[Lightning2000]

Hi All,
After reading a different thread, I thought it made sense to create a single thread on this forum concerning cost cutting measures everyone could consider to protect their bottom line. From box purchases to credit card fees, these are some of the things we need to discuss at length that will help offset all of the increases being passed along to us by different venues.

So, put your collective brainpower to good use and discuss ways we can all save some hard-earned coin by doing things better and hopefully smarter!

[divesports]

My biggest issue is the free shipping threshold. We currently have it set at $50 to compete with others in our industry. This is becoming a killer. On some orders, UPS Ground or USPS Priority Mail is as much as 15% of the order! I would like to raise the threshold, but I fear that others will not follow. I know free shipping is a pretty big closer in online shopping sites and I certainly don't want to do anything that will change my close rate. Any ideas?

Phil Ellis
www.divesports.com

[jgreco5]

Phil,
When we raised our threshold, so did everyone else. Seemed like everyone else had the same fears we did. Most likely they have the same margins and issues that you are.

Why not try it out and if it has a detriment to sales, switch it back?

Some tips I have:
We raised every item from ending to .95 to .99 cents. This extra 4 cents has added up to several hundred dollars a week and our customers never even noticed it.

Add cheap add-on impulse items. When someone is having something shipped, there is a percieved value for the quantity of stuff put in the box. We had cool stickers, keychains and T-shirts created for our industry. We pay around $1 for some of these items and can sell for $3-$4. This is better margin than ANYTHING else we sell! LOL

Join the Plastic Loose Fill Council. For an annual fee you will be listed as a drop off center for shipping peanuts, etc. We have more than recouped our investment in free peanuts and it is good for the environment too.

I love Free USPS boxes!

For the odd sizes / Call Uline and negotiate cheaper or free shipping. We did and we now get free shipping on orders over $250. A HUGE savings for us!

We try to buy toner and stuff at OFfice Depot or Staples using coupon codes found on Couponmountain.com and couponcabin.com.

Join ABN.com for savings on all kinds of stuff from business cards, imprinted items, etc.

Use a card with a rewards program. Chase rewards give us points. Since we spend hundreds of thousands a month, we redeem our rewards for gift cards. We send them to good customers, employee incentives and we did furnish our house from Pottery Barn..LOL

We were spending thousands of dollars a month on advertising. We took most of that money and instead used it to give out free product. (However, we are lucky we have a niche market) with a lot of people visiting forums and trade events. This has created a lot of buzz for us. If you put the effort into the customers over advertising, it will come back tenfold.

Hope something here helps! I would LOVE to see your ideas

[shupack]

AUTOMATE!

If a person has to do the same thing repetitively, have a computer do it for "free" (you've bought the computer already, or even let someone elses computer do it..).

In my eyes saving time (effectively) is saving money. I'm a one man band so I "bill" my time to my company at $100/hour. I also have a day-job at one of the most in-efficent industries I've seen since the military. There are 600 employees in my location, 300 could do the work if everyone worked 10% smarter. Cutting jobs isn't exactly great for the economy, but it would be bueatiful on our bottom line.

I just changed my CC processing to paypal (which required auth/capture at sale) so that I can use my PP debit card for payments, which has a 1% cash back. this (and another thread about PP rates) dropped my Paypal rates from 2.9% to 1.5% (effectively) and eliminated 3-7 days of cash-flow delays. Instead of waiting for auth.net to post to my bank account, then send checks, (and waiting for them to clear) and paying a monthly billpay fee from my bank, I get the cash-back from paypal and most of my vendors give me a prompt payment discount.

I think I found 5 hours a week extra time to spend with my family just from that.

QB web-connector, I just set it and let it go. from 10 minutes to none for getting orders into QB.

Make full use of the KB to answer any question that has come up twice, direct customers to the KB in an auto responder to help eliminate repetitive emails.

don't accept personal checks through the mail, if someone is shopping online without PP or a CC they are likely going to be a time consuming customer. plus, do you really want to go to the bank to deposit a check when you can spend another 1/2 hour with your kids?

for allot more time saving ideas (plus the best "inspiration" I've ever found in a book) read "the four hour work week", I just finished reading it for the 3rd time....I recommend that book so much maybe I should start selling it...

I re-cycle shipping boxes and use the free USPS and UPS boxes too. I have a few odd size boxes I need and I buy them in bulk from uline once a quarter.

I'm still working out of my basement, I'm almost to the point I can leave my day-job if I wasn't in debt so I'm selling my house and moving in with my inlaws (I actually like them....). Getting rid of a $2000/month bill is a HUGHE penny saver (plus the cable, heating, electric bills etc..). I should be debt free by August and day-job free by December.

[bvega]

-Work with suppliers to have a 2% 10 Net 30 payment terms structure or something similar.

It saves tons of dough and you make more by paying early than by having the cash sit in the bank.

-Use a rewards credit card for paying vendors. We have a few amex cards that give us a once a year cash rebate that equetes to about 1-1.5% of our yearly purchases.

-Negotiate a better rate with UPS/FedEx/DHL etc. Trade associations are really helpful because many times the shipment carriers will offer a trade group rate with no minimum volume and no fees.

-Re-use packing material and recycle your newspapers for extra material. We have never purchased any peanuts or paper and customers like getting newspaper packing because they think we are environmentally conscious.

-join staples rewards program. We get $25 off coupons all the time. Sometimes it is $25 for an order over $50. That is 50% off.

Dont read the "online or by phone only" crap printed on the card offers from Staples. The staples store will take ANY discount offer mailed to you from Staples. you dont have to use the online and phone offers only at those channels.

-use CFL lights. They last REALLY long and they use 19W to generate 90W of light.

