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How Ecommerce Companies Can Cut Their Shipping Costs.

February 28, 2020 by  
Filed under Money/Business, Tech/Internet, Weekly Columns

( The ecommerce sector is so competitive and new companies have to contend with the big players like Amazon, who offer low prices, huge product choices, and quick delivery. It’s important that you find any way that you can to get an edge on the competition. 

One of the best ways to do that is by reducing your shipping costs. Customers have certain expectations when it comes to shipping and they want products delivered quickly, without having to pay a lot of money for it. Big ecommerce retailers usually offer free shipping, so if you are charging a lot of money for delivery, it will put customers off. If your shipping costs are getting out of control, these are some of the best ways to reduce them. 

Audit Your Shipping Process 

The first thing that you need to do is audit the shipping process so you can work out exactly what you are spending and where. Look at things like the cost of packaging, the cost of warehousing and warehouse employees, the cost to ship LTL (less than truckload), and the amount of money that you are spending on returns from broken items. During this audit, you should be able to work out exactly where your money is going and where the waste is.

Negotiate With Couriers 

If you find that the majority of the money that you spend is going to your courier, you need to do something about it. When you make an agreement with a courier, it is important that you negotiate with them instead of taking the first price that they offer. Shop around a few different places and get some quotes and then you can use this as leverage during your negotiations. 

Consider Regional Couriers 

When looking at different couriers, don’t just go for the big national and international companies, you should consider the regional couriers as well. If the majority of your products go to the same small area, a regional courier may be your best option. They only cover a small geographical area so they usually charge a lower rate, and they will be more efficient because they know the area well. 

Streamline Your Packaging 

One of the biggest costs that businesses tend to overlook is the product packaging. If you find that your packaging costs are very high, you should look for cheaper alternatives. It is important that you have some kind of branding in your packaging, but don’t go overboard because it will increase the cost. 

Your main focus when choosing packaging should always be protection. If your packaging is flimsy and products are not protected properly, you will have a lot of breakages in transit. You have to pay to replace all of those products and the extra cost will either have to be added onto shipping costs or absorbed by the business, so you lose money. 

If you can make these simple changes, you will be able to cut your shipping costs by a lot, which saves the customer money and makes your business competitive.

Staff Writer; Joe Shaw

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