The year is 2020 and most people are not purchasing consistently online. With the COVID-19 pandemic even more and more people are shopping through eCommerce. It really is the truth that the new normal is shopping online and having the convenience of shipping to your door becomes mainstream. With where I work now I have seen so many eCommerce companies succeed and also fail with the unfortunate circumstances of bad choices. This is something that I really don’t like to see. So today I want to go over some things that I saw failing companies do and areas they ignored which actually ended up costing them enough money to begin a downward spiral. The thing is that where you shop for bags and boxes can have a massive impact on your bottom line. The revenue savings from purchasing your basic baseline products that you know you are going to use can be the difference between success and instant failure.
The first thing I always tell people when they are getting into eCommerce is to understand that every item they sell will be shipped. They all laugh and think I am talking really basic, but I then like to go into the fact that shipping supplies make and break companies. When competition is tight and maybe you are facing 300 people in the same industry then you need to be able to stay ahead of be competitive. So how do you do this? What if those 300 companies are all purchasing the same items from the places you are? Well, then you have to cut corners and find ways to stay ahead to either sell at a lower price or offer a better shipping rate or discount. This is a really big deal and you must know how to do this or you will end up losing in the long run.
The first thing you need to do is to find the best source for all your shipping supplies. Most people fail right here and at this point. They simply do not search hard enough for the best company. Or they don’t negotiate enough for the best deal and they end up losing lots of margins on each and every single item they sell. It certainly is hard to stay competitive when every item you sell loses you some money. What I see the most is that people always shop one of two places.
The first place they shop is a local store. It is really nice to put that you only shop locally and all your products are shipped with local goods. People like this and it can be a selling point. The fact is that it is usually only successful if your local store is an industry leader and able to give you the same discounts and rates as a large nationwide company. This is why most little companies that shop locally end up losing because their rates are twice as high and their options are usually lower.
The next option is Amazon. This is where most people shop and if you are doing this for an office and picking up regular supplies more power to you. But the costs are still higher than you can get elsewhere and people simply give up and concede that convenience is worth more to them. Find a major manufacturer online instead and negotiate until you crush amazon prices. That is my advice and what you should attempt to do.
I have been in a whole lot of different industries throughout my career. It has led me down many paths and some of them were revolved around manual labor and other management. The joy of being able to be in many different industries and jobs is that you get to learn how to deal with a variety of situations. This year I am glad for my past experiences because of the COVID-19 pandemic. It has led to such a change in our economy and the way that we do business that my past experiences have come in handy. Our company has shifted to doing some extra marketing tasks in-house. This meant that my knowledge of past shipping supplies and how to utilize them came in handy.
We ended up having to order all the products directly and put our own marketing together. This was a task that needed some past warehouse knowledge in order to get down what we needed. Working and managing a warehouse led me to understand how manual processes and ordering of products in bulk can be the difference between success and failure. The reason I knew this was because I had taken a warehouse department at an auto dealership more efficient one summer while I was going to college. It was a great job for the summer and it was my goal to do such a good job that they would hire me back summer after summer.
I learned that understanding that the way a job was done could be money saving. This was done by watching different people do the same job. I learned that some people did things because they were told to do them and some would do what they wanted. I asked people than to do the job differently than normal and I tracked the type of products they used, the location they did the work, and how much time it took them. I then found the most efficient way by seeing people with experience and those without expereince do that same job. From there I was able to track the tape, boxes, and labels that were used and how much of each product was used. This allowed me to figure out the most efficient way for tasks to be done. I then created systems after seeing what worked best and had the teams follow those systems. I walked them through how each step saved their time, and the store’s money and didn’t penalize them for doing more.
This whole lesson taught me how to take out the marketing department in-house and work on finding the best products and best way to put our projects together. Then I went shopping for the best shipping supplies stores and found the best deal for our company. It is not an easy task to then take what you know and justify it to a board of directors. So I had to price out local stores to see what they could give us. Then I went on Amazon to see what deals were available for our products and the time and cost of shipping involved. When I went to major online retailers I was able to get the best deals and costs and justify it to the board with proof. I hope these tips help your company thrive through the pandemic as well.
