“Free shipping” — it’s what customers today expect to see when they shop on online. So how can an ecommerce seller absorb those shipping costs without wreaking havoc on its profits? You could just raise your prices, but customers won’t like that either. Fortunately, you can change things about the way you ship to minimize the financial impact.
Decide how much you can absorb.
You just may not be in a position to pay 100% of the shipping on every single order. But you could still favorably impress customers by offering it on orders over a certain dollar amount. Figure out what that amount is, taking into account average order value, surcharges for weight or size, and so on.
Downsize your packaging.
Lose the habit of using the same size box for many different sizes of product. Smaller boxes cost less to buy. Plus, many carriers calculate their shipping prices based on a combination of size and weight called “dimensional weight,” so a smaller box will cost less to ship even if it weighs the same as a bigger one. To make box selection easy, there is software that will do it for you based on each SKU’s measurements and weight.
Also, are you automatically using bubble wrap for every item, whether it needs it or not? Invest the time to analyze each SKU’s real protection needs, especially those that are already boxed by the manufacturer. Conversely, giving some products more protection can prevent damage in transit and reduce the number of returns.
Choose hybrid shipping options.
In hybrid shipping, your carrier (such as FedEx) gets the package from you to its destination city, then hands it over to the U.S. Post Office for local delivery. This enables significant cost savings while keeping the customer happy with your speed and service.
Look beyond UPS and FedEx. There are many other shipping services out there who can provide better prices and equal if not better service.
Let shipping software save you time, manpower and money in every step of the fulfillment process, from verifying address accuracy to printing labels to tracking deliveries.
These days, no ecommerce seller can afford to leave its shipping process on autopilot. Look for new solutions and strategies to minimize costs, and keep your net profits right where you want them.