For a small- or medium-sized e-retailer, shipping costs play a large role in overall profitability. A shipping increase, such as the GRI increase of about 5% just announced by UPS for next year, can have an impact on a small organization’s bottom line. Businesses that do not sent large shipments of pallets at one time can be at a disadvantage from a cost perspective because they do not ship a high volume. These guidelines can help your ecommerce business minimize the increases expected by UPS and FedEx for next year.
Choose Your Carrier Wisely
As a small e-retailer, it is worth the time to research which carrier or carriers will work best for your shipments. With pending rate increases by UPS and FedEx, it might be the time to look at other shipping options. Since the increases are usually different based on destination location and not an overall increase across the board, you may want to use different carriers for shipments to different areas of the country, based on the cheapest rates. As your shipping volume grows, so does your negotiating power.
For small packages that do not weigh much, don’t forget about the USPS. Their rates are usually the lowest for these types of packages, with delivery confirmation and tracking numbers at no cost. Be sure to look into Priority Mail, Priority Mail Flat Rate, and Priority Mail Regional Rate to find which options will be most economical.
Determine Customer Shipping Fees
Create shipping policies for when the business will pay for shipping and when the customer will. Will you offer free returns? If so, find the easiest way for those to be sent back. Once you have determined your shipping policy for purchases and returns, communicate them to the customer via your website and customer service.
Use a Small Business Specialist
Most carriers have a small business specialist that will work with your business to meet your shipping requirements. Discussing mode of transportation and delivery timing can help to shave off at least 30% in fees. For example, using ground services instead of air services might be better for certain sized packages instead of others, depending on weight and distance.
Use a Postage Meter
A postage meter is an invaluable tool for a small ecommerce business. Use it to weigh packages, determine postage charges, and print shipping labels so you are paying exactly what you should, and nothing more. Pitney Bowes, a postage meter provider, estimates small businesses can save as much as 20 percent on shipping costs by using one.
Pay Attention to Additional Fees
Most likely, additional fees like extended delivery and fuel surcharges will increase in the coming year. In addition, peak season surcharges are expected to go up. During this time of year, an ecommerce business might try driving customer pick-up in its stores with incentives.
Analyze Carrier Performance
Whether you are using one shipping carrier or three separate carriers, it is important to understand the costs associated with each, as well as the service you are receiving. Keeping a scorecard with metrics such as meeting pickup times, delivery reliability, customer service, and access to tracking data are all components that should be evaluated. Overall costs should be compared among carriers, including baseline costs by weight and distance, cost by service level, and any additional fees.
To find out if you could be saving more on your ecommerce shipping, contact us at www.kablefulfillment.com.