Are you an e-commerce owner and looking for some more ways to cut costs on shipping? You might have just stumbled upon the right place. There are many tips and tricks on how to cut your cost, some are more straightforward than others.
In this article, we will focus more on those that are associated with shipping. Some retailers might not directly associate some of these aspects with saving money. Even simple stuff such as displaying accurate delivery dates at the checkout for your customers can save you a little bit of money.
Here are some of the best ways to reduce ecommerce shipping costs:
1- Ship Items In Bulk
Let’s say your e-commerce sells mostly small products that can be easily grouped and shipped together. These types of products could be products like toothbrushes, small cosmetics, or similar. What you can do instead of shipping them separately, is to offer these small products in bigger packs and ship them in a bulk. Shipping in bulk is cheaper than shipping small items separately. Both you and your customer can save on shipping costs this way.
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Grouping items together also creates a better value for your customers. Customers are forced to be more conscious about their shopping behavior and plan their shopping accordingly. Not to mention that shipping less and in bulk is also environmentally friendly.
According to the insights provided by IBM, nearly 6 in 10 consumers surveyed are willing to change their shopping habits to reduce environmental impact.
2- Limit Return Shipping Policy
This might sound a bit radical at first. Especially nowadays, retailers use quick and free returns as their competitive advantage and wear them as a badge of honor. However, what about the zero return policy, what will be the influence on your e-commerce then?
The point of limiting the return shipping policy is to make your customers more aware of what they buy. The dark side of return policy is that anything can be returned fast and easily. Customers do not stop to think if they need the product or not. Online shopping became very impulsive during the covid times. Likewise, it is easier and cheaper for retailers to dispose of deflected goods rather than to repair them. Avoiding return policies might save you as much cost as any other method mentioned above.
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3- Use Optimal Packaging
This is a very basic way how to cut costs and that is to ship the orders in optimal packaging. Products packaged in bigger boxes than necessary are in the majority of cases also more expensive. This is due to the fact that carriers charge more for bigger packages as they take more space in the vehicle.
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Having optimal packaging for your products does not only help you save on shipping but is also eco-friendly. Also, bear in mind that having reusable shipping boxes can help you save money as you do not have to keep ordering new ones. Some companies even offer reusable shipping containers that can be returned after delivery is finalized.
4- Use In-Store Pickup
A great way to save on shipping is to use the in-store pickup option. In general, it is a cheaper option than home delivery. Giving customers an option to pick up their order in the store is giving them the much-needed convenience and flexibility they require. The customer can choose when and where they wish to pick up their package from the store. This is a win-win situation for both of you.
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Similar to in-store pickup is curbside pickup which gives the customer the option to pick up the order directly from your warehouse or store. In this case, there is no extra cost for shipping as the customer is requested to drive to the designated location.
5- Calculate Landed Cost Accurately
Landed cost is associated with international shipping. It is the total charge of all costs it takes to ship to its final destination so to the customer. Landed cost occurs usually during shipping internationally because of all the costs it takes to get a package across the borders. Landed cost includes shipment costs, insurance fees, value-added taxes, and customs duties. Not all the costs are always obligatory, some of the costs such as insurance fees or import licenses depend on the nature of the product and the country it is being shipped to. Let’s have a look at how landing costs help you decrease your cost.
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Landed cost accounts for every single cost starting from manufacturing to delivery. Accounting for these costs will ensure you set up your profit margin correctly. Miscalculating these costs can whip out your entire profit completely. Additionally, displaying landed cost at the checkout gives you more credibility, as no customer wants to be surprised with extra cost upon receiving a package from abroad.
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Bonus: You can use tools like Calcurates which helps you to calculate and display the right shipping methods and rates to your customers. It makes shipping cost-effective and sales-stimulating.
6- Do Rate Shopping
Rate Shopping or sometimes called carrier rate shopping is a very popular term in shipping. Rate Shopping compares shipping rates between shipping carriers or their services and displays the cheapest one at the checkout for your customers.
You can compare various carrier services between each other and pick the most suitable for you. For example FedEx ground vs UPS ground. This process is naturally very time-consuming and not very effective when done manually.
Rate shopping can significantly increase your sales, lower cart abandonment rate, and increase conversions.
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High shipping costs discourage your customers from ordering online and thus they decide to abandon the shopping cart. This ultimately leads to lower sales. If you do rate shopping and display the cheapest shipping cost at the checkout your customers will be more likely to proceed with the order. Having a user-friendly checkout experience decreases the cart abandonment rate. Low cart abandonment increases the conversion rate. All these steps lead to lower costs for your e-commerce site.
7- Display Estimated Delivery Dates
Estimated delivery dates enable you to let your customers know when their order is due. Surprisingly, estimated delivery dates also affect the cost of your e-commerce. If you schedule a delivery your customers can prepare in advance and plan their time accordingly. This way the package is not re-routed, sent back to the retailer, or left at the doorstep where it can be stolen or lost.
Summary
Follow the above tips to reduce ecommerce shipping costs. Reducing your ecommerce costs will improve the price that the customer has to pay. Reduced price will increase conversions, improve customer loyalty, and increases retention rate.
