how-to-make-ecommerce-shipping-profitable-in-2020

How To Make eCommerce Shipping Profitable in 2021?

eCommerce Shipping
Household kitchen appliances and home electronics in boxes . E-c

To extend the growth of your business, time, and again you need to look for ways to select cost-effective methods and options. Shipping can be a niche where businesses end up overspending. Shipping costs cutting through improved methods of shipping is the need of the hour. Given the current situation, one needs to upscale its techniques in order to deliver quick and in a seamless manner. Hence, we have brought together a few ways in which you can make eCommerce shipping profitable in 2021.

A Profitable Shipping Solution

eCommerce Shipping

Business owners are not aware of the different strategies that they can put into practice to make shipping profitable. Here are a few strategies listed below:

Have structured negotiations with multiple carriers

Parcel boxes in cargo cart, delivery service

Carrier label fees include the majority of your shipping costs. It makes sense to get the most feasible deal from your carriers. Most businesses that sell online have negotiated deals with their top-most carriers. Most people are unaware that they can actually have negotiations with their carrier service. A well-negotiated contract can only be established if you have the complete knowledge of your shipping profile.

 How do you go about with this?

Start with understanding the math behind the true costing of your package. You may crack a brilliant deal on paper, but it often comes with a minimum charge per package. If your orders are smaller and lighter, you will be paying more than the necessary amount. In simple words, the minimum charge per package is higher than what if you would ideally pay if not minimum chargers were set.

Next, understand the exact shipping needs of your business. The deal may offer deep discounts and expedited shipping service. Signing up for such a deal will not make sense if you do not actually need such services.

Lastly, carriers are always on the lookout to carry for reliable sources that will give them a repeated business, they are always willing to negotiate deals with reputable businesses. The most ideal way to go about with negotiation is if it is structured. Analyze your shipping profile, understand your needs, and create a formal request or proposal for carriers. There are third party negotiators and consultants who carry forward this task for you. They examine your shipping history and negotiate on your behalf.

Negotiating with your carrier service is a tested way to reduce your shipping cost but there are certain things that you have to keep in mind.

  1. As contracts are drawn up monthly or yearly, you lose the ability to avail offers that other carrier services have to offer.
  2. If your shipping catalog changes, your shipping needs may change as well. The negotiated rates for the old weights and sizes will be baseless now. 
  3. If your carrier doesn’t live up to its word and gets sloppy with your packages, a few unhappy customers can affect your business.

Persuade suppliers to use your shipping account

Smiling entrepreneur working from home, chatting with suppliers

Most sellers get inbound shipments from their suppliers for the replenishment of their inventory and to fulfill direct orders. Generally, suppliers invoice you the transportation costs separately. If your suppliers also use your shipping account, it lets you take advantage of the negotiated discounted rates and also increases your shipping volume.

Additional benefits that come with this strategy

  • It increases your shipping spend so that you can negotiate better volume rates.
  • You can receive your discounted rates for inbound shipments as well
  • Your suppliers have a lesser tendency of marking up transportation costs on their invoices

Intelligently set minimum order value

eCommerce Shipping

Delivering low-cost items for free may make you feel the pinch of losing profits. By compelling your customers to make a bigger purchase, you can make up for the shipping cost. Customers tend to add more items to their cart just to qualify for free shipping. So, setting a minimum order value intelligently has it’s merits.

However, there is a very fine line between setting up a minimum order value and losing out on potential customers. You need to find the right balance to increase total sales. Hence an eCommerce shipping profitable solution.

Advantages of having an ideal minimum order value are

  • It spread the shipping cost across multiple items, which results in a higher margin per item.
  • A typical customer ends up spending more every time he/she buys from your website.

Make use association discounts

eCommerce Shipping Solution

Shipping discounts are a perk offered by various trade organizations. Shipping carriers have established relationships with many professional associations. While carriers don’t really advertise the associations that they offer deep discounts to, you can always try your luck and see if your business is eligible to qualify.

Building a relationship with carriers through a professional association has its perks. It saves the time and effort that you would take to build a relationship with the carrier directly, especially if yours is a young company. Thus, helping you to build an eCommerce shipping profitable solution.

What you need to keep a check of?

  • You may not be a member of the association forever. Therefore, building a direct relationship is ideal for a longer period. 
  • Sometimes paying the membership fees and dealing with other associational commitments just for discounts, may not be worth it. 

Maximize ground shipping usage

Shipping Usage

Most shoppers are always willing to wait for a longer time for free delivery. Offer a “no rush” delivery option so that customers can opt to wait for a little longer for free shipping. Ground shipping is the cheapest and most cost-effective method of transportation. If you give your customers that option, they are most likely to choose the free shipping. Indeed! an eCommerce shipping profitable solution in 2021.


Which are a few companies that offer ground shipping?

  1. USPS Parcel Post
  2. UPS Ground
  3. FedEx Home
  4. FedEx Ground

In short, shipping need not be a cash sink., you need to be smart about the little things that could be advantageous for your business. You also need to look at the drawback of the different strategies that you can use to save up money. This is important so that you don’t end up spending more money in the process of saving money and making shipping profitable for yourself.

Making shipping profitable is possible with a reliable shipping partner. Hence, Dash101, not just a shipping but a business partner to help you bring solutions to all your shipping needs. Whether its reduced RTOs or easy shipping across 27000+ pin codes across India, we cover it all. Efficient shipping and overall customer experience are what we look forward to for your business and make it a profitable one in 2020.

WEEKLY NEWSLETTER

Before you go, don't forget to subscribe to our blog.

Our confirmation email includes link to download our app.