Are shipping costs negatively affecting your bottom line? With persistent issues like the global economic slowdown, supply chain disruption, and rising living costs, eCommerce margins are being squeezed.
Most online retailers do not have excessive costs when it comes to manpower, physical stores, and traditional marketing. On the flipside, the logistics and delivery piece brings its own issues, and can be expensive to manage and get right. As the cost of supply continues to rise, reducing shipping costs is one way to protect your margins.
Here, we share ways that you can manage both direct and indirect shipping costs better, without harming the customer experience.
Getting orders delivered correctly
If your labelling process is disjointed, it takes unnecessary resources to keep your head above water. Entering shipping information into multiple carrier systems can impact shipment preparation times, and affect fulfilment speed. Fashion brand SikSilk experienced the woes of labelling.
It’s thought that eCommerce returns will cost UK retailers an estimated £5.6 billion by next year. One surefire way to save money is to stop offering free returns. However, this will likely affect your conversion rate too.
So it’s imperative to do the maths to determine the impact that returns are having on your shipping costs. If your return rate is above 20-30%, adopting alternative strategies can help tackle the astronomical cost of reverse logistics.
Missed and late deliveries
1 in 20 orders never make it to their intended destination. This is often down to inaccurate shipping information that’s supplied by customers, or incorrect data inputting by the retailer themselves. Sophisticated order tracking can reduce missed or late deliveries as potential errors are much easier to spot through one connected system.
Having a carrier contingency plan
Switching carriers when issues arise
If carriers can’t deliver an order, it can end up costing retailers in a big way. Customers need to be refunded, which causes brand damage and affects repeat business (read: lost revenue). Having the option to quickly choose a new carrier to fulfil orders when issues arise can help control delivery costs massively.
However, integrating additional carriers into your existing systems can cost thousands of pounds and take months to implement. Therefore, the best way to be able to switch carriers on and off is through a delivery management platform.
Avoiding shipping delays
Shipping delays can hinder the number of orders that a retailer can ship at any given time, resulting in lost sales. This can be a nightmare for a brand, especially during peak periods if they don’t have enough hands on deck to maximise order fulfilment. Delays also harm the overall customer experience, leading to cancelled orders, or, at the very least having to compensate shoppers. Having a contingency plan (such as offering more shipping options at checkout) can help to avoid losing money due to delivery delays.
Maintaining great customer service
When delivery issues arise, it puts significant strain on your customer service team. WISMO queries increase, and if carrier and customer systems aren’t connected, your standard of support can collapse. 79% of consumers expect to receive a more attentive customer experience when their shipment has been delayed. With real-time customer and delivery data, you’re less likely to lose customers, meaning that shipping costs won’t suffer.
Managing multiple carriers
Negotiating with carriers
By using a single carrier, you hold very little power as far as delivery costs go. By building a network of carrier partners, however, you are in a better position to negotiate lower delivery rates. If a carrier reaches its capacity threshold, you can also easily switch to another partner, avoiding delivery delays and unnecessary shipping costs.
Maintaining control of your deliveries
While outsourcing fulfilment to a 3PL might take the stress of deliveries off a retailer’s doorstep, it doesn’t reduce the cost of deliveries. Not all 3PL providers grant access to delivery tracking, meaning you lack a level of control over orders. This, in turn, inhibits brands from offering a personalised service. If you use a delivery management platform, inefficient delivery processes are streamlined, giving you autonomy while saving on third-party costs.
Expanding your business
Avoiding customs issues
Cross-border shipping costs can be extortionate if you aren’t assigning orders to the most appropriate carrier. This is particularly difficult if you are manually managing orders. Being able to set rules and triggers to choose the best carrier to deliver to a specific region is extremely cost effective. Printing customs documents also comes at a price. Standard customs documents can add three pages to your print run for every order placed. These costs can be avoided completely by amalgamating customs information on a single shipping label.
Integrating and maintaining new carriers
Working with multiple carriers is a no-brainer if you want to manage your shipping costs. However, integrating each new carrier can cost up to £20,000 if managed in-house by developers. This can really limit retailers in terms of the carriers that they choose to work with. With a delivery management platform, you can instantly access local and international carriers and start shipping with them right away, at no additional cost.
Discount fashion brand Everything5Pounds spotted a big opportunity in Eastern Europe, and leveraged Scurri’s technology to partner with local carriers in Bulgaria, Romania, Lithuania, Latvia and Estonia. Something that wouldn’t have been financially viable if individual integrations were required.