Will Price Increase By Delivery Firms Affect Small Businesses?

The past few years, delivery firms had price hikes that not only affect the weight of packages, but their size as well. What does this mean for your small business?

Plenty of small businesses, especially e-commerce companies, rely heavily on delivery firms to bring their products to their customers all over the globe. With the increase in prices, small business are affected in more ways than one.

The burden of the price hike

As mentioned, e-commerce businesses use the services of delivery firms to carry goods to their clients. Many of these businesses sell their products online because they are too small to have a physical store, or they don’t have the funds to cover the expense of having a physical store where customers can just walk in and buy products.

Because of the delivery firms’ price hike, the added expense on delivery costs may prove to be a burden to small business owners. This is especially true for more inexpensive products that cost almost the same as the shipping fee.

How it impacts the customers

In order to maintain their business profit margins, many small business owners are being forced to increase their delivery fees, much to the dismay of many customers. This is being done just so that can maintain their bottom line and keep the business functioning. Though some customers don’t mind paying extra just to get the product that they want delivered to their doorstep, a proportion of customers are likely to be put off due to the shipping costs. Larger online retailers are more likely to be able to absorb the increased cost of shipping within their business in a way that smaller businesses cannot.

In addition, there are some small business owners who entice their target market with free shipping. These business owners are the ones who will be majorly affected by the price increase, as they’ll be shouldering all the expenses for shipping. Eliminating free shipping for them may be detrimental to the business, as free shipping is as strong selling point that attracts many customers.

If these small companies continue to shoulder the shipping expenses with the increased prices, they may be looking at lower profit margins that could be the kiss of death to their businesses.

If customers see that shopping online may cost them more, they may look for alternatives, or just go to a physical store where they can get the same products – minus the expensive shipping fee.

What can businesses do

Despite the price increase of delivery firms, there are still some people who prefer to shop online and get their products delivered straight to their doorstep. With the convenience of online shopping, especially those with inbound package tracking, there are still some things businesses can do in order to keep their customers coming back for more.

Small businesses can find ways to cut down their costs on other areas of the business in order to keep their profit margin. You can turn to promotions that will entice your customers, or find cheaper shipping alternatives, such as access points where your customers can pick their items at a location near them, just so you can cut down on your shipping costs and at the same time, still profit from your business.

With the delivery price increase, you just have to find the balance between the money that is coming in and going out of your business in order for you to stay afloat and not be affected as much by these factors.

Comments

comments

Founder and chief editor of makemoneyinlife.com Blogger, Tech Geek, and SEO person. I started this blog because I've been making money online since 2005,and now want to help everyone else start their online business and make money online from home. You can contact me at makemoneyinlife@gmail.com or contact@makemoneyinlife.com

Site Footer

© Copyright 2011 - 2016 MakeMoneyInLife.com