-Costco is great for stuff.

-Definitly use the UPS/FedEx boxes for air shipments. They save money on dimensional weight, are free, and cut down on packing material.

-Re-Analyze your shipping box sizes and common shipment sizes. We recently purchased some bigger boxes for common part order combinations. We took the time to check the dimensions in UPS worldship to see if it would trigger UPS ground oversize dimensional weight. This saves us about $15 an order. The box only cost a $1 more and the parts are better protected when shipped together.

- Dont order out for lunch. Stay at work and heat up a frozen food dinner or a canned soup. A marie callendars dinner is $2.00 at Food 4 Less and a canned food is great -- we get them from Costco and just pop them in the microwave. We save time and money.

-If you do have to order out, then join dominos.com. Two weeks ago they had a free large pizza deal with no other purchase required. You can order online, track your pizza being made, and enter in coupon codes to save money. Also, they will deliver it to your door so you can stay and keep selling on those phones.

-Skip the morning starbucks and save lots of bucks.

-buy the generic toner cartridges from places like ldprdoucts.com or abcink.com.

-unplug any wall transformers that are not charging something. These suck juice even when nothing is hooked up to them.

-Use space heaters in the offices and turn off the heating to warehouse (were in California so we can get away with this. This may not be appropriate everywhere).

-vista print for cheap give away company cards. We have a color card with all of our generic company contact info and brand logos. It is stapled to every invoice.

-In California we use AT&T, formerly SBC. They have unlimited local and nationwide long distance for $60 per line. We do a lot of phone sales and make a lot of phone calls too. This flat rate phone plan is much cheaper than the cents/minute rate.

There is also combined billing discounts if you use your DSL and company cell phones through AT&T as well. We get an additional 20% off the entire bill from that.

-If you use FedEx, then pay your bill with your AMEX rewards card. All FedEx shipments receive an additional 5% off when paid with AMEX in addition to your negotiated rate discounts if you have any. The 5% discount is refunded to your card instantly when the charge appears. As stated above you will also get an AMEX rebate towards all of your purchases at the end of the year too so that is another 1-1.5% as well.

-This may sound contradictory but DO NOT overbuy inventory during your industry's offseason. The discounts would have to be pretty steep to make up for having the money in a good CD or money market accout or invested in something else for the business.

-Finally, I would highly encourage everyone to read a book that is highly regarded in the industrial technology world. It is a fictional novel that exemplifies and teaches you about a very practical approach to looking at any business or organization. It is not a textbook and it is an easy read.

It is called The Goal by Eliyahu M. Goldratt.

It discusses a business process in terms of manufacturing but also touches on sales strategies and the overall concept of an organization. It discusses efficiency vs. capacity. It discusses how to make more money while technically selling below cost. Read it and you will re-think the way you view run your business.

[TheFurnitureCove]

I'm just curious because you guys are going to some extreme lengths to save a few dollars....how much generally are you making from your stores? How many orders a month do you get?

[shupack]

almost enough to go full-time.

I'm going to try to sell my house and get rid of 95% of my personal debt, then it will be bringing in plenty to quit the day job and go full time.

[bvega]

I'm just curious because you guys are going to some extreme lengths to save a few dollars....how much generally are you making from your stores? How many orders a month do you get?

We do quite a few orders which is why we save a lot of money with what we do. I am not really sure what you mean but you have to look at the most substantive tips we use to see that it is setup well spent and most things do not distract from the daily operations to make them counterproductive.

-For instance, if you are shipping a small item via UPS air, then use the smallest UPS box you can. Its free, cuts down on dimensional weight, and is fast to construct and uses less packing material.

-Saving packing material is quick and easy. When you receive inventory from vendors, you have to dispose of it somehow. Well just put it into a packing material bag or box and set them up at each packing station for people to pick from.

-Negotiating 2% 10 Net 30 terms is a one time thing to set up.

-Paying vendors with an AMEX rewards card is faster than writing a check and mailing an envelope. You save money with the rewards rebate and get a free credit line when you pay off the card every month. We all know how expensive credit lines are.

-Having a Trade association negotiated shipping rate is a one time thing to join. Doesnt take any time to maintain.

-Presenting a Staples coupon card that you received in the mail when shopping online,on the phone, or in the store is quick. Why not take the junk mail lemon and turn it into lemonade.

-Eating lunch at work rather than having someone "make a food run" and spend money on crappy fast food is a no brainer. The microwave does all of the work, its cheap, and tastes better. Plus you can get a few tasks done before its ready to eat.

-Alot of our practices were one time setups for savings.

-Changing a light bulb takes the same amount of time no matter which bulb you install.

-Re-analyzing our boxes used for common orders took an hour and will save us money going forward.

-Really when you do a lot of volume the steps we take only save us more money because a lot the savings are percentage based so the real hard dollar amounts only get higher as our company and volumes grow.

[Laurel]

After reading comments about online packaging, I must say that we searched out a local supplier and found them to be cheaper, easier to deal with, and get next day delivery.
Another thought--everyone assumes you need boxes. We use bubble padded envelopes for all but the largest orders. They are lighter & cheaper (and sometimes stronger) than boxes, and generally qualify for better USPS rates.

Phone--we use Vonage for $30/month unlimited long distance. We instruct customers to email questions & then we call them. Cheaper than 800 service.

[bamclean]

First time post on here.

A new user here just switched DNS servers over the weekend as i didnt want to lose the season for some of the product lines.

Trade association rates for Fedex can be substantial, the discount our trade association gets is in excess of 25% for Fedex ground and home. Nothing to sneeze at for sure!

Our association also has negotiated discounted merchant rates. Savings from these two items pay for the association membership many times over.

Bruce

www.npadist.com