Shipping costs are a major pain for e-commerce sellers; there’s no doubt that you have felt the sting that comes with shipping costs. In a world where free shipping has become the norm and is expected, reducing shipping costs can help you generate more profit and potentially grow sales. There are many companies that help facilitate this, like Fetchy, and here are some of the best practices to cut your shipping prices.
Take the time to become familiar with your own history of shipping bills. This will give you an insight into extra fees including where they are coming from and how you can reduce them. See which fees are most prevalent on your bills and try to negotiate these areas in particular when talking to your carrier.
No matter who your current shipping carrier is, you should contact their competitors and request quotes from them. Talk to every competitor and not just big-name ones. Talk to the regional-shipping services as well. Even if you’re not interested in switching carriers, knowing what others might charge you can be an advantage when it comes to negotiating.
Give your carrier a call and speak to a representative, a manager, or someone else that has the authority to approve a decision on shipping rates. Don’t just email them, as emails are a tricky platform for negotiating.
There’s no harm straight from asking for lower shipping rates. Ask about discounts on accessorial fees, dim divisor, fuel surcharges, out of the way deliveries, and the other fees they implement. They might not give up without offering some resistance, but you never know if you don’t ask. Contracts are another good negotiating tactic. You may be able to negotiate a good contract if you’re okay with being tied down to one. A company may be willing to offer you a better rate if you sign a contract saying they will be your only carrier for a set amount of time; like a year.
Don’t shy away from name dropping the other carriers that have offered lower rates. That puts the onus on the current carrier to match – or beat – this rate. If they wish to keep your business, then they will have to offer you some form of consolation if they aren’t willing to match their offer.
The more things your store is shipping, the better the rate you can expect to get. Projecting the growth in shipping volume may entice a carrier to reduce the rate for you. Once they understand and recognise you want to increase your shipping volume, services such as FedEx and UPS may provide you with a three-month grace period to allow you to grow. That gives you a lower rate instantly. Just be sure to have done your calculations right, as the only way to keep this low rate is to meet the expected shipping volume.
Having both inbound and outbound shipping boosts your shipping volume and gives you extra leveraged when negotiating with the carrier representative. Most e-commerce businesses choose to reimburse the manufacturing distributor when they ship products to them, but doing this opens them up to potential fees.
You may receive a better offer from a different carrier, or you may not. Either way, you want to make sure you stick to your game plan; lowering your current rate. Get aggressive if you have to. The worst thing that can happen is that the representative for turned down your request. Don’t be afraid to push the limit to keep them on their toes. If they offer you a reduction of 20%, you ask for 50%. You may not be able to get 50%, but they may be willing to at least give you 30% of the compromise.
Carriers value your business and they are willing to work with you to keep it, especially if you aim to grow and are eyeing a global expansion. They don’t want to lose you to one of their competitors because negotiations went wrong. Making it sound like you might switch carriers puts pressure on your current one to keep you.
Fetchy is a great solution for this kind of problem. Fetchy is an online shipping provider that has teamed up with services such as DHL and UPS. With Fetchy, you have the option of changing courier without any problems. It also makes it easier to compare different providers and choose the right one.
There are a number of different ways to reduce the cost of shipping depending on the size of your business. Negotiation is a great place to start, but it is not the only solution you have. Also look into the fulfilment process and any other ways you can save money on shipping.