According to the U.S. Census Bureau, 90 percent of businesses in this country have 20 or fewer employees. That means the vast majority of companies do a lot with very little manpower. Expecting so few people to do so many different things might be a factor in another interesting stat–small business survival rate. About 50 percent of small businesses never make it beyond year five, according to the U.S. Bureau of Labor Statistics.
Of course, a lot of factors play into business failures, but in observing small businesses in my work, I’ve become convinced that DIY’ing is part of the problem. Especially when it comes to your shipping and handling.
As a culture, we celebrate the “do-it-yourselfers.” We marvel at how they transform wooden crates into upscale bookcases on home improvement shows; we buy their books and magazines in hopes of duplicating their projects.
But DIY-ing can actually do harm to a small business, especially a business that is growing. Handling your company’s shipping and handling can distract you from important tasks like sales and marketing. Many an entrepreneur who insists on doing everything herself has given up–either from burnout or because things like product quality or customer service started to suffer as the business grew.
Using a third-party fulfillment professional to take care of your shipping and handling allows you to focus on your game. The best business leaders are like NBA basketball players. Those stars don’t worry about buying basketballs, washing uniforms or flying the team plane. Instead, they focus on their game.
Calculate how much handling your own fulfillment is actually costing you. If you are in a quandary about letting go of this part of your business, sit down and do some math.
Start by calculating how much your time is worth, per hour. Then add up how much time you spend per day on shipping-related tasks.
Tasks could include ordering boxes and shipping supplies, making boxes, packing boxes, negotiating rates with carriers, preparing shipping forms, delivering packages to shippers or the post office, fielding phone calls/emails from customers about shipments, processing returns. If other staff assist with these tasks, calculate their time and multiply it by their hourly rate as well.
Here are some other stats to include in this document: What percentage of your shipments are returned? What percentage are damaged? How much do you pay for shipping supplies? What do you pay for shipping?
Look at the big picture; it might show that contracting a third-party fulfillment partner makes financial sense. After you pull all these numbers together, give me a call. We can study what you’ve found and see if it makes sense for you to turn fulfillment tasks over to a third party. Every company is different, but I will tell you most of our clients have seen impressive growth–as much as 400 percent in one case–when they decide to turn over fulfillment to a professional third party.
The time you spend buying boxes at the big box store or schlepping your shipments to the post office is better spent taking your business to the next level.
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