My Dining Room, My Loading Dock: How home shipping operations get it done
by Erin McDermott.
What happens when 19th century fashion meets 21st century technology?
Just ask Jim Berry. His monocle business—NearSights.com, a San Francisco home-based business started by his father—saw sales of its dandyish spectacles surge early this year. But what was driving it— the sudden popularity of “Downton Abbey,” a burgeoning trend among fashionistas here and in the U.K., or changes in the website or marketing? One thing was certain: Orders were taking anywhere from 90 minutes to two hours for Berry to complete every night, a task he describes as a “huge pain” for someone with a full-time day job.
“Ultimately, I decided it was something I didn’t have time to do anymore,” he says. He set out to find an order-fulfillment provider with an activity-based pricing model, which would only charge for the services performed and also provide a more cost-effective—and time-saving—shipping system.
Census data show more than 15 million home-based businesses are operating in the United States, with 2 million more starting every year, according to a 2011 survey by market researcher IDC. E-commerce has shifted merchants from Main Street to Your Street, bringing with them a flotilla of scales, envelopes, invoices, tape dispensers, and boxes.
How are these home-based businesses managing their shipping? Here is some advice from a few small-business veterans on what works, what to watch, and when to get help.
Think like a customer
Colleen Lloyd-Roberts has run shipping for her crystal nail file business, Top Notch Nail Files, from everywhere—a kitchen, a garage, and now a large room in her home near Charlotte, N.C. The one constant: keeping an eye on prices. “I really try to keep the costs down,” says Lloyd-Roberts, who says she’s able to ship for less than $5. “Customers cost compare, so I need to offer competitive pricing and competitive shipping. When you do a lot of these online shipping services, you’re stuck with a one-rate deal and you have to charge $5.95, $6.95 or whatever. I just don’t want to make money that way off my customers.” To keep prices down, many home-business operators also take advantage of free shipping supplies from the U.S. Postal Service, UPS, and FedEx.
Mind your infrastructure
How secure is your setup? Lloyd-Roberts recalls resorting to a patchwork of tarps to fend off critters that made their way into one garage workspace. Inventory is the lifeblood to any small business, and equally important is your ability to get shipments out the door. Invest in a large outdoor courier box to house returns or big deliveries and keep them safe and out of the elements.
The breaking point for Mike Schwarz, owner of RibbedTee.com, came when his Los Angeles undershirt business started to take over his family’s home during a rapid period of growth. He had a large amount of inventory in his garage for immediate turnaround, which required him to hire a few staffers as the operation outgrew the residential space’s intended us. With eyes on further growth, Schwarz migrated out of the close quarters and into a commercial facility.
Keep it simple. Nathaniel Disston, the founder of Voy Voy, an online men’s clothing brand that specializes in polo and T-shirts, aims for simplicity when his spring and summer busy season hits. His shipping operation runs out of his parents’ Florida home, where everyone follows a set plan, shipments are handled in batches once a day, and rules for packaging are laid out explicitly. A highly detailed sizing system on the website, spelling out how much a garment might shrink and a thorough explanation of what “large” really means, has nearly eliminated returns, Disston says. It’s a system that he says saves the company 50 percent on shipping costs because not having to deal with a large stream of time-consuming returned merchandise keeps the amount of work required at a manageable level for an in-house business.
Look at your technology
What can be automated? Most at-home shipping departments now rely on some form of software that links up label printers, postal meters, and invoice generators. Christopher Baker, president of Incubators.org, which sells machines to keep poultry and reptile eggs warm, started out doing everything by hand in his Crittenden, Ky., garage. He switched to a suite of software from DiscountWebDesigner.com to better track his inventories, and now links everything to his site’s shopping cart. “When the shipping process is taking up 10 percent of your time, you need to look to automate,” Baker says. “You need to be out generating more sales and you’re likely neglecting more important duties.”
Don’t expect things to get less complicated though, says Fred Lizza, chief executive of Dydacomp, maker of order-management and shopping-cart software solutions for small to mid-size businesses. Mobile e-commerce is ramping up and an embarrassingly bad review by a customer can be just one botched order away—so you better get your tech side up to speed. “The Internet is an accelerator either for you or against you,” Lizza says. “If you are selling through multiple channels, such as your website and through Amazon, your shopping cart can’t do it all. Don’t create more work by having a separate process for every channel—flow all those orders into the same back-office process.”