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5 Strategies for Reducing Ecommerce Shipping Costs


5 Strategies for Reducing Ecommerce Shipping Costs

One thing all eCommerce businesses have in commonis that they could be saving on shipping. All eCommerce businesses, irrespective of the industry, size, and experience level, can stand to increase their profit margins when they take the time to lower their shipping costs.

If your shipping prices are low, customers are more likely to complete a purchase with a positive experience. According to a National Retail Federation (NRF) study, about two-thirds of respondents expected free shipping when shopping online, even for orders less than $50. Additionally, high shipping rates are one of the top reasons why people abandon their shopping carts.

There area few strategies that can be effective in reducing shipping costs for eCommerce businesses of any size.

Slim Down the Package Weight

While it is not always possible to reduce the weight of your actual products, you can easily slim down on the custom packaging and the infill.

  • Corrugated boxes come in a variety of thicknesses. Use lightweight boxes when possible to reduce the overall weight.
  • Match the shape and size of the box to the product inside. When you use oversized boxes, you are overpaying for shipping. Using the right sized box also reduces the amount of packaging materials needed to fill up the extra space inside.
  • The packaging around your products is essential for branding and for protection, but it also adds to its weight. Find creative ways to convey your branding and keep the items safe without adding weight to your orders.
  • Use lightweight shipping bags wherever possible. These are great for soft items, like clothing.

Tweaking your packaging can make for substantial savings over time.

Negotiate Shipping Rates

Shipping carriers provide discounts based on shipping volume. Any business can negotiate their rates with their carrier. You do not have to ship thousands of orders a month to get access to these discounts, although it certainly helps. Partnering with a fulfillment center is one way to access even deeper shipping discounts.

Add Shipping into Price of the Product

Shipping is never truly free. However, most shoppers prefer to buy from websites that provide free shipping. To give the illusion of “free shipping,” many companies add the shipping cost into the price the consumer pays for the product.Make sure it does not drive up the cost of your product too much, keeping in mind what your customers are willing to pay for it.

Use Third-Party Insurance

If you want to insure your packages beyond the standard amount, use third-party insurers. Top shipping companies, like FedEx and UPS, charge extra for added shipping insurance. What you may not know is that third-party insurance companies can offer significantly lower rates and sometimes, better coverage as well. Insuring your packages can help you cover refund costs if your products arrive damaged. This is especially important with valuable and fragile items.

Shorten Shipping Distance

Moving your products closer to your customers can help you save on shipping costs and reduce delivery time. Working with an eCommerce fulfillment company can give you access to more warehouse locations to ship out from.

Shipping rates are always going up, and you may not qualify for huge shipping discounts yet. You can get creative when it comes to your packaging and implement all these tips to cut costs. When you partner with a fulfillment center, like Universal Fulfillment, they can help you successfully utilize these strategies. They can also grant you access to higher shipping discounts because they have a higher shipping volume.

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