One of the biggest challenges that online businesses and retailers face is the unexpected yet often overlooked shipping costs. These don’t just include the costs of shipping products to the customers, but also comprise of the cost of getting supplies shipped to you. Research has shown that almost 25% of your costs are solely due to shipping and businesses are looking for ways to lessen this sting as much as possible. The good news is that there are a number of strategies that can be used for cutting back on shipping and boosting your profits. Some of these simple ways are outlined here:
• Optimize your strategy
Are your shipping strategies in line with your business model? Amazon was able to shape its customer expectations around shipping to such a level that one-day and free shipping give its sales a boost. If it is possible for you to offer free shipping, don’t hesitate, but if you cannot afford it, then come up with some alternatives. For instance, you could offer free shipping for local areas or on orders above a certain amount.
• Consider flat rate shipping
You can also apply a flat rate of shipping on all orders as this can actually encourage your customers to order more as they will be paying the same amount, regardless of how many things they purchase. This not only aids you in boosting the average order size, but also makes the customer feel better about paying the shipping charges rather than frustrated.
• Provide free shipping to return customers
You can offer your existing customers a return incentive. Use a follow-up email for sending a discount code as it garners you repeat business. You can also boost sales during slow periods by offering free shipping to your subscribers.
• Negotiate shipping rates with carriers
Carriers are aware that once you have used a particular service for your shipping needs, you wouldn’t want to switch to another as it is costly and inconvenient. Therefore, these companies like ShipU USA provide you with excellent incentives to retain you as a customer. They are willing to negotiate rates and subsidize your costs and also include some benefits in your agreement. In addition, they can also provide discounts on volume. All you have to do is ask.
• User carrier’s equipment
Most notable and major carriers are ready to provide you with equipment and software for your business such as computers, scales and printers. Depending on your negotiation and the volume, they usually don’t charge you for using the equipment, which helps you in bringing down costs.
• Consolidate the business’s accounts
As shipping rates often depend on volume, it is beneficial for you to ship as many products as possible on your account. This doesn’t just include shipping customers’ orders, but also incoming shipments of raw materials and supplies. You can ask vendors and suppliers to ship products on your account, which also eliminates any markup that you might have had to pay on that cost.
These strategies help you in reducing shipping costs and enjoying greater profits.