How to Reduce Shipping Costs in E-commerce

E-commerce, being one of the most changing business industries, always has to keep up-to-date with the needs of their clients. Customers of online shops and companies operating on social media expect maximum comfort, cost, and time-efficiency from the purchases they make. That’s why there is a shortlist of key features every e-commerce company should possess to be successful. Quality of the products matter, but the terms of delivery often play the main role in the buying decision of the customer. Buying things online, people don’t like to spend much time on analysis, counting, and reading long pieces of information. That’s why sometimes even very good products don’t get purchased due to the complicated mechanisms of buying and product delivery. No need to mention that the great majority of clients are price sensitive. That’s why being accurate in estimating their own margin, benefits, and expenses, help companies form and offer a very attractive value proposition. Cutting down the shipping costs affects the clients’ buying decision and stimulates the whole selling process.

Here are some popular hacks on reducing and optimizing the shipping cost:

Analyze which type of delivery is suitable

According to the features of the product you sell, the first step is to choose the right way of delivery. Some food products, sensitive to temperature and other outdoor conditions, might need a speedy delivery, and here you should analyze whether it’s possible to cut down the cost with this type of shipping. There are also different life hacks on the best mechanism to send specific goods, for example, how to send clothes or electronic devices. Sometimes the type of products you sell doesn’t need anything sophisticated or super quick that’s why you don’t have to offer a quick delivery, which is often more expensive them the ordinary one, by default.

Work with local carriers

When you operate locally, you can always choose between the bigger shipping companies that deliver goods worldwide and a local player who sends shipments on shorter distances. Global carriers can offer a trustworthy mechanism, their good name, and many options, like shipment tracking, and so on. But not always their services can be affordable if the market you represent is a red ocean, and every penny you can cut down on the shipping cost can give you the chance to sell. On the contrary, local companies are less ambitious but often look for long-term cooperation and a stable market share in the region. That’s why they are usually more flexible, and you can negotiate the shipping fees and more likely bargain successfully. Using local carriers available on online platforms, you can minimize wasted capacity and save huge some on the shipping fee.

Always try new options

The market for shipping services also changes, and you have to check for the new trends and the new players who join the market. Being one of the first clients to a new shipping company is always a risk, as you still haven’t seen the results of their work and can’t usually start cooperating with a big number of orders. But new companies are looking for new clients, and the majority of them will do their best to keep you satisfied with the quality of services and their fees. So, don’t be afraid to try new options, send a couple of packs with them, and if you see their professional level is quite high, negotiate on price for the large-scale offers.

Use flexible price formulas

Many clients are more sensitive to insurance, many prefer to save money and not choose any. For some more expensive products, insurance is a must. That’s why you always need to offer more than one option of the shipment insurance to your clients. But sometimes, adding the insurance fee to the price is not the best strategy. You can always share a bit of responsibility with your clients and let them make the decision whether they like to add insurance cost to the sending, and which insurance company they prefer. So, you can always decide the price to separate components, such as product price, insurance cost, and shipping fees. In this way, many clients might be attracted by the bare price of the products, as it looks more efficient. Shipping cost itself, being separated from the potential expenses on the insurance, also looks not that frightening anymore.

Apply new technologies

Nowadays, IT companies have a wide range of products to offer to companies operating online. Ultimate shipping solutions for e-commerce are becoming very popular, as they give a long range of opportunities:

  • Helping the company choose a suitable method to calculate the shipping cost
  • Analyzing the data step by step, so you will always control the process of calculation and make sure nothing gets out of your sight
  • Calculating the cost-efficiency of shipping
  • Comparing the terms of world-famous shipping companies, which allows choosing the most suitable carrier
  • Stimulating sales via providing clear information on the shipping costs
  • Integrating to any kind of e-commerce platforms (Woo, Magneto, PrestaShop, etc.)
  • Providing many calculating options for more precise cost estimation, region, type of delivery, time and deadlines, etc.

Make sure you are aware of extra fees

Shipping companies get overloaded with the clients’ offers on holidays and around them. That’s why any sales camping should be analyzed very carefully before it starts. Shipping companies often don’t have the possibility to extend their facilities on national holidays, that’s why, to filter the rising demand and to cope with the extra-hours payment to the employees, they temporarily raise the shipping prices. In this situation, e-commerce companies have a couple of choices: to keep the price attractive, they can cut on the margin, or simply divide the price into two parts: the product price with a discount and a shipping price. In this way, they justify the sales and make the pricing clear for the customers. The other important issue is connected to possible delays in the delivery of products. That’s why analyze the terms and don’t give promises you’re not able to keep. Inform your clients about the possible changes in the duration of shipping time in advance.

Unnati Vaidya is a freelancer Content Writer and SEO generalist. She is an enthusiastic reader of Novels and a big fan of watching Sci-fi movies and seasons!

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