It’s been said in all kinds of business reports that COVID-19 served as a catalyst for boosting the e-commerce industry to grow tremendously and even forever changing how consumers shop. With a huge influx of newcomers, the online business is getting much more competitive, while today’s consumers are expecting a lot more than just affordable and high-quality products: free shipping, even free two-day shipping, free exchange and return, durable and beautiful packaging, etc. Excelling these fulfillment steps would not only bring you a competitive edge in the marketplace to attract new customers, but also reduce cart abandonment and retention rate to help you build a loyal customer base.
With all that said, now you’re probably wondering: but how can I afford all that?
We get it. Shipping can definitely be expensive and take up a large portion of operating cost, especially for small and medium sized businesses (SMBs) going against retail giants. In the next sections, we’ll share some tips on how to reduce shipping costs while providing the best possible shopping experience for your customers.
Mapping out Shipping Strategies with Low Cost
First and foremost, you’ll need to think about your shipping method and ask yourself - could you provide sitewide free shipping on all orders i.e. pay for all shipping costs yourself? If not, there are so many creative ways to do so：
- Free shipping if a certain amount is met (ex. free shipping on orders over $100)
- Free shipping when certain products are bought (high margin products that can cover shipping expense)
- Add shipping cost to product prices and offer free shipping on all orders.
However, as lucrative as these strategies may seem, they are all in some way posing restrictions on shopping behaviors. What if the customer doesn’t want to spend that much, or buy this particular product, or simply turning away for other sites with better pricing?
Ultimately, you’ll need to cut down shipping costs. One way to do so is applying for a business account with carriers such as USPS, Fedex, UPS, and DHL, which are the most popular and common carriers for domestic shipping in the U.S. All of these carriers provide business discounts on shipping labels, and the more you ship, the better discounts you’ll receive, along with lots of other benefits, including lower surcharge fee, free pickup, etc.
If you’re just starting out and having trouble finding a carrier with low discounts, we recommend you try the second option - find a shipping partner. Now, there are many shipping solutions available, among them we recommend you to try ShipSaving, which charges only 1 cent per label and no additional subscription fees. For SMBs, it’s a flexible solution which doesn’t require upfront payment or a fixed cost.
Finding the Most Suitable Carrier and Service
If you’re just starting out, you’ll probably find yourself lost in the middle of all these different carriers and carrier services. To find the service that suits your business best, there are two factors to consider:
- How time sensitive is the product you’re selling?
- What are the dimensions and weight of your package?
Shipping cost varies mainly depending on the dimensions, the weight, the distance to travel, and other factors such as signature and insurance. Let’s look at each one of these factors and see where we can cut down shipping costs.
The first thing you need to check is if you’re shipping time sensitive products which include perishable items, urgent items, etc. If so, you should look at expedited shipping services that guarantee overnight, one day or two day delivery, such as USPS Priority Mail Express, FedEx Overnight, UPS Next Day Air, etc, depending on how fast you need your package delivered. Please keep in mind that all these services have certain restrictions to weight and dimensions, and they are also more expensive.
If delivery time is not one of your biggest concerns, then there are more affordable options to fulfill an order. For example, we recommend you to try FedEx Smartpost and UPS Surepost, which are fulfilled by FedEx and UPS hubs while USPS provides the last leg of delivery. One thing to keep in mind is that not all carrier accounts provide Smartpost and Surepost services. Even though these are very economical services, not every e-commerce merchant knows about them. USPS priority mail and first class mail are also great options for low-weight packages. ShipSaving offers all these services and has the lowest possible rates.
Besides choosing the most affordable service, you should also consider if your box is packed tight enough. Shipping a smaller package can be significantly cheaper, thus you could ship with smaller boxes while making sure the products are properly and safely packed. While carriers do provide predefined packaging, we recommend that you use customized packaging, which not only saves shipping cost with the size you prefer, but also helps build your brand image. Arka provides affordable branded packages that are entirely customizable and eco-friendly.
Last but not least, travelling distance is another important factor to shipping cost. Carriers differentiate shipping costs based on delivery Zones, which stand for the distance between the package destination and where it’s shipped. From Zone 1 to Zone 9, the longer distance a package needs to travel, the more expensive it is. To solve this problem, you could distribute product inventory across the U.S. and ship to the closest destination accordingly. This also helps reduce shipping time. While working with fulfillment warehouses does cost extra, they do provide better shipping rates since they fulfill a large amount of orders and have better carrier discounts.
Let Your Customers Enjoy Free Shipping Today
To sum it up, there are many tricks to do logistics, and these tricks can save you serious money in the long run. We all know that free shipping is what all customers desire and what e-commerce merchants hope to offer. Though shipping costs can be quite expensive, especially for SMBs, there are many ways now available in the market to support the e-commerce industry's growth. Free shipping is no longer a dream, if you know how to do it right.