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How to Factor in Shipping Costs for Your Business Expansion

Posted: July 19, 2022 at 2:44 pm   /   by   /   comments (0)

Expanding your business will take a lot of planning. If you’re expanding your current space, you have renovation mess and rearranging to do. If you’re opening up a new facility or branch, you have leases, purchases, and staffing to consider. Managing the known challenges will make space for the unknowns that need addressed.

Source: Pexels

Timing and Logistics

As you expand, carefully consider the timing of your growth. For example, if you plan to open another storefront, your launch may be more successful if you can plan to be part of another celebration to draw in guests. Check out the amenities of the city you’re expanding to. Do they have a weekend farmers market near your location?

Consider hanging flyers or setting up a small table sharing appropriate wares to give potential clients a taste of your products. One small shipment can tell your new community a lot about your offerings.

If you’re a small manufacturing firm starting up in a new space, you may already be working with an employment agency for skilled workers. Put up signs at senior gathering spaces for older workers to help you fill part-time positions.

Manage Your Inventory Wisely

Your new facility will need stock and/or raw goods. To avoid having to pay to move these products from your existing business to your new facility, work with your suppliers to split shipments to your new facility. While this may bump up shipping costs including pallet delivery cost, especially if you need to truck things in, it will reduce your need to haul things from your existing business to the new one.

As possible, try to max your shipping product weight so you don’t have to bump up your shipping insurance costs. This may take some detailed calculations, especially if you’re shipping products on pallets. Try to stay 25 pounds under your next insurance break.

Build In Storage Spaces

Do the work to set up storage spaces in your new facility. If you move into a blank slate, look for dead walls and cubbies where you can stash storage and shelving. While this can lead to a larger investment in inventory for now, it will save you shipping costs over the long term.

Your new space and new employees will have a steep learning curve. Making sure that your stock is stable and readily available, especially with supply-chain challenges facing today’s businesses, will make it much easier on your employees as they settle into your new space.

These temporary storage pieces should be easy to break down and easy to move. Your employees will be much more engaged and ready to offer you their best ideas with this flexibility. Having a stable stock in-house will lower general anxiety and pay for itself in loyalty and employee buy-in.

Reduce Time

Depending on the location of your new facility, carefully review the difference between drive time and car shipping costs. For example, if your business needs to do daily deliveries and you have a dedicated and labeled van for that purpose, it may be tempting to fill it up and drive it to the new space.

However, the time and liability risk of sending your employees off in your van loaded down with your inventory and tools may not be worth the risk. Shipping your vehicle and letting your suppliers deliver your new product to your new business could be much cheaper and much less risky.

Other factors to consider when driving your vehicles for relocation include

  • Maintenance costs
  • Fuel consumption
  • Added mileage
  • Housing and per diem for drivers over longer distances

Reduce Weight

As you can, buy the basics locally. Once you have a trusted manager at your new facility, make sure they have access to the buying power necessary to stock up your new space with the necessaries. It’s simply not worth the shipping dollars to transport items you can easily buy at your new location.

If you can make arrangements with your national suppliers to deliver fresh supplies to your new space, do so. Your new manager will need the ability to set up such accounts locally and a business credit card to make necessary purchases.

The ability to quickly stock up in your new facility can be managed by notifying your suppliers. To move your existing tools, stock and vehicles to the new space, a shipping service will save time and dollars. Buy on the ground in your new space to lighten your shipping load.

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