Shipping charges can often be a large expense for any business, but getting it right is crucial, for you and your customers. In this article, we cover how to cut costs on e-commerce shipping.
Free or discounted delivery options
With so many big brands out there offering free delivery, it can feel like you are up against the big guys, but even though you are a small business you can still offer this service to your customers.
If you want to offer your customers free shipping, there are ways you can do this. One of the most common ways you can make free shipping work is to build the shipping price into your overall product price. If this would eat into your profit, you could even just add in a small percentage of the delivery cost, so you can still offer a lower cost delivery than you have before. This is a fine balance, as you have to ensure that you are still keeping your prices competitive, but this is a good alternative to allow your customers to have free or low-cost shipping. To do this effectively you have to know your profit margins as if you have products that are popular and have a high-profit margin, this will allow you to cover the cost of the shipping, without having to add this into the overall cost of the item.
Top-Tip: Offer Free Shipping when customers reach a certain spend, set this just over your AOV (average order value). Customers would rather spend a bit more on your products than on shipping, the extra profit from extra items helps off-set the free shipping.
Save money on packaging
Packaging is one of the most popular ways that e-commerce companies can save money on shipping. Below we have outlined five effective ways that you can cut costs.
- Ditch the boxes
Often when shipping an item in a box, there will be plenty of leftover space that you will be paying for. Unless your item fits in the box perfectly, look into using padded or bubble-wrapped envelopes.
- Buy in bulk
Buy more to save more! If you buy your packaging in bulk, you may receive a discount from your supplier. Shop around and choose the best offer you can find, just remember to ensure you have the room in your warehouse to store them.
- If the courier offers packaging – use it!
Shipping companies have set dimensions on what size parcels you can send. If your boxes do not fit these requirements then you can incur fees. Some courier companies will provide their own packaging, if they do so, use it to avoid any unnecessary charges!
- Look into eco-friendly options
Although eco-friendly packaging is usually more expensive to buy, it is usually more lightweight than traditional materials. This could mean it may end up being cheaper and more cost-effective. Not only will you save money, but you will also be doing your bit to help the environment.
- Reuse old packaging
If you really want to save money and emphasize recycling, you could reuse old packaging that you receive from returns or other orders. Instead of sending all these packages to the landfill, you can reuse them, help the environment, and save money all at the same time! You can use this type of packaging for shipping to suppliers and other businesses, rather than customers.
Reduce your product returns
If you reduce your rate of product returns you will not only save money on shipping but also overall on your business.
There are many factors that eat into profit when you receive a customer return, we have outlined a few below
- If you offer free shipping.
- The extra costs for processing returns.
- The cost of packaging, as you may not be able to reuse this.
- The loss of product cost, as you may not be able to resell this item.
- Issues of customer fraud.
Each of these points can add up and impact your overall profit, so it’s important to ensure that you work towards a low return rate. Below we have outlined a few ways to help keep your product returns low.
- Product descriptions need to be clear and accurate, listing all features and dimensions.
- List what the purchase includes and does not include, this is important to clarify before purchase.
- Ensure you have accurate product images that display the item correctly and do not show anything that is not included in the purchase that would disappoint customers.
- Offer a longer returns time frame, studies show that the longer the return rate, the more likely the customer is to keep the product.
Use a printing software
It might seem like a no-brainer, but even the smallest eCommerce business should try and utilize printing software. Not only will this save you valuable time, but it will help streamline your overall shipping process. Investing in printing software will also make things easier for overall business growth. By allowing software to take care of this menial task, you and your staff can instead focus on something which has higher priority.
Use a Courier Comparison Website
Courier comparison services offer small businesses a fast and efficient way to contrast and compare the best prices for your shipment. Here at Irish Parcels, we work with the most experienced courier companies to ensure your items are treated with the utmost of care. We can offer you discounted prices, compared to going direct, offering you and your business savings on every shipment!
Irish Parcels is used by hundreds of local small businesses in Ireland and is committed to keeping costs as low as possible. To learn more about what we offer and get a quick quote check out Irish Parcels here.
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