7 Common Mistakes When Starting a Shipping Business

Starting a shipping business is an exciting endeavor filled with opportunities. But it can also have plenty of pitfalls. Knowing what to watch out for is what can set you up for success in the long run. In this article, we reveal 7 common mistakes when starting a shipping business. 

We’ll not only make you aware of possible mistakes, but also provide insights to help you navigate the landscape of your new venture. By learning these key lessons early on, you'll be better prepared for your journey toward building a successful and thriving shipping business.


7 Common Mistakes When Starting a Shipping Business

In this section, we'll explore 7 common mistakes when starting a shipping business. These insights can help you avoid costly errors and set your business on the path to success.


1. Starting With Unrealistic Expectations




Launching a shipping business is incredibly thrilling, but maintaining the right expectations is key. It's easy to get caught up in adrenaline-fueled hopes of overnight success. 

But remember, achieving sustainable growth takes time and effort. A shipping business, like all businesses, faces its own set of challenges, which can include navigating logistical mishaps or sorting out delivery delays. Success will come gradually with patience and hard work. 

Keep your expectations realistic to stay focused and motivated by your long-term vision. It’s the best way to avoid one of the most common mistakes when starting a shipping business. 


2. Spending A Lot on Business Setup 

You may think that putting in more money now will pay off later. However, overspending and going over budget on initial setup are common mistakes when starting a shipping business. 

Excessive costs can destroy your business before it even gets started, so you need a budget. If you’re an LLC, it's important to create an operating agreement as it outlines the financial and functional decisions of the business, including rules, roles, and provisions. In the end, balance is key for any business. Invest in what’s necessary, but always keep cost-effectiveness in mind.


3. Neglecting to Build Relationships With Your Clients

One of the common mistakes when starting a shipping business is failing to establish relationships with your clients. You may be tempted to focus solely on logistics and operations because those are your core tasks. However, customer satisfaction is vital for long-term success. 

Satisfied customers are more likely to come back, but they also have the power to promote your business through word-of-mouth referrals. They may also leave reviews and testimonials.

By keeping lines of communication open, understanding their needs, and ensuring their satisfaction consistently, you'll begin building loyal customer relationships that will lead to profit.


4. Relying Too Much on a Single Client

When starting your shipping business, you might find it's easier to rely heavily on one big client. 

While this can certainly give your business a significant boost in the beginning, having too much dependence on them isn't wise. If they decide to switch providers or shut down their operations, your business could be in jeopardy. A healthier approach would be to diversify your clients. 

Focusing on acquiring a mix of smaller clients along with medium and large ones can offer more stability and insulate you from abrupt financial downturns that could destroy your business.


5. Offering Multiple Shipping Fees




You may think that offering multiple shipping fees based on destination or package weight is a good business strategy. Why not charge more for greater distances? However, complicating your shipping and delivery fees are common mistakes when starting a shipping business. 

Unfortunately, this approach can sometimes overload your customers with varying shipping costs, leading to confusion. In contrast, a one-size-fits-all fee structure provides simplicity and clarity for your client base. You're likely to benefit from focusing more on providing a clear and consistent pricing structure rather than over-complicating things with multiple fluctuating fees.


6. Setting Very Short Delivery Times

On the road to standing out from your competitors, you might be tempted to promise very short delivery times. While this might sound appealing to your customers, it's a risky move if you can't consistently deliver on that promise. Fulfilling shipping orders quickly is important, but setting overly optimistic delivery times can lead to missed deadlines and dissatisfied customers. 

It's better to underpromise and overdeliver than the other way around. Be realistic with your delivery schedules. Trust and reliability are critical for building customer loyalty in the long run.


7. Competing Only Based on Price

In a bid to tempt more customers toward your business, you might consider offering lower prices than your competitors. While competitive pricing is an important part of any business strategy, relying solely on cost can undermine the value of your very important services. 

Cutting prices often leads to compromising on quality, whether it's customer service or delivery speed. Clients value more than just price. They're interested in the overall service experience as well. Instead of focusing solely on being the cheapest, aim to deliver superior value for money.


In Conclusion

Now that you're familiar with these common mistakes when starting a shipping business, you're well-prepared to navigate your journey. Awareness is the first step toward prevention. Use these insights as a roadmap to guide your decisions and to build a resilient and successful business. 

Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. 

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