Knowing how to stay competitive in a market that is completely focused on eCommerce in the United States in 2020 is hard. With the COVID-19 Pandemic, every company is fighting to stay ahead of everyone else and is using all its capabilities to do so. It can be very hard to stay ahead of everyone and stay successful without closing down. I think that there are lots of things you can do to stay ahead of the competition. Some of them won’t cost you money to get either. IT can be as simple as taking some of your time to overcome the hardships and costs that your current practices may be costing you. So if you run an eCommerce company and are constantly purchasing shipping supplies this may be the read for you.
I think that knowing everything that is going on in your business is important to be successful. I don’t mean being a micromanager or an overseer of everything. But knowing what systems are in place and what is being done in each area is important. The systems you have in place can be the difference between being successful and closing down. But putting those systems in place is really complicated. So I want to talk about one system our company decided to improve and show where that went in the long scheme of things and how it ended up saving us money.
The shipping department in my company turned into the most important part of our business when COVID-19 hit. We were no longer able to use our storefront and get walk-in customers. This meant that all of our products that were sold came from online. Our shipping department was now responsible for getting our products safely to our customers without getting damaged. I have to admit that this was something that we did maybe once a week but most of our orders came from inside the store. This all changed and we had to find ways to make our costs go down.
We looked at all aspects of shipping and found that corrugated boxes were going to be the way we were able to ship out items out. We started to count every box and every single bit of tape that we used to seal them up. We researched labels and every aspect of the costs involved in getting our products out the door. So we watched multiple shifts accomplish the same job and without a doubt, we saw a lot of tape being used. This was because these groups had seen our boxes open up without 3 strips on the top and bottom before. This was 6 strips of tape per box and that seemed like a lot.
It turns out that we wanted to check and make sure we were doing the right thing. We didn’t really know where to turn, but someone suggests we call a shipping supplies store and ask about what we were doing and to see if they had suggestions of ways to cut down on cost. What I found out was that we were using a tape that was not rated for the weight of the boxes. They gave us a tape that could do it in a single strip and it ended up saving us 30% in costs between the difference. So I hope this small tip helps your company as well.
Our company has had to make that 2020 pivot. If you don’t know what I am talking about let me tell you a little about 2020. This year we had the COVID-19 Pandemic and our entire economy went nuts. The majority of states went on a house arrest lockdown and shut down all non-essential workers from working. Yes, it sounds a lot like communism just happened and well it did. But this is more about how our company survived the freedom sucking economy collapsing event. We decided to use our own ingenuity and purchased a bunch of packaging supplies and took all of our own marketing in house. We decided to instead of pay thousands of dollars for a marketing company to do work that we know cost about half that we would instead do it in house.
Our first task was to go through all the numbers. We had to track all the purchases and sales that were made from previous marketing and find out what was actually making us the most money because we have to be fragile and fast in this market. Our goal was to hunt marketing out like a panther and that is what we did. We researched hard on what was landing us our money and pounced on it. It turns out that our packaging supplies idea was right and that direct mail was the answer.
our most popular and money-making marketing item was a direct mail campaign. There was no point in spending money on anything but this and well emails. It is easy to follow up on the direct mailers with emails in order to give the 1 two punch to make our marketing work. So with this in mind, we had to find a way to make our company capable of doing direct mailers. Most of us are technologically savy so we figured we could write out our letters and then put them into a nice looking format.
Formatting turned out to be a hard part because of looks matter. We wanted to make sure these looked professional because even if we did them cheap if they look cheap they won’t work. Perception really is a reality so we decided to step up our game. We used color copies for our letters and had the look of it to be very professional and branded. Then we had to go ahead and buy a bunch of good looking letters. Buying letters, paper, and inc for this project was part of the expense.
We tracked every single cost, from letters, labels, stamps, and paper. Then we put on a special sauce wax seal to finish off the letters. By the time we finished, we found out that the cost of each one was about 1 dollar when done in mass production. We had to call up big companies and order all of our items in bulk in order to cut down on costs. Going to Amazon was not going to work for costs if we are going to make money doing this. So the next part was to get our team together to make these happen.
We ended up taking shifts each week and spending a three-hour shift to accomplish all the letters we would need for the week. Everyone pitched in, even our CEO and we all have had a good time doing this on our own.