We’ve all heard the phrase, “Don’t sweat the small stuff.” And in most instances, I would have to agree. But when it comes to running a business, failure to pay attention to the small stuff can have a huge impact on your bottom line.
Small stuff? What small stuff, you say. Here’s a list of a few of the little things that taught me big lessons and ways you can avoid them.
Confession 1: I Forgot to Include Packing Materials into My Pricing
What can you get for a box of packing peanuts? Not much, which is surprising since they run about $10 a cubic foot. And what about boxes? You’d think you could find empty boxes on the cheap, but I found myself paying over a $1 a piece or more. Then there is packing tape, labels, and the gas it took to take the boxes to Fed Ex. On average, every order I sent out cost me at least $2 in packing materials.
That doesn’t sound too bad. Two bucks, no sweat, right? Maybe not, if you are selling high end goods, but for me and my little gourmet food company, the average price of a box of cookies or gourmet baking kit ran about $7.50. That price was a one hundred percent markup over cost. So forgetting to include the costs of those packing materials ate a huge chunk of my profit! Thankfully, most of the orders that were filled were not just one item. However, in hindsight, I should have been smart enough to factor those costs into my pricing.
There are any number of solutions to this mistake, all of which include just being smart about how you do things. By the end I had figured a few out:
Buy shipping materials in bulk.
If you ship items regularly, buy things like boxes and packing pillows or peanuts in bulk. It might be a bit of an investment up front, but it will save you money in the long run.
Recycle if you can.
Reuse boxes from other purposes and save all the packing material that comes in shipments you receive. For me this was tough because I didn’t want to send a box that had another company’s logo or name on it. But, if I could cover that logo with a strategically placed shipping label, I absolutely used it.
Consider using the U.S. Postal Service.
This is another one that may or may not work for your business. Depending on the type of item you are shipping and to where, this might not be your best or most cost effective shipping method. But consider that priority mail boxes and flat rate boxes are free. My post office even gave me free priority packing tape. And flat rate boxes might just be my favorite invention of the century.
Add the cost into your price.
Perhaps the most obvious solution of course is to tack a bit on the price to cover your costs. I am not suggesting you do a mark up on the cost of your boxes and tape, but adding them into your pricing keeps it from minimizing your bottom line. By the time I closed, I was charging a fee for orders under $20 to cover my costs.