5 Tips to Lower Shipping Costs and Enhance Your Shipping Policy

Success in ecommerce retail depends on balancing supply chain logistics management with providing a positive customer experience. That includes creating a shipping policy that encourages purchases while still keeping sales profitable.

The fact of the matter is, seasoned online shoppers avoid shipping costs like the plague. In fact, according to Barilliance, the top reason for an abandoned cart is due to unexpected shipping costs.

That’s why it’s important for ecommerce retailers to have an optimized shipping policy that encourages purchases and increases customer retention. In this article, we outline 6 ways to reduce shipping costs to create the best customer experience with your shipping policy.

1. Reach Out to Your Shipping Carrier

Reach out to your shipping carrier

Shipping carriers play a vital role in creating an optimized supply chain that is cost-effective and reliable. They determine shipping rates, quick product delivery, product quality and safety, and more.

Shipping carriers have the power to influence the success of your business in many ways. So, it’s crucial to have a good working relationship with your shipping carrier representative and to take advantage of their knowledge and experience.

Start by having a conversation with them to identify areas of improvement. This may involve reviewing your current shipping strategy, identifying inefficiencies, and making recommendations to help you streamline your shipping processes.

The conversation also lets the shipping carrier know that you may not be satisfied with your current shipping costs. They know that if they can’t help you find a solution, you may go looking elsewhere for one. The last thing your shipping carrier wants is to lose you to their competitors.

So, you may end up getting better shipping rates just to stay on as a customer. They’ll be motivated to help you in any way they can to create a shipping policy your customers want.

By providing your shipping carrier representatives with detailed information about your business, including your shipping volume and the types of products you sell, they can better understand your needs and provide tailored solutions, which’ll make the entire shipping process smoother and more efficient.

Nurturing the relationship with your shipping carrier allows you to work with a trusted partner when forming a customer-friendly shipping policy.

2. Use Data to Find Issues in Your Supply Chain

Use data to find issues in your supply chain
Customer Lifetime Value isn’t the easiest thing to calculate and keep track of. With so many variables it can be difficult to get the big picture about the relationship between your brand and customers. Warranty data can be a valuable tool to provide clarification and insights about customer lifetime value and how defective products can actually strengthen your relationship with your customers.

In order to eliminate unnecessary shipping costs, you need to know which parts of the delivery process is costing you the most money. Finding problem areas requires data – and lots of it.

Reports from your carrier is a good place to discover where you could further streamline the shipping process to reduce costs. Work with them to see if you could find any inefficiencies in the shipping process and see if they have any recommendations on how to improve.

While a great place to start, however, reports from your carrier are often not enough to get to the bottom of where money’s being lost. In addition to these reports, collecting returns data on all customers help to further paint the picture of what’s happening in the supply chain.

If you notice you’re receiving a lot of feedback on misplaced items, late delivery, damaged products during shipping, or anything else of the sort, this indicates something way bigger than random, one-off incidents is happening here and it could be seriously costing you.

Backing your pain points with data of your own that you present to your shipping carrier representative helps both of you get to the bottom of things quicker. You may even end up supporting the discovery of a bigger problem in their process that helps not only you, but all of their other customers, further deepening your relationship with them.

Collecting data on supply chain processes should be a priority in creating an optimized shipping policy. It gives deeper insight into what’s happening when products go out for shipment and which parts of the process are costing the business the most money, and also helps strengthen the relationship with your shipping carrier, which a great shipping policy is dependent on.

3. Adjust Your Product Packaging

Adjust your product packaging

Shipping carriers have strict guidelines for packaging that affect the cost of shipping. This makes ineffective packaging methods a significant contributor to higher than expected shipping costs.

Finding the smallest packaging form possible that doesn’t hurt your product branding helps avoid paying oversized packaging fees. Evaluating packaging methods includes examining the size and weight of products and the materials used for packaging.

Any unnecessary elements or wasted space should be eliminated to avoid higher shipping costs.

Try investing in a scale. It could help you avoid shipping costs by giving you the ability to weigh products as you are setting packaging standards. This is also a good way to accurately estimate shipping costs, based off carrier guidelines and package weight, to properly allocate budget as needed.

