6 tips on lowering postage costs that will benefit your online sales figures
Lowering your postage costs will always have a positive impact on your business. In our experience, items for which the postage cost is higher than the item price itself are unlikely to sell. Also, items of clothing for which the shipping cost is higher than 10 Euros are also unlikely to attract many buyers. So, with this in mind, we are going to share six useful tips to help you lower your shipping costs.
Firstly, give your customers a choice of more than one delivery option. For some of your customers, speed of delivery might be critical, but for others, the price might be the priority. By offering a cheaper, slower delivery option as well as a premium expedient service, you give more control to the customer.
Secondly, monitor oversize charges. We all understand that delivery costs depend on the weight of your parcel. But did you also know that size matters? Many couriers such as FedEx, UPS and USPS have weight minimums and oversize penalties, which are referred to as DIM charges. So even though your parcel may only weigh 2 kilos, you may end up paying for 4 or 5 kilos due to the dimensions of your parcel. So make sure there is no wasted volume and that your parcels are as compact as possible. You may be able to adjust the length, width or height of your stock cartons to eliminate those extra costs.
Thirdly, use reward cards to pay for your shipping bills. From time to time, credit cards offer special cash back deals when you use specific couriers. Check online for current deals.
Use an online international shipping broker to find the best deals. This should be done regularly as prices can vary daily, the cheapest broker today, is not always the cheapest tomorrow. Shopping around can be a great way to keep your prices low and your service high.
Consider outsourcing order fulfillment to reduce your overhead costs. Outsourcing fulfillment is actually quite easy and a description of the process can be found in “Fulfillment: Guidelines for Outsourcing.” The trick is to find a good match between your order processing needs and the fulfillment company’s systems, methods and materials. Fulfillment fees are normally based on a per order and per item basis plus USPS, FedEx or UPS reimbursement. You then need to add the cost of monthly storage and optional warehouse service fees. You should expect a 100 percent satisfaction guarantee and a free trial before you make a commitment.
And finally, seek group discounts. Join a trade organization that offers delivery discounts. There are trade associations that offer their members UPS, FedEx and ground shipping discount programs. For example, the American Booksellers Association provides several aggressive FedEx and truck freight discounts. Of course your savings have to be netted against membership fees to check whether this strategy pays off.