Working around shipping costs
Customers don’t like to pay for shipping, and several studies have even indicated that shipping expenses and the delay between ordering a product and receiving it are the two top reasons why some people would rather shop at a brick-and-mortar store. Yet at the same time, shipping is a necessary cost for online merchants. They need to strike the balance between offering attractive shipping prices to customers and maintaining a sustainable business.
Retailers need to be more cognizant of how they deal with shipping. In the past, there was little thought given to shipping but merchants have more control over transportation expenses.
Whether they’re using eCommerce software to streamline shipping or negotiating better rates with carriers on their own, they have a number of options to help them achieve that balance between customer satisfaction and financial sustainability.
1. Realize that you, the merchant, have the power
There are a number of different carriers, from FedEx to UPS. Retailers must realize that they have the power in terms of negotiating with these different companies directly for less than standard market costs. They can discuss rates and use different services from the various providers depending on the volume of orders, the weight, the time frame of delivery required and several other factors.
“As an example, for physically small but heavy items, flat rate shipping from the U.S. Postal Service can produce significant cost savings over UPS and FedEx,” Practical eCommerce explained. “But for many mid-sized packages — relatively speaking — UPS and FedEx offer better rates than the USPS. So taking just a moment to compare rates before sending a package can make a difference to your business’s bottom line.”
2. Consider using shipping software
Many retailers use shipping software, such as ShipWorks, ShipStation and iabol, to manage all of their shipping needs. The benefit from this is that although there is usually a software license fee involved, these software options can secure cheaper rates, and in many cases, can integrate seamlessly with many eCommerce software solutions.
3. Look for money-back opportunities
Several business credit cards offer reward programs with money-back components. Although using these cards to pay shipping costs won’t reduce upfront expenses, the money-back rewards can be collected to defray shipping costs later on down the line. Using this money to reduce shipping costs is one way retailers can minimize expenses.
Another option is to use a service like 71lbs. They have software that helps you collect refunds through audits of the major carriers to identify late shipments.
4. Consider other options to shipping
Many retailers are considering other options to shipping as well. For example, some retailers with brick-and-mortar presence are offering in-store pickup and/or ship-from-store. This is more convenient for customers as they don’t have to wait to receive their goods and also reduces shipping costs for merchants. However, a successful ship-from-store or in-store pickup system requires integrated eCommerce software that can consolidate the order management function.