8 Easy Tips to Reduce Your Ecommerce Fulfilment Costs

October 9, 2019 eCommerce TipsEntrepreneurs

In ecommerce business, attracting and retaining customers is essential. While purchasing online keep on growing by double digits annually, consumers are now very selective with their purchasing decisions. This is why buyers need to be conscious about their ecommerce fulfilment costs.

According to a study, about 42 percent of shoppers abandoned their purchase after seeing the shipping costs. Once they see the additional expenses it takes to deliver the item to their home, they lose interest in buying the product. The desire for the product is no longer worth the additional expense.

Furthermore, reducing your ecommerce fulfilment costs will help decrease the shipping cost and encourage buyers to shop. In this post, we will provide you with some easy tips to help reduce your ecommerce fulfilment costs.

Negotiate With Carriers

Every carrier hates to lose customers. They are always looking to gain more business. . Major carriers have representatives all over the country who have authority to negotiate rates base on your volume of shipping. So you can check around for the best supplier with the lowest cost. The more you ship, the lower your cost should be.

Package Item Properly

A few things matter when it comes to packaging, such as dimensional weight. Size matters and packaging orders in proper size boxes is vital to keeping shipping costs as low as possible. Avoid using your own packaging, so you don’t incur additional fees related to an unusual box size.

Shop Around for Supplies

Big brand names can negotiate good offers and make it seem like you are saving a fair penny, but you might want to look around for better offers. One of those offers would come in the form of a fulfilment centre.

When you partner with a fulfilment centre who has made the investment and has all the equipment needed readily available in their facility for packaging and distribution, it may be a better route for your business.

Know Your Suppliers

Ask your suppliers to ship your raw products to you on your account. When you pay your shippers directly, you add to your volume of business for potential discounts, plus you avoid any extra charges your shippers may slip on top of the shipping.

Outsource Orders to Third-Party Logistics Companies

Outsourcing your order fulfilment to a third-party logistics (3PL) company could help you achieve all these savings and more. 3PL companies also save your business money in other areas that contribute to your overall profit margin. They reduce packaging costs with their higher volume and greater purchasing power. They can take charge of your inventory management, implement best practices based on previous experience and reduce overhead costs

Fulfilment companies bundle all their clients’ shipping into one giant account and therefore negotiate better deals on shipping rates than you would be able to reach on your own. You can ask your suppliers to ship your inbound inventory on your 3PL partner’s shipper number.

Negotiate Rates Annually

Brands that ship a significant over 100 pounds a day should be able to contract with major carriers to negotiate discounted shipping rates on an annual basis. Fulfilment centres have the ability to do this across carriers – with savings of up to 50 percent – since they are shipping products for numerous brands and can leverage their buying power. In addition, most fulfilment providers offer six or more different ship methods for small parcels – giving companies the best possible model each and every time.

Start with Customer Service

What are the requirements of your online shoppers regarding the fulfilment and delivery process? Not all consumers insist on one or two-day shipping, provided they have a clear understanding of the timeframe in which their package is expected to arrive and can track orders. Brands who end up “over servicing” consumers with rapid turn times risk wasting money as well as delivering a poor brand experience when attention to detail is rushed.

Reduce the Impact of Order Returns

Giving Shoppers the ability to return their products helps you improve customer engagement and be perceived as a customer-centric brand or retailer. Even though getting a lot of return packages can be a nightmare for any business as they inflate operational costs without generating any incomes. The best thing to do would be to try to automate as many return steps as possible, from the re-entry of the product in the inventory to the refund of the order.

Data Management and Accessibility

Another thing you should be mindful of is data management and accessibility. Effective data management will go a long way in reducing your ecommerce fulfilment costs. You can achieve this in two ways:

Leverage Integration Solutions

To fulfil orders quickly, you need great accessibility to all areas of your business. That means having an easy access to all your data at anytime, and in real time is key to your business success but meeting customer’s expectations and to fulfil their orders, you need to implement various platforms such as Website, Shopping cart, Inventory control system, Warehouse management system, Accounting system, CRM, etc.

These systems do store similar information revolving around your products, their costs and prices, their availability, and your customers. Your accounting software will also store the list of your products, their selling prices, the costs at which you have purchased them from your vendors and your company on hand quantities.

Maintaining a fragmented set of data containers and making sure that at all times they are in sync is a real challenge and a costly one. Furthermore, maintaining fragmentation in your systems leads to increased order fulfilment time, and partially informed business decisions. Increased order fulfilment time may lead to customer frustration which in turn may lead to poor sales and eventually business failure.

Understand the Cost for Each Order/ Cost per Order

The increased fulfilment time is rarely linked to the fact that you are enhancing the quality of the products you have sold, or that you are creating on the fly an incredible packaging that will leave your customer speechless when he will receive his ordered products. It is rather linked to the fact that your various systems are not connected and therefore, you spend an incredible amount of time, inputting the same data, reviewing it and comparing it, on different screens of different applications over and over again.

To better understand your cost per order, make an in-depth inventory of all the tasks that need to take place, from the moment a new online order is placed on your website and, the moment the order is received by your customer.

There you have it! Above are some tips to help reduce your ecommerce fulfilment costs. Reducing your ecommerce fulfilment system is essential to reducing the overall shipping or running cost of your ecommerce business. With the tips above, you can reduce the ecommerce fulfilment costs.

Contact us today at Fulfillman. We provide a wide range of services including Global Fulfillment, China Sourcing, Drop Shipping, Third Party Logistics, and lots more. Our trusted experts will be happy to speak with you and provide suitable answers to your questions and concerns. A fantastic experience awaits you.