8 ways to uncover hidden money in your business
Increasing the “top line” of your business is always critical, especially for small businesses that might still be struggling to reach that magical break even point. But even if you’re making a nice profit, cutting expenses or finding ways to save money should be a monthly exercise.
Some of the tips below are specific to online business; some are more general. Hopefully, they will get you thinking about ways you can cut some of your costs.
#1: Free boxes from the USPS. If you’re not aware of the free boxes for Priority Mail from the post office, you should be! They’ve been around for awhile. My business can’t use the flat rate boxes for technical reasons. Namely, we print postage labels prior to packing the box. Because our product line is diverse and we don’t have the technical prowess to determine whether a customer’s order will fit into one of those boxes, we can’t use them. However, the USPS offers a wide array of Priority Mail boxes that are NOT flat rate. We keep a generous supply of three different sizes that work for 90% of our orders. Consider that $0.30 – $0.50 saved per order. UPS and FedEx also provide free boxes and envelopes for their expedited services.
#2: UPS & FedEx Guarantees. We don’t use FedEx, so I can’t be sure if this tip applies to them. However, UPS offers money back guarantees on all of their time definite shipments. This includes UPS Ground. While they say it’s 5 business days, that’s not entirely accurate. UPS actually makes guarantees for UPS Ground from 1 to 5 days. For example, a package from St. Louis to Chicago is guaranteed to arrive within 1 day. So, you can use this to your advantage in two ways: If a customer orders overnight delivery and UPS Ground guarantees it for one day, use UPS Ground and pocket the difference. We don’t actually do this, but I know a number of ecommerce sites that do. However, we check to see if UPS missed the stated guarantee and we ask for a refund. This is all done automatically using UPS’s developer APIs. When we receive a rate quote, we also query UPS’s Time in Transit API. This provides us with the stated guaranteed. We then use the Tracking API to determine when the package was delivered. If there’s a discrepancy, we follow up with UPS and demand a refund.
#3: Address correction. UPS loves “assessorial” charges. If an address is slightly incorrect, UPS will tack on a few bucks to “correct” the address. Use UPS’s Street Level Address Validation API to determine addresses that might need to be tweaked in order to avoid this fee.
#4 Free Shipping Labels. UPS provides a variety of free shipping labels for thermal and laser printers. Use them. For everything you can imagine – even labeling boxes in your warehouse.
#5: Cash back credit cards. We have an American Express Plum card. When we signed up, it earned 2% cash back provided you pay your full balance within 10 days of the statement closing date. This discount is automatically applied to your next statement. I think they’ve since lowered it to 1.5%. Regardless, that’s a huge savings. We pay absolutely everything we can using this card. This really adds up over the course of a year.
#6: Cut out all PPC campaigns that aren’t working. If you have a PPC campaign with over 200 clicks and it’s not making money, stop it. Shut off that money faucet! If you want to try different ad text or a different landing page, go for it. But pause the campaign until you’re ready to implement those changes. Also, if you’re thinking the sale is worth it for the “lifetime value” of the customer, you’re crazy. As a wise man once said, “If it don’t make dollars, it don’t make cents.”
#7: Hosting fees. Are you paying monthly? If so, contact your host and ask for a discount for paying for the entire year in advance. Are you being charged anything for bandwidth? If so, offload your images to Amazon’s S3 cloud storage. Your website will load faster and you’ll save money. That’s a double win.
#8: Waste management. Do you pay for the garbage collection at your business? If you do and haven’t renegotiated your rates this year, do it right now. These companies love to raise your rates 5-8% (or more!) per year and hope you don’t notice. If you simply call and ask for a better rate, you’ll probably get it. If not, call a competitor for a lower price. This is probably the only utility you can negotiate.