How small businesses can fight the supply and shipping squeeze

Since the pandemic’s arrival, global supply chains have been under immense pressure. As manufacturers and shipping ports throughout the world’s largest trade networks navigate shifting COVID-19 restrictions, the way small businesses source, sell and distribute goods has been interrupted. It’s a problem that’s expected to continue well into 2022.

These disruptions just so happen to have coincided with an ecommerce boom, with many customers turning to online shopping during lockdowns. Small businesses are feeling the effects. Long wait times to fulfil orders are causing logistical headaches and in some cases, customer upset. What’s more, some businesses are facing shortages of staff.

Despite these challenges, ecommerce has been a lifeline for many small businesses during shifting lockdowns. Moreover, it’s an industry that’s showing no signs of slowing down.

So what does this mean for you as a small business owner? Are there ways to minimise supply and distribution disruption? Xero spoke to an industry expert to help answer these burning questions: James Chin Moody, the founder and CEO of Sendle. Since 2014, the company has been providing small businesses with simple, affordable and reliable shipping that’s good for the planet (they’re Australia’s first carbon-neutral parcel delivery service). With delivery networks all over the world, James knows a thing or two about managing peak ecommerce periods.

Tell us, how can small businesses benefit from the ecommerce boom?

Since the arrival of COVID-19, two distinct trends have emerged: the way people shop has changed for good, and as a direct result, more small businesses are selling online than ever before. Of course, with so many people having experienced lockdowns, we’ve got used to the ease and convenience of ordering online (despite the reality of shipping delays). Many of us aren’t looking back. For small businesses, this opens up a world of opportunities to generate sales and revenue through ecommerce, not just in Australia but internationally. What’s more, parcel delivery services are becoming increasingly intuitive, making it easier than ever to enter new markets with simple and affordable shipping options.

How can small businesses minimise delays and prepare for the biggest ecommerce quarter?

As we come into peak shipping season, the more small businesses can do to holiday-proof their operation, the better. So, my first tip is a simple one: get prepared for the Christmas rush as soon as you can. Be sure to tell your customers to start holiday shopping early, and set their expectations by communicating your cut-off dates for when last orders can be delivered in time for 25 December. With plenty of pre-warning, your customers will avoid disappointment.

Why is it important to diversify supply and distribution channels?

With global shipping facing all kinds of pressures, small businesses need to stay resilient by diversifying how they fulfill orders and, of course, get them to their customers. My advice is to look to local manufacturers and service providers, and lean on those with a latge network of delivery partners so you have options to fall back on if one or more links in the chain are disrupted. For example, you might use one postal service for all regional orders and another provider for international parcels to ensure reliable, simple and affordable delivery.

How can small businesses compete with retail giants when they’re offering options like same-day delivery and free returns?

Shipping is a competitive market, but small businesses often have an edge that ecommerce giants can’t compete with: personalisation. My advice is to find what differentiates your brand from the rest and use it to your advantage. For example, if you sell organic goods, consider using compostable packaging and a carbon neutral delivery service. If your customers are loyal to your brand for its environmental focus, they’re likely to appreciate this. Remember, reliable and thoughtful service is more important than offering sophisticated shipping choices.

Our friends at Shopify explain some of the ecommerce fundamentals that every small business owner can learn to master, such as winning customers, converting sales, increasing basket size, and the role that reliable distribution plays across each of these touch points. Simple tactics like free shipping for orders over a certain amount can counter delivery costs and make a big difference in the conversion process. So it’s worth doing some research into tried and trusted strategies, and how to embed them into your business’ online shopping experience.

Although the Christmas period can be busy for those who sell online, it’s a really exciting time too. With the right strategies and a bit of planning, small businesses can minimise the impact of supply and shipping disruption for a strong finish to 2021.