There’s no denying that the cost of delivering your products can weigh heavily on your online business, ultimately cutting into your profits. The challenge is, charging your customers too much for their shipping can risk loss of business, while failing to charge enough can have a significant impact on your bottom line.
Now while this is becoming a problem that more and more retailers are faced with, there are in fact options for overcoming this.
Simply by securing the best value delivery rates on the market.
Obvious as it may seem, many of the tips outlined below are often overlooked, despite the fact they can help you save money and even improve your business processes.
So, with that in mind, here are six options for helping you save money on your shipping costs.
1. Negotiate your shipping charges
If you weren’t already aware, one of the easiest ways to make savings on your delivery costs is by outright asking for them. In fact, in most cases the rates advertised by shipping providers, including the likes of FedEx, Yodel and UPS, aren’t set in stone and can actually be negotiated by sellers.
There are of course a few things to bear in mind, regardless of whether you’re negotiating with your existing provider or looking for a new shipping service.
Firstly, you will likely get a better response by picking up the phone and speaking directly with a representative or someone else with authority, as opposed to negotiating via email.
Secondly, it’s worth bearing in mind that some providers will be more responsive with negotiations if you agree to lock yourself into a yearly or multi-year contract.
Finally, it’s worth familiarising yourself with your current shipping expenses, reviewing if and where any extra fees are coming from, and negotiating these with your carrier.
Always start by doing your research and actually get some quotes from a number of other providers, as this will give you more credibility.
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2. Shop around for prices
If you sell products of different weights and dimensions, you could actually be saving yourself money on your shipping costs, simply by using multiple carriers.
Yes, there can be benefits to using the same carrier for all parcels, the most obvious being a potential reduction in costs, thanks to bulk shipping. Depending on your product offering, however, this won't always be the case.
Because different providers will be more cost-effective for certain parcel types, i.e. those with specific weights and dimensions, and may be able to offer better rates for these types of products.
In other words, if you sell products of different sizes, this could be a great way to drive down your delivery costs.
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3. Use a Shipping Aggregator
Shipping aggregators such as Parcel Station, Temando and Parcel2Go tend to be overlooked, despite the fact they can offer huge savings. Specifically, these shipping aggregators work by understanding your shipping needs, and selecting the right carrier at the best price for your parcels.
But that’s not all.
As they use the leading couriers on a regular basis, they can actually obtain reduced rates and pass these rates onto their customers, saving you further costs.
Similarly, you can consider the use of a parcel and carrier management solution such as GFS, in turn leveraging their buying power and gaining competitive rates on carriers.
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4. Claim Shipping Refunds
Another alternative to saving money on you shipping costs is through shipping refunds. To give you an example, providers such as FedEx and UPS both offer money-back guarantees, in the event that they fail to meet their guarantee.
While this is in no way an ideal scenario, largely because it means your customer’s satisfaction may have been jeopardised due to late delivery, it’s certainly an option worth being aware of.
If you’re thinking that the process of claiming a refund is more hassle than it’s worth, there are various services out there, including 71lbs, RefundTiger and Refund Retriever, who will handle the entire process – screening packages and filing refunds on your behalf – all for a percentage of the refund.
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5. Use a Fulfilment Service
Another way to save both time and money is by using a fulfilment service that stores, packages and ships your orders on your behalf (many will also even handle customer queries relating to fulfilment), eliminating the overall hassle incurred with delivery.
Perhaps the most well-known fulfilment provider is Fulfilment by Amazon (FBA), who contrary to the name, do also hold and ship goods that have been sold outside of the Amazon marketplace.
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6. Consider Social Delivery Services
In recent years, social has impacted just about everything and the delivery industry is no different. In fact, Norwegian peer-to-peer delivery service, Nimber, recently arrived in the UK, providing retailers with a whole new option for delivering their parcel.
Nimber specifically enables sellers to send their items through a reliable and personal delivery service, by using its community of ‘bringers’ and ‘senders’. As a sender, you will be matched with one of Nimber’s ‘bringers’, who is already making the journey to the area, and will only pay a small fee which often works out cheaper when compared to the likes of Royal Mail, UPS and other courier services.
Always Look Beyond Expense
Despite everything we’ve covered, you should bear in mind other factors such as convenience. At the end of the day, yes, shipping costs are important to customers, but so are quick, reliable deliveries, so make sure you’re not overlooking this in your quest to find the cheapest shipping costs.