When asked what could be most improved by retailers, nearly 60% of people who shop online indicated that they would prefer free or low-cost shipping. And who can blame them? As a shopper, shipping feels like throwing your money into a void. But you as the retailer in charge of Ecommerce fulfillment know that that money is extremely important to your operations. After all, logistics solutions aren’t free. So how can one cut the costs of logistics solutions while still maintaining customer satisfaction? Below are a few ideas you might want to consider as you strive for better fulfillment distribution:
1. Optimize your warehousing and distribution
Many consumers believe that shipping starts in the truck. You know better. For you, logistics solutions begin in the warehouse. 91% of people in your business agree that optimizing warehouse room is their top priority. After all, rent is a fixed cost, so you want to get out as much use from the asset as possible. One way to achieve this is to keep strict inventory statistics and only order as much as your projections for a particular season require. Another is to pack top to bottom and not just across the floor surface.
2.Charge sign-up fees instead
Transferring the cost of shipping to other areas of the transaction may also be one of a host of viable logistics solutions. Many people curiously would rather pay a one time joining fee or even a monthly subscription fee rather than lay out money piecemeal for every purchase. This is a similar business model to Amazon Prime, for example. The blow of this fee might also be softened if it included an online package tracking feature, something that the modern consumer cares greatly about.
3. Factoring in the shipping price beforehand based on dimensional weight
Dimensional weight, (commonly referred to as “dim weight”), is a marketing logistics concept that involves charging for shipping based on an assumed baseline weight of a package by dimension. This would allow sellers like yourself to assign a value to shipping and then add the shipping onto the purchase price of an item based on box size rather than weight. It is especially profitable if you frequently ship items in small, lightweight boxes.
Above all, you must keep accurate and complete financial records if you’re ever going to make headway cutting costs. You can’t know what to cut if you don’t even know what you have in the first place. It’s also a good idea to do a complete financial analysis of your organization as it relates to market trends and similar business models. You might be thinking “But why would these businesses forfeit their financial information?” And you’re right. Most probably wouldn’t. But a lot of outside research has been done, and you can learn a lot about the market by reading widely available financial sources. If you feel you have more specific advice please, leave your wisdom below in the comments section. We’d all like to save money on shipping prices.
