Starting a New Business: 4 Logistics Mistakes You Must Avoid
When starting a business it is very easy to make some terrible logistics mistakes. If you wish your business to grow, read on to learn how to avoid 4 most common logistics mistakes you might make.
In many forms of business, logistics are a big issue. Getting parcels from you to the customer, or even from a supplier to yourself, requires careful thought. Many new business owners are not aware of the complications and end up making some very common mistakes. Here are the problems to avoid before they arise.
1. Guessing at your costs
Making an estimate is never a good idea in business, even when you are put on the spot or asked to give a figure quickly. You may not be fully up to date with shipping prices in your area. There may also be extra requirements you have not thought of, like the weight or a speedy delivery, which will push the price up.
There are some delivery services which will allow you to get estimates of costs before you ship. Go to websites like PACK & SEND to use their estimate service and see how much it will cost to send any size of shipment anywhere. This will give you a quick and easy answer to add to your estimate, and it won’t be a guess. Don’t risk losing money because you have quoted the customer a far lower shipping cost than the order will actually require.
2. Misunderstanding taxes
Taxes vary from country to country, so if you are shipping internationally, this could be a huge problem. Import taxes apply when an item is sold and delivered to the new country. If you don’t pay the taxes on your side, then you customer will be asked to pay them when the item arrives.
This could cause severe embarrassment, especially if the tax is so high that the customer rejects the delivery. What you can do to avoid this is to do your research beforehand. Make sure that you know how much it will cost to ship an item, and not just in terms of getting it there. You can add these taxes onto the shipping bill so that customers don’t get a nasty surprise. Itemising it will help to explain to customers why the shipping cost is so high.
3. Forgetting to update prices
So, you’ve checked out the shipping costs, you’ve checked the taxes, and you’re good to go. But then a year passes, and your profits start to fall. What’s going on? It turns out that you have neglected to keep an eye on the shipping price, which may rise or fall as time goes by.
Make regular updates, checking the shipping prices against what you charge your customers. This will help to ensure that you are not losing money on each order, even in times of economic change. This is also important when estimating costs for the year ahead – don’t assume that things will just stay the same.
4. Choosing the wrong packaging
Packaging can make or break a delivery – literally. If the package is not sturdy enough or the item is not padded, it could arrive to your customer in a damaged state. If it is not marked as fragile, but it is, there is very little chance of it arriving in one piece.
On the other hand, if you spend too much on elaborate packaging, you could be short a pretty penny!
Don’t be caught out by logistics mistakes like these – not when it’s so easy to avoid them.