October 20, 2014

10 Challenges of Managing a Shipping Department

managing a shipping department

If your new business involves shipping and fulfillment, you could be in for some surprising challenges. Many people don’t consider factors like international orders — and sheer man hours needed for packaging and inventory — when starting out.

That’s why we asked 10 members of the Young Entrepreneur Council (YEC) the following question:

“I am launching a new startup and shipping to customers is a huge component. What are some important challenges to be aware of if I am only just learning how to manage a shipping department?”

Here’s what YEC community members had to say:

1. International Orders and Returns

“The two most overlooked items when it comes to shipping are international orders and returns. International orders require higher costs, customs processing and can require additional certifications. Also, returns are a big part of the fulfillment process. Take time in the beginning to build your RMA process for returns and replacements.” ~ Andrew Thomas, SkyBell Technologies, Inc.

2. Logistics

“We follow a golden rule at our company: The more times an employee touches a product in our warehouse, the more our cost of doing business increases. Logistics is the backbone of any successful company; don’t short it on the budget. Ask employees what they need to be more efficient. You would be surprised with some of their ideas — we sure were! ~ Will Land, Accessory Export, LLC

3. Tracking Orders

“There’s nothing worse for customers than not being able to know where their orders are. This creates a negative opinion of your company and more support issues for your reps. The best thing to do is provide a page on your site where customers can easily look up the status of their order by email address or order number. This puts them at ease and lowers the burden on your support department.” ~ Dave Nevogt, Hubstaff.com

4. Rate Shopping

“It is crucial to have an automated system set up that automatically rate shops among the major carriers before shipping. This is vital to get the best rates and keep shipping rates low.” ~ Josh Weiss, Bluegala

5. Gauging Customer Happiness

“We set up an autoresponder that goes out 15 days after an order, asking customers how they like their purchase. Not only do customers love this followup and usually respond with a positive message, but it has also allowed us to discover shipments that didn’t arrive or had defective items. Making sure the customer is happy is always an important challenge, and this email helps.” ~ Brett Farmiloe, Digital Marketing Company

6. Your Company’s DNA

“If it’s not in your DNA, outsource fulfillment. We’ve used a third-party fulfillment center for a while. The cost is competitive, and the service is fantastic. Although we considered managing in-house, we decided to allocate more resources to our core competency, design and development.” ~ Aman Advani, Ministry of Supply

7. Prices

“If shipping is going to be a huge part of your business, then you definitely want to know what its true costs will be, which are more than what UPS, FedEx or USPS charge. You need to factor in returns, the time spent dealing with claims and shipping supplies. Find a way to be efficient because these expenses eat right into your profit.” ~ Henry Glucroft, Henry’s / Airdrop

8. Scale and Volume

“It’s all about scale and volume when shipping in large numbers, so don’t turn a blind eye to the management, analysis and innovation when it comes to keeping your costs down. Get your hands dirty with it in the beginning, and keep checking on it regularly so you don’t get hammered to death by just a few pennies at a time.” ~ Seth Talbott, CEO and Startup Advisor

9. Comfortability

“There are many shipping companies that will allow you to outsource your shipping. In fact, you can probably outsource your manufacturing, too! But, let’s not digress. Logistics companies such as Agility offer warehousing, forwarding and transportation for almost any product. If you’re asking this question, you probably aren’t comfortable with managing shipping. Let someone else do it.” ~ Andy Karuza, Brandbuddee

10. Customer Experience

“The shipping experience is a huge opportunity to improve your customers’ experience. As you’re building your shipping department, consider things such as delivery promises, what the packaging looks like, how delightful the overall experience is and how easy it is to make returns. Only considering the cheapest way to ship an item is shortsighted and can diminish your customers’ satisfaction.” ~ Katrina Lake, Stitch Fix

Shipping Photo via Shutterstock

1 Comment ▼

The Young Entrepreneur Council


The Young Entrepreneur Council The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

One Reaction

  1. As I am operating a gift company, one of the issues I have encountered with our shipping company is the fact that they cannot predict when a particular package can reach a certain destination. This has caused a lot of issues with our clients.

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