Be sure not to overlook the materials used in packaging as well. While bubble wrap and other protective materials can help prevent damage to products during shipping, they can also add unnecessary weight and volume to the package.

Work with your shipping carrier to find the safest way to deliver packages to the customers door without the use of so much wasted material. Not only will this help you cut down on costs, but it’s ultimately better for the environment, so it’s really a win-win.

Focusing on small missteps in packaging can make a significant impact in overall shipping costs. It’ll help you enhance your shipping policy by getting products to the customer’s door without the fuss and mess of over-the-top packaging while keeping shipping costs low for both of you.

4. Take Advantage of Carrier Rate Discounts for Your Shipping Policy

Take advantage of carrier rate discounts for your shipping policy
The major distinction is when an item is purchased through your ecommerce store, a Shopify warranty can take effect immediately while with a third-party purchase, retailers are often in the dark about the buyer, what was purchased and when the sale took place.

Many ecommerce retailers are unaware that they may qualify for shipping rate discounts if they belong to trade organizations or if they belong to a certain industry.

Many trade organizations negotiate with shipping carriers on behalf of their members to secure better rates. These organizations may have a significant number of members, giving them more bargaining power when it comes to negotiating rates.

If you belong to any trade organizations, do your due diligence to learn about the advantages that come with being a member. If you’re not currently a member of any trade organizations, then it may be time to join one.

In addition to trade organizations, some carriers offer industry-specific discounts.

For example, if you are in the healthcare industry and ship medical supplies or equipment, you may be eligible for special rates from carriers like FedEx or UPS. The same can be true for businesses in other industries such as electronics, automotive, or beauty.

These discounts may be available because the carriers recognize the unique shipping needs of these industries and want to incentivize businesses to choose them. If you’re unsure whether your business falls in an industry that qualifies for lowered shipping rates, bring it up in your next conversation with your shipping carrier representatives.

It is important to note that while discounts may be available, they may not always be the best option for your business. For example, if you are currently using a carrier that offers a discount, but their rates are still higher than other carriers, you may be better off switching to a different carrier with lower rates.

Do your research and compare rates from multiple carriers to determine the best option for your business.

5. Hold Your Shipping Carrier Accountable to Your Shipping Policy

Hold carriers accountable to your shipping policy

Once a package is sent to the shipping carrier, the delivery process is out of your hands. Making sure your customer receives their products on time and undamaged is all up to your carrier service.

So, it’s important to hold them accountable when things don’t go as planned. Some carriers, such as FedEx and UPS, offer guarantees as a way to provide an added level of assurance to their customers. If a package is not delivered by the guaranteed delivery time, the carrier will refund the shipping cost.

While they may offer a guarantee, enforcing it is up to you. Taking advantage of this opportunity requires ecommerce retailers to be diligent in tracking their shipments and following up with the carrier when a package is not delivered on time.

According to an article written by Entrepreneur, a small business could recover anywhere from $4000 – $6000 in fulfillment costs by using this strategy. This may require dedicating resources to tracking and following up on shipments, but the potential cost savings make it well worth the effort.

Although a great option, it’s important to note that you still want to choose a carrier with a great on-time delivery record. Review carrier performance data to select a carrier who consistently meets their delivery commitments.

After all, the best way to prevent high shipping costs is to ensure the package gets to its final destination safe and on time in the first place.

Learn More About Supply Chain Management and Shipping Policies with ReturnLogic

Unnecessary costs in the supply chain could be getting in the way of having the best shipping policy for your ecommerce customers. While shipping costs are unavoidable, implementing the tips above will help to lower shipping rates and fees to help you offer the best shopping experience.

From negotiating with carriers to optimizing packaging methods, businesses can find ways to keep their shipping costs low without sacrificing quality or reliability. By paying close attention to the details of their shipping process and utilizing the resources available to them, businesses can minimize the impact of shipping costs on their bottom line.

Check out our resources tab to learn more about ecommerce retail logistics management and follow us on social media to join the conversation about intelligent returns solutions.

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