In online retail, it’s common knowledge that high eCommerce shipping costs or long delivery times cause most online shoppers to abandon their digital shopping carts and seek better deals elsewhere. Most online buyers expect delivery within two days, and they expect that service to be free. While eCommerce sellers bake those “free” shipping costs into the prices of the products, that strategy won’t work if shipping costs negatively impact the seller’s overall cost-competitiveness.
How Can a Fulfillment 3PL Keep eCommerce Shipping Costs Down?
The fulfillment operation plays a small but crucial role in negating consumer cart abandonment. A skilled fulfillment partner can take several steps to minimize eCommerce shipping costs to the point where retailers can reasonably keep shipping complimentary for the consumer. Some of these steps include:
1. Carrier partnerships
Affordable shipping is strictly a volume game – shippers that move very high parcel volumes tend to get better deals from carriers. While attaining those volumes may prove difficult for most mid-to-large eCommerce businesses, a fulfillment 3PL can leverage the total volume of all its customers to negotiate better rates. Developing relationships and negotiating deals with national and regional parcel carriers is standard practice for a quality fulfillment provider.
2. A national footprint
Generally speaking, shipping over short distances costs much less than long-distance shipping. Online sellers can locate inventory within a few hundred miles of most customers by using a fulfillment provider with a national fulfillment network. This practice keeps nearly all shipments within the first three shipping zones used by parcel carriers, resulting in significant reductions in total eCommerce shipping costs.
3. Optimizing packaging
Using the wrong size carton can inadvertently drive up the cost of shipping. Parcel carriers use a dimensional weight pricing model to determine the cost of shipping large boxes, so shipping small and lightweight items in oversized boxes adds up quickly – and unnecessarily. A fulfillment 3PL can manage this problem in multiple ways:
- Carrying boxes in a wide range of sizes to ensure suitable sizing for all products
- Customizing packaging specific to the product line
- Implementing polybags instead of boxes to reduce weight and dimensions
4. Presorting
Some eCommerce sellers choose to deliver truckloads of packages to parcel carriers, where they get unloaded, sorted, and shipped. However, since sorting gets built into the shipping rate for most parcel carriers, most businesses don’t realize they can save money by presorting packages themselves at the fulfillment center. An experienced 3PL knows to presort packages by zip code and deliver them to the parcel carrier in sorted batches. This practice may result in parcel carrier discounts of up to 8%.
5. Technology
A logistics partner invests in specialized technologies that will keep eCommerce shipping costs to a minimum. Examples of such technology investments include:
- A real-time warehouse management system (WMS) that can optimize orders and shipments
- Carton erectors and tape dispensers to speed parcels into the shipping pipeline
- Scanners to verify actual package weight and dimensional weight before shipping
- High-quality label and barcode printers that print clearly to avoid shipping errors
- Digital auditing capabilities for shipment records to challenge and defeat unexpected service fees/accessorial charges
The Other Cart Abandonment Facilitator: Shipping Speed
Aside from free shipping, online shoppers usually want their goods within two days. This expectation is due in large part to the standards established by Amazon over the past several years. Some of the tactics used above to cut costs also help packages move faster. For instance, a national fulfillment network facilitates two-day ground shipping while avoiding express service costs, whereas presorting and high-quality labeling help avoid destination errors during transit.
At Amware Fulfillment, our job is to make fulfillment as affordable as possible without sacrificing quality and service levels. We understand that our partners need eCommerce shipping costs to remain low so they can offer fast and free shipping to their customers and mitigate the risk of cart abandonment. To see how we can provide you with access to speedy and affordable order fulfillment services, contact us today.
