E-commerce: How to Reduce Your Shipping Costs? (5 Tips)
19 April 2023
How can you reduce your shipping costs on your e-commerce site? Standing out by offering more affordable delivery options to attract customers is no longer optional. 60% of consumers who abandon their cart say that shipping fees make the total bill too high (Source: E-commerce Nation).
Shipping fees are significant not only for your customers but also for your business. They directly impact your growth and turnover. To offer lower shipping fees to your customers, you first need to reduce your company’s logistics costs.
Looking to increase your profitability? To save money while maintaining a satisfactory level of service quality? Here are 5 tips to reduce shipping costs on your e-commerce site.
Renegotiate with your provider
The first obvious tip is to renegotiate with your current provider!
If you work with a carrier or logistics company, you may be able to get better rates by negotiating with them. Don’t hesitate to discuss your goals and needs. And don’t hesitate to ask for discounts in exchange for your loyalty or higher volumes.
You can also compare offers from different providers to find the one that offers the best rates for your specific needs. Shipping costs can vary from one provider to another depending on several criteria: weight, volume, distance, and delivery speed.
Some providers offer lower rates for longer delivery times or for grouped shipments. By choosing the right delivery option for each shipment, you can make significant savings on your shipping costs. And therefore offer lower prices to your customers!
Choose co-transportation
Delivery has become a major issue for businesses. In this context, co-transportation can be an interesting solution to reduce your logistics costs. According to a study by Fevad, delivery costs represent on average the equivalent of 7% of the turnover of e-commerce sites in France. By choosing a solution like Cocolis, these costs can be reduced by up to 60%.
The principle of co-transportation, also known as collaborative delivery or parcel carpooling, is to have your parcels transported by optimising the available space of individuals or professionals who are driving with empty space. In France, more than 80% of French people are willing to transport parcels for others. The reason? To cover their fuel or toll costs! This practice offers an economical and ecological alternative to traditional carriers.
By using Cocolis, you offer your customers a new economical delivery service: up to 60% cheaper than standard delivery. It’s also eco-friendly, as each delivery made saves an average of 25kg of CO2.
Reduce your packaging
While packaging ensures product quality until it reaches your customers, it can have a significant impact on your shipping costs. Unsuitable packaging leads to additional shipping fees, especially for large items subject to volumetric pricing.
To reduce these costs, use just the right amount of boxes and materials to protect your products. Avoid standard packaging that requires excessive padding to fill empty space and increases shipping volume.
You can safely pack fragile items in a smaller box. Use bubble wrap and make sure to fit them well. The smaller the box, the less likely you are to pay a surcharge for volumetric weight. These small adjustments will have a direct impact on the shipping fees you offer your customers. To their great delight!
Use pick-up points
According to a FEVAD survey, 50% of orders placed on e-commerce sites are delivered to pick-up points. And for good reason: it is much cheaper to drop parcels at a pick-up point than to deliver them individually to each customer.
This delivery method helps reduce shipping costs by avoiding home delivery fees, representing savings for transport companies. It allows your customers to cut their bill by 30% compared to home delivery.
Pick-up point delivery also offers flexibility for customers, who can collect their parcels whenever they want, without having to worry about home delivery.
Better manage your supplies
Efficient stock management is a key element in reducing shipping costs. According to a study by the Institute of E-commerce, storage costs can account for up to 20% of a company’s costs. The more stock you have, the more you’ll pay for storage.
Implementing effective stock management processes can help minimise storage costs. To avoid these extra costs, it’s important to work with reliable suppliers to ensure regular and sufficient supply of goods.
According to a Harvard Business Review study, reducing stock levels by 20% can lead to a 10% reduction in transport costs. This reduction can therefore have a significant impact on the shipping costs you charge your customers.
In conclusion, it is essential for e-retailers to offer affordable delivery options to meet their customers’ expectations. Shipping fees can be a barrier for many consumers and can directly impact your company’s profitability. Analyse the different options available to you and choose those best suited to your specific needs. By offering affordable delivery options to your customers, you will increase your profitability while maintaining a satisfactory level of service quality.
