High shipping costs? Here are 5 things you can do to bring them down

Hi there! ?? Thanks for stopping by. We share expert, practical advice on inventory management, multichannel selling and warehouse optimization. If you're new to our community and would like to drive more efficiency and revenue in your business, click the "subscribe" button above.

Linnworks recent State of Commerce Ops 2024 report highlighted several inconvenient truths about shipping from the perspective of both consumers and retailers.

• Shipping delays and damaged items are the leading causes of customer complaints
• Most shoppers want to avoid paying for shipping or returns
• Shipping costs represent one of the biggest operational challenges for retailers

So can retailers ensure a positive consumer experience, reduce environmental impact, and control rising costs?

Diana Nolting, VP of Product at Linnworks, recently discussed the challenges and opportunities in shipping for online retailers with Krish Iyer, VP of Strategic Partners and Industry Relations at Auctane.

During the conversation (you can watch the video here), they discussed the following five game-changing tactics...

1. Right-size or optimize your packaging

While many retailers believe they have little control over packaging costs, Iyer suggests that optimizing a retailer's packaging strategy can often start with a simple conversation.?

"Do you know what packaging you're using?" asks Iyer. "But then do you know what kind of packaging is right, not only for the products and SKUs you're sending but also for the type of experience you want that end consumer to have?"?

This process goes beyond the unboxing experience. Retailers should also consider how the packaging can be used if items are returned.

For example, a customer buying apparel and ripping a poly bag open may be forced to find an old shoe box or Amazon delivery package to return the item.

"It's tempting to say that polybags are inexpensive and the most cost-effective solution for apparel," says Iyer. "But that may not be the reality of the experience you want, especially on returns. If you offer free returns, you're paying to ship a lot of empty space."

2. Diversify your courier and carrier networks

Having complete visibility and understanding over your courier and carrier networks is essential to understanding how these relationships impact everything you do.

“Do you know what's in your contract, and do you know what charges you're actually incurring?” says Iyer. “Retailers will often have somebody in a front office, a finance or accounting function that negotiates a shipping contract, and the technology or other shipping decisions that are then made in the warehouse.”

These decisions are often made without complete visibility of their impact on the business and customer experience.

Having more informed conversations and potentially diversifying your courier and carrier networks can directly impact the competitiveness of your shipping costs.

Strategies to consider while discussing shipping include:

• Engaging with local carriers: Local carriers may offer better rates and provide agility for same-day or regional shipments.
• Diversify your shipping: Scaling up the number of shipping partners or ways you ship can be an effective strategy for increasing revenue and reducing costs.
• Negotiate better rates: Consolidating your shipping volume with a select number of carriers can give you leverage to negotiate better rates.

3. Leveraging shipping technology for route optimization and carrier rate comparisons

Multiple factors, including size, weight, location, and expected delivery date, can impact the shipping cost, so retailers will want options to ensure optimal service.?

“It’s important to create an eco-system around technology tools and partners that talk to each other,” says Iyer.?

Investing in shipping technology can enhance your operations by optimizing routes, comparing carrier rates, and managing costs efficiently.?

Technology can help retailers test and optimize several strategies, including;

• Route optimization: By utilizing real-time data and AI, retailers can adjust their shipping plans to save money and increase efficiency by optimizing shipping routes.
• Real-time rate shopping: Rate comparison tools automatically select the most cost-effective carrier for each shipment by scanning multiple carriers' rates and services, ensuring the best option based on your criteria.
• Predictive analysis: Advanced shipping platforms can predict future shipping volumes and costs, enabling you to adjust your strategy proactively. This allows you to capitalize on discounted rates and avoid surge pricing.?

4. Improve your inventory visibility to consolidate orders and reduce the number of shipments

Technology enables online sellers to visualize highly actionable data across multiple business areas.?

“Visibility across the board is just so critical, even when having a conversation, because we have to be able to see it to start to make sense of it,” says Nolting.?

Zooming in on the controllable factors inside the warehouse and shipping management function creates opportunities to make more sound decisions about how items are picked, packed, and shipped and how these movements are communicated to the customer.

If you're doing things like kits and bundles or multi-piece shipments, communication is an essential part of the process," says Iyer. It's as simple as that. It's an innovation that'll reduce errors and give a better consumer experience."

5. Automate the order processing workflow, from incoming orders to label creation

Data is important but can be overwhelming. Automating data collection and the processes it triggers, based on carefully considered workflows, ensures that everything happens at the right time and that the best possible outcome for your business and the consumer's experience is achieved.

You can use automation to perform the following tasks:

• Batch processing: Batch process orders with similar shipping criteria to print labels, generate packing slips, and update tracking information simultaneously.
• Carrier integration: Implement direct integrations with carriers to transmit order information, print shipping labels, schedule pickups, and track shipments directly from your ecommerce platform or shipping software.
• Returns management: Simplify the returns process with solutions that enable customers to print return labels and initiate returns, reducing costs and improving inventory turnaround.
• Order processing: Automate the order processing workflow from incoming orders to label creation, reducing manual errors and streamlining the shipping process.

Ready to take control?

Now is the time to rethink your shipping strategies and make a powerful impact on?your profitability. Together, Linnworks and ShipStation offer a comprehensive Commerce Operations solution that can help you optimize your shipping processes and save money. Request a demo or contact us today to learn more!

And before you go, don't forget to hit 'Subscribe' at the top of the page or 'Follow' below. Next time we'll be explaining diving into 11 essential consumer trends you need to know. Until then, take care. ??.