Rates can be negotiated with carriers. We encourage businesses to switch carriers because that is the most effective form of leverage. If you speak with your carrier and they are unwilling to negotiate. Allow the client to keep their returns. According to CNN, some of the largest retail chains are thinking about giving customers their money back and letting them keep the products they don’t want.
Reduce the package’s weight. While you won’t be able to reduce the weight of your products, you can reduce the size of your packing materials. There is no doubt that shipping expertise has never been more essential for retailers’ overall success, with e-commerce sales for 2021 rising by 14% over 2020. Small businesses will want to save money wherever they can, especially as supply chain issues and inflation continue to disrupt the industry.
Shipping companies are increasing their prices annually, in addition to the rising cost of fuel. According to Josh Dunham, Co-Founder, and CEO of Reveal, “what we have seen with this trend is that they are even having rate increases at the middle of the year.” They can raise other rates as well, but they will not announce them all. The percentage of their increase is simply an average of the transportation charge; therefore, it does not include any rule changes or additional charges. FedEx’s rate increased by 12%, while UPS’ rate increased by 10%.
Negotiate Rates with Carriers
FedEx made its highest operating income in the company’s history in December 2021, and UPS made its most profitable quarter ever in the fourth quarter of 2021. Both accomplished this, and they will continue to do so, primarily by raising parcel shipping costs for retailers. Accepting significant cost increases means not negotiating.
Dunham stated, “There are a lot of different ways you can negotiate with carriers.” Knowing your shipment profile is the first step, especially now that carriers are at capacity and have more shipments than they can handle; therefore, knowing where your shipments are going and their weights is one of your biggest leverage points. We encourage businesses to switch carriers because that is the most effective form of leverage. If you speak with your carrier and they are unwilling to negotiate,
Source From Different Manufacturers
Shipping costs can be significantly reduced, especially when you buy from suppliers in the United States. Carl Marks Advisors partner Keith Daniels thinks it’s important to look for ways to diversify your supply wherever possible rather than relying solely on a single nation or manufacturer. Both lower-priced goods and cheaper shipping may be available to retailers.
Let Customers Keep Their Returns
According to CNN, some of the largest retail chains, such as Target, Walmart, Gap, and American Eagle Outfitters, are considering simply refunding customers and letting them keep the products they don’t want. Customers have come to expect free returns from every retailer, even the smaller ones because they are so accustomed to receiving them. Allowing customers to keep their returned items will not only save you money on shipping them back to your store or warehouse, but it will also make it easier to restock them.
Alternatively, you could provide customers with free returns if they bring an unwanted item into your store, but your company might not be able to afford this option. Customers will still be eligible for a free return, and you will not be required to cover the shipping costs.
Offer Local Delivery or Pickup
Customers are so eager for free shipping that they are less likely to consider local delivery or pickup options if they can avoid paying to have their purchases delivered to their residences. Customers are aware that small businesses may not have the same budget as retail conglomerates like Amazon and Walmart for discounted shipping, so this is a great way for both you and the customer to save money.
Nearly a third of buyers, according to Shopify’s consumer trends data, have purchased something online and had it delivered to them locally during the pandemic. Indie retailers can also benefit from providing local delivery services by:
- Make it easier for locals to shop with your brand to connect with your community.
- Further, develop client experience by expressing farewell to delivery deferrals and variable expenses
- Increase sales by 25% by increasing average order value and cart sizes.
Slim Down Package Weight
While you won’t be able to reduce the weight of your products, you can reduce the size of your packing materials. Over time, even modest reductions in the materials used for packaging can result in significant cost savings for e-commerce shipping. In addition, you can save money on packaging and infill. Red Stag Fulfillment says you can accomplish this by:
- whenever possible, using a bag rather than a box.
- Since corrugated cardboard boxes come in a variety of thicknesses, choose the lightest one that will still shield your goods from damage during shipping.
- Match the item with the box. Both the weight of the package and the amount of infill required will be reduced as a result of this.
- Use air-filled pillows whenever possible to reduce your infill’s weight.
When getting ready for the busy holiday season, these tips can be especially helpful. Carriers may unexpectedly raise their shipping rates in order to handle the influx of online orders around that time. To avoid overspending on shipping costs, take some or all of these steps.
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