How your e-commerce business can optimise its shipping costs

What are the strategies and solutions that an e-commerce business can implement to optimise shipping costs for a quality service?

For an e-commerce business, optimising the shipping costs of the goods sold is of fundamental importance.

The growth in global online sales in recent years has allowed e-commerce businesses to expand and consolidate what they offer, but at the same time it has meant adapting logistics processes such as storage and transport, in order to respond promptly to changing habits and the demands of an increasingly large and segmented clientele.

The cost of shipments is one of biggest considerations for companies that sell online and is generally entrusted to external providers, couriers and logistics professionals, who have an essential task – the punctual arrival of the product at its destination in the manner established during the purchase phase. As the final step in the purchase transaction, delivery should be a key contributor to the development of a profitable e-commerce business, but it is also an important influence on the choices of people who buy online. According to data from the Baymard Institute, 45% of consumers who start an online purchase without completing it (known as ‘cart abandonment’) do so because they consider the shipping costs too high, while 22% do so because stated delivery times are too slow.

This is why it is essential for companies to optimise their shipping arrangements by working with external professionals, while at the same time trying to minimise the impact of less-than-ideal logistics management on the end user. Aligning logistics processes with consumer needs means offering rapid delivery, reliable timing, tracking and a personalised service. But what can e-commerce companies do to ensure they measure up?

· 75% of regular internet users have purchased goods or services online in the last 12 months.

· The volume of online purchases is currently growing at a rate of more than 10% per year.

Strategies to optimise shipping costs

According to a research conducted by Eurostat, 75% of people who regularly use the internet have purchased goods or services online in the last 12 months, while the latest European E-Commerce Report reports that the volume of online purchases in Europe is currently growing at a rate of more than 10% per year. These are significant figures which both highlight the potential of an ever-expanding sales system, while requiring e-commerce businesses to ensure that all stages of the production chain are efficient. For some companies, the management costs of goods remain high and entering a market where some competitors are offering attractive delivery options is not at all easy. A series of factors is at play – the weight, the size of the package and the type of packaging.

· Size and weight. The basic shipping rate is usually calculated on volumetric weight, i.e. the ratio between the actual weight and the dimensions of the parcel. This can vary from courier to courier.

· Destination. The destination of the package affects the rate charged by the carrier. The calculation is made by determining the location of the consignee and the place of collection of the goods. These zones are subject to different tariffs, which may add to the final cost.

· Type and packaging of the goods. The value of the delivery content also significantly affects the final rate. Shipping bottles of wine, works of art or other valuable products may require special packaging, insurance or specific documentation which will increase the courier charge.

Clearly the best way to optimise the costs of a shipment is to choose a service for each consignment that best suits your needs while meeting the customer’s requirements. Here are some tips for reducing this expense while improving efficiency and competitiveness for your business.

Adjust the package size to the products. Improving the size/weight ratio based on the type of goods sold brings several benefits: first, you’ll need to carefully analyse the characteristics of the products and avoid over-large boxes and envelopes which might necessitate the use of internal packing materials, resulting in an increase in weight. Corrugated cardboard boxes, slightly larger than the item to be sent, will protect against damage to the contents, while fillers like expanded polystyrene, air cushions and bubble wrap will help you avoid adding excess weight, so you should get the best rates from your couriers. A simple solution would be to outsource e-commerce delivery to professionals who can offer a wide range of services and rates to meet your needs.

Choose the transport carrier based on the destination. For an e-commerce business that sells both in its own country and abroad, it is essential to carefully evaluate the journey that its goods must take to reach their destination and to take into account the possibility of resorting to multiple couriers, whether they are international players or local businesses. This is where it could pay to use the services of a multi-courier provider that can offer competitive rates. Companies that have an extensive international network of collection points can offer further advantages in terms of practicality and personalisation of the service.

Automate labelling and tracking. There’s a lot of back-office work involved in sending a package, and this can become a significant cost for an online shop. Qualified and fully trained staff to organise documentation, print and attach labels and follow the path of the goods are essential to an e-commerce business. That’s why many firms decide to work with third-party suppliers who specialise in shipping and who have the advanced technologies, skills and tools to optimise shipping costs and help reduce the risk of errors to guarantee a high-quality service.

Take care of the packaging. The choice and quality of packaging is dictated by the type of goods to be shipped. Delicate goods, such wine bottles, must be packed with particular care to avoid damage and allow adequate protection during transport. Packing items for safe transit is another aspect of e-commerce shipping that is best left to specialists who have the relevant expertise and experience.

Mail Boxes Etc. is the ideal partner to help you optimise the expenses of national and international shipping, with a wide range of solutions that can enhance your customers’ shopping experience. Choose MBE and take advantage of a unique and flexible service with expert shipping, a choice of leading carriers and specially designed packaging, selected to reflect the type of goods you’re shipping and suited to the needs of your company and your customers.

 Discover our shipping solutions here.