As the leaves begin to turn and the end-of-year rush approaches, small business owners across the country are gearing up for their most crucial stretch of the year: the peak holiday shopping season.
While eye-catching promotions and festive product launches dominate customer headlines, the real unsung hero behind a successful holiday performance is happening behind the scenes in fulfillment centers, stockrooms and back offices. In an era where consumers expect fast, cheap and precise delivery, shipping and logistics can make or break a small enterprise’s bottom line.
This year, independent retailers are confronting a complex supply chain landscape marked by fluctuating freight costs, tight delivery windows and shifting carrier surcharges. Rather than leaving their operations to chance, proactive business owners are starting early—auditing inventory, diversifying carrier partnerships, implementing smart technology and setting realistic customer expectations well before the first cyber deal goes live.
And with consumers shopping earlier than ever this year, John Steinitz, Chief Strategy Officer at ShipStation Global, advises retailers to start preparations as early as possible.
“Since smaller businesses tend to not represent as much volume as the larger retailers, they really need to make sure they’re in the queue early and have that guaranteed capacity up front,” he says.
Nail Down a Third-Party Logistics Provider
Having one single warehouse in a certain location is great for shipping to consumers in the surrounding area, but what about shoppers that are located across the country? For situations like this, Steinitz suggests working with a third-party logistics provider to supplement your existing warehouse.
“Having additional warehouse locations can dramatically reduce your outbound shipping costs and improve speed,” he notes. “As merchants grow, one of the challenges that tends to happen around the holidays is carrier surcharges. Being smarter with your inventory placement can help offset those surcharges.”
Even though surcharges are always expected during the holiday rush, this year is expected to be particularly bad with the increase in fuel prices due to the war.
“Because of this, one thing we’re seeing our customers do is onshore some of their inventory ahead of time, even if that means they may have higher domestic storage costs during the peak season,” Steinitz says. “It at least ensures that they have products in stock.”
Evaluate Your Shipping Carriers
One of the biggest mistakes a retailer can make is to pick one carrier and stay with them. Steinitz emphasizes the importance of shopping around so you can find the best options that suit all your shipment types.
One way you can start this is by knowing what your true costs are.
“Think of it as if you are comparing prices for hotels or airlines. You don’t book something based on the first price that you see,” Steinitz notes. “We encourage our customers to do the same. You can set up your own rules based on weight, zones and product types.”
Communication Best Practices
Communication is crucial when running a business. You need to inform shoppers of any cutoff dates for shipping to guarantee a holiday delivery and prevent unhappy customers.
“It’s important to be very clear in your communication if you have a shipping cutoff date or any deadlines that consumers need to be aware of,” Steinitz says. “And be sure to give yourself a buffer, too. Even if you have a promise from a carrier, something could still happen such as a delay, and then you will get blamed for it, not the carrier.”
In situations like this that are time sensitive, small businesses can really benefit from having a backup carrier.
“You never want to give 100% of all of your businesses to one vendor because that creates too much dependence on something that could easily fail,” Steinitz advises. “Have some backup options, where maybe you give 60% or 70% of your volume to one carrier, but give the rest of your volume to another carrier. This way, you can switch between them if you need to.”
Create a Seamless Return Experience
Free shipping has become a standard across the retail sector, and in many cases, customers will abandon their shopping carts if there isn’t free shipping. This can be difficult for smaller businesses that don’t have the margins to offer free shipping.
One way to combat this is by ensuring you have a good, consistent and easy return experience across all the platforms you sell through.
“If you have a Shopify storefront or sell through your website, you may also sell on a variety of other third-party marketplaces such as eBay, Amazon or Etsy. Make sure you have a good, consistent and easy return experience set up because that will help to drive higher purchases,” Steinitz says.
Being able to seamlessly return a product is crucial for the holiday season, so even if you can’t offer free shipping, small retailers can still snag a sale by offering an easy return process.
And a return doesn’t always have to mean the loss of a sale. Returns present an opportunity for the customer to walk away with a different product.
“At ShipStation, we try to get our customers to think of returns as a touchpoint ─ a way to engage with shoppers in a more productive fashion,” Steinitz says. “For example, you can tell the customer to keep the item in return for a coupon towards a future purchase. Or maybe you offer them a great amount of in-store credit. This way you don’t bear the cost of the return.”
There are a variety of other ways that retailers can engage with their customers to offer better alternatives than a return. You can offer them a different size in the product if it doesn’t fit, or you can offer an exchange for a completely different item.
Make the Most Out of the Holiday Season
The rush of the holiday season can make anyone go crazy. It’s important to not let the stress wear down on you and your business too much.
Shipping and logistics can already be a hassle during the year, so don’t let it get worse this time of year when there are a million other things that need to be done. Utilize these tips to help ensure a smoother, easier holiday season.
