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Uncovering Profits While Facing Inflation

Supply chain disruptions have caused many businesses to lose profits over the past few years. Businesses have been forced to look for alternative methods to increase their profits. The very minimum expectation for survival is to reduce overhead costs. This could mean moving out of state to reduce overhead, finding alternative suppliers, or reducing labor costs. Another way to lower overhead is to reduce shipping costs. 

Businesses often lose a lot of money on shipping due to miscalculations, accessorial fees, and paying more than they need to. Businesses can renegotiate their terms anytime they don’t have to wait until their contracts expire.

In addition to expensive shipping, they may also lose money due to breakage, misplaced goods, theft, or miscalculations. A logistics consultant can help to resolve most of these problems.

Logistics consultants bring experience from many different industries and understand what worked for businesses like yours. They can look through your invoices to uncover excessive fees that you paid to see if you are owed money from FedEx or UPS. They can also review reports to evaluate product performance at a very granular level to see where losses occur.

At a time when things are becoming more difficult for businesses due to rising labor costs, fuel costs, material costs, and overhead, to stay competitive you really need to uncover areas of your business where eliminating waste can uncover more profits for your business.

  1. You can save money lost due to theft by installing video cameras in your facility, at the very minimum near entrances and exits.
  2. Speak to your staff to better understand what is happening on the production floor. They may be able to provide you with insights about circumstances that create bottlenecks, issues with equipment, and even problems with staff.
  3. If you have ERP software, you can provide a depth analysis of your inventory detailing product performance at every stage of production. You will be able to gain insight into problems that could be remedied at each workflow stage.
  4. You may even want to consider using a third party to perform production for a product or test something new with a drop shipper. Drop shippers can save you money in shipping due to the large volume of products they ship.

When your business faces challenges, you must be open to creative solutions. Cutting staff may seem to be the most logical solution for many; however, it will result in lower production and then when demand increases, you’ll find yourself challenged to fulfill that demand.

Now that shipping ports are closed, it is becoming more difficult to get things delivered. You need to plan for the holiday season. If you’ve been in business for a few years, you should know that the main carriers often slow down around this time while increasing their prices. 

You may need to alter your policies so that your customers know what to expect. If they know what to expect, they won’t be upset if their product takes longer to be delivered. The key is good communication

Now that the economy is spiraling downwards, businesses need to find a way to be competitive by trimming waste so they can avoid raising prices. Consumers are becoming less concerned with sticking to the same brands. Instead, they are looking for bargains. To keep customers loyal, you want to keep them happy. 

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