Throughout the last 18 months, UPS and FEDEX have frequently increased their shipping rates and surcharges. These increases have greatly impacted companies’ profit margins, particularly ecommerce companies. FedEx recently imposed a 100% increase in residential delivery charges that will have a substantial impact on those who ship directly to consumers.
These effects will be felt even more significantly in the upcoming months. As you and your team begin planning and budgeting for another unprecedented holiday season, it’s time to ask yourself how you can meet your customers’ shipping demands without losing your entire profit margin.
Size your packaging to precise product dimensions. Excessively large boxes can end up increasing shipping costs unnecessarily. Make sure your packaging is as small as possible, and consider switching to envelopes or poly bags for smaller items.
Run an internal audit on your online shipping calculator. Is it making the proper adjustments in price based on weight and shipping destination? Is it taking into consideration the weight of the packaging? If it is short by even a few cents an order, your profits will suffer unnecessarily.
Ask about rate sharing. If you use a fulfillment service like The Dot, ask your representative about rate sharing; you might find they have negotiated special discounts for residential service fees, dimensional calculation fees and other accessorial fees.
Save with specialized services. Specialized services, such as FedEx OneRate, have no surcharges and offer a predictable flat rate based on the size of the package and often at an expedited service.
Consider using a regional carrier. Regional carriers are sometimes more cost effective, have high on-time delivery rates, fewer surcharges, later pickup times and deliver peak season consistency. They are particularly helpful for small ecommerce businesses managing their own fulfillment.
Is your business struggling to overcome fulfillment and distribution challenges? We can help! Request a call with a solutions specialist https://www.thedotcorp.com/contact/