The expectation of free shipping by online shoppers has created the need for retailers to find more cost-effective shipping methods. This includes changing packaging, negotiating with shipping carriers, changing shipping schedules, or outsourcing fulfilment.
But during the pandemic and subsequent supply-chain crisis, retailers learned anew just how expensive it can be to offer free shipping. Fuel costs rose, while warehousing space and delivery drivers grew harder to find.
In times like these, smart retailers should look to cut the cost of shipping. The question, of course, is how best to approach this. Questions such as, should a retailer outsource fulfilment to a third party or marketplace? Or does keeping shipping in-house have advantages of its own? Can changing shipping schedules or packaging types make a difference? Is there room to negotiate with carriers?
Diana Nolting, VP of Product at Linnworks explores how retailers can stand out from the crowd with five game changing tactics:
Right size or optimise packaging
Winning brands constantly look at innovation in ecommerce packaging, consistently exploring new materials, designs, and technologies to support their packaging needs, with the primary focus on efficiency, sustainability, and customer experience. Lightweight materials can reduce shipping costs, packaging designs can minimise waste, curbside recycling is possible, and innovative solutions can prevent product damage.
Consistency in packaging is also important since it ensures that products arrive safely and in good condition, underpinning customer trust and supporting brand loyalty.
Diversifying carrier and courier networks
Today, businesses seeking to balance costs with economic uncertainty while meeting rising consumer demands have turned last mile delivery into a critical battleground. The adoption of a carrier diversification strategy offers several advantages that can enhance the efficiency and reliability of last mile delivery operations. And, in the fast-paced world of retail, last mile delivery plays a pivotal role in shaping the customer experience. Recognising the risks of relying on a single carrier, and embracing the opportunities that come with regional carrier diversification is essential for achieving reliable, efficient, and customer-centric shipping operations.
By integrating the carrier network into a unified technology platform, businesses can mitigate delivery impacts, reduce risks, and foster brand loyalty. Moreover, seamless integration with the businesses’ technology platforms opens the door to co-innovation and improved operational performance, ensuring the business stays ahead of the competition.
Leveraging shipping technology for route optimisation and carrier rate comparisons
With modern logistics suffering single-carrier dependency, carrier diversification solves this problem by using multiple shipping providers which in turn boosts supply chain resilience and adaptability. Shipping Management Software can be a serious timesaver in helping businesses find the lowest-cost shipping service for orders.
As a result of integrating a comprehensive shipping management platform into a business’ ecommerce stack, the company will be able to automate shipping workflows and order routing, improve accuracy and save even more time. By consolidating order management, inventory management, stock forecasting, warehouse management, and shipping tasks into one easy-to-use platform, businesses will be able to deliver orders to their customers faster.
Improving inventory visibility to consolidate orders and reduce the number of shipments
At its core, it’s the process of making sure the business has the right products available at the right times, ensuring it manages inventory effectively. With real-time inventory information and a comprehensive WMS, warehouse staff can quickly locate items, pick orders accurately, and optimise workflows. This reduces the number of trips needed to fulfil orders and lowering transportation costs. Warehouse managers can also take proactive measures to prevent stockouts and reduce carrying costs by monitoring and alerting real-time inventory and taking action when shortages are detected or overstocks are detected. By increasing efficiency, warehouse capacity can be utilised more effectively and throughput is increased.
Automate the order processing workflow from incoming shipments to label creation
The automation process can help businesses generate shipping labels, track packages, and provide shipping updates to customers, as well as integrate seamlessly with shipping carriers. Thus, businesses can reduce errors associated with manual data entry by automating this aspect of order fulfilment.
Online marketplaces, for example, can integrate their order processing system with multiple shipping carriers, allowing them to compare rates, generate labels, and track packages all within the same platform. As a result of this integration, their shipping processes streamlined and their operational efficiency improved.
Conclusion
There’s no doubt about it: the cost of shipping can eat into your profit margins. Reducing shipping costs may seem like a big challenge, but the reality is there are many methods available that can help bring them down. Ultimately, the key to strategic shipping lies in really understanding the customer base and aligning shipping options with their preferences and the businesses’ goals. From auditing current shipping practices to strategically offering shipping promotions, each step offers a path to not only saving money but also adding value to the customer’s experience.
Therefore, it’s clear that investing in a smart solution that streamlines shipping and fulfilment processes, bringing efficiency, cost savings and satisfaction is viable for both businesses and customers. By doing so, businesses are not just managing shipping, they’re optimising the entire ecommerce operation for success.
Photo by Kevin Woblick on Unsplash
