most frequent and problematic.
If your fulfillment processes are too expensive, then you may have to charge more for deliveries to make up for it. But that can tend up turning off a lot of potential customers. So, what else can you do to better handle those costs?
Bring a little more of it in-house
There is no denying that outsourcing your fulfillment processes can help you get orders up and running when you don’t have the cash to immediately start investing in warehouses, staff to man it, and equipment to help those processes go more smoothly.
However, that doesn’t mean you should outsource absolutely everything forever.
Looking for warehouses for sale, and hiring staff might be a big initial cost, but it typically costs less once you get it up and running when compared to relying on fulfillment services to take care of everything for you.
If you have some funds lying aside, now might be the time to start taking care of your own inventory management.
Make sure you’re working with the right partners
Due to the cost and sheer effort of managing it, a delivery fleet is likely to be the last thing you bring in-house. In fact, several e-commerce businesses will always work with outsourced partners who are able to more effectively run deliveries full time.
However, that doesn’t mean that you have to turn a blind eye to it.
Make sure that you’re tracking your partners’ performance over time and, if they start getting more inefficient, leading to higher costs, compare truck rates with other potential providers.
Unless they can reward your loyalty by offering you deep enough discounts to make up for the price rises, you should be willing to work with those who can help you make more sales.
Be better prepared for loss
If you’re adjusting your delivery prices based on the overall cost-per-product of fulfillment, then you need to look at instances of loss that can raise those costs on average.
In the warehouse, this might mean investing in more effective inventory management systems that allow you to track your items, reducing the likelihood that they simply disappear from the system. Otherwise, you should look at how you insure items on the road.
A lot of fulfilment providers will offer their own insurance, but going with a third party with it might be able to help you make savings on each item. Those savings can add up if you make frequent or expensive deliveries.
Effective cost management is all about finding better ways to reduce spending without having to impact your processes or offerings to customers. The above tips can help you find ways of doing that.