Whether you are retailing low-cost memory cards or bespoke jewellery, the competition your business faces from other online businesses is likely to be fierce.
In today’s mature e-commerce arena, in which more individuals and small businesses are entering the marketplace than ever before, it’s becoming increasingly essential to keep postage costs under control and pass savings on to decreasingly loyal prospects.
Studies show that postage and packaging fees are one of the primary concerns of online shoppers across all categories, so not only does decreasing your postage rates give you the oppourtunity to make a greater profit margin, any savings you are able to pass on to the customer could win you sales from price-sensitive consumers.
Here are our top-tips on how to reduce your postage costs to make more profit per sale, earn more customers and boost your business’ bottom line.
No, we’re not suggesting you deliberately make fewer sales! We’re talking about reducing both the weight and volume of your customer’s orders. Here’s how to cut down the footprint of your shipments and start saving money straight away.
Use smaller packaging
As you know, postage prices are mainly determined by the weight and volume of your parcels. While there isn’t much you can do to decrease the weight of the items you sell, you can at least make sure that your packaging isn’t adding too much to the volume of your shipments.
Many of us can recall an instance when a seemingly weightless parcel has arrived at our door, perhaps the size of a shoe box, only to contain nothing more than a memory card and a packing slip. Think of the costs associated with that level of inefficiency! Could your business save on postage costs by simply investing in a wider inventory of packing materials? Many could. This amusing Flickr group showcases some of the worst offenders of over-packaging. Think how much these businesses might save if they make their packaging more efficient.
Smaller packaging costs less, could qualify you for cheaper postage rates, and could save you valuable storage space. If some of the items you sell are very small, you might be able to package them efficiently enough to fit through a letterbox, saving your customers the hassle of having to be home for a delivery.
Get your measurements right
Postal carriers will add surcharges to your cost of pastage if your package turns out to be bigger than you told them at the time of booking.
It’s well worth investing in a tape measure and a set of suitable scales to make sure the cost of postage is always as expected. Knowing the exact specifications of what you are posting will also help you to make sure to select the optimal carrier for the size and weight of parcel that you are posting.
Reduce, reuse, recycle
As well as being ecologically sound, reducing, reusing and recycling packaging can help your business to cut down on postal charges.
The leaflets and packing slips that some businesses include with deliveries all cost money to print – costs that are often passed onto customers as part of their postage and packaging charges.
Brochures and catalogues increase the weight of packages considerably, so be sure to consider this postage expense when costing these types of marketing materials. Perhaps you can give customers the option to opt out of recieving brochure and the like. Some retailers I’ve purchased from regularly have sent a catalogue with each order, with all but the first ending up in the recycling bin. Can you make sure each customer only recieves catalogues once per edition?
Slow down on the bubblewrap
While it’s clearly essential to protect the items you are sending, sometimes business owners can be excessivly cautious and overdo it with the bubble-wrap and packing peanuts. Not only do these cost money, they add volume and weight, all of which pushes up those postage fees.
A minimal approach won’t only save you money on your packaging and postage costs, your customers may well be impressed that you aren’t as wasteful as some leading online retailers when it comes to packaging.
Get efficient with your dispatch operations
Do your dispatching in batches
It’s surprising how many people who are just starting out in e-commerce package their sales throughout the day, and soon find that it’s becoming a problematically time-consuming activity.
Time is money. While shipping in batches may not do much to reduce your postage prices, it’s time efficient and frees you up to manage your business. Instead of packing your sales up throughout the day, could you consolidate this task into an hour or two each day? Depending on the size of your business, this could significantly reduce the time cost of shipping operations and allow you to focus on growth.
Use air delivery only when necessary
Air postage is not cheap postage. It tends to cost a more than ground shipping, so for some businesses it’s worth giving your customers the option to save a few pounds on postage rates and wait for ground mail. Is it important to your customers to get their items as fast as possible, or is a low price more important in your niche?
Store your products closer to market
Do you send a lot of your items to a particular location? If so, perhaps it’s worth asking yourself if you could feasibly move your storage closer to your customer’s location. If possible, you may find that you are able to reduce the prices you are being charged for postage and reduce the prices you charge your customers.
Use online postage services (like ParcelBright!)
If you sell even a small volume of parcels each week, you could save money by using a service like ours here at ParcelBright. We aggregate the best offers from a wide pool of delivery companies and allow you to pick the one which best suits your needs. One shipping carrier might be cheapest for sending your video games to customers, for example, while another is cheaper for sending video games consoles.
Services like ParcelBright allow you to input the details of your package and compare prices from the whole range of postage providers. You can then make your selection based upon who has the best postage rates. Alternatively, you can select a provider based upon who offers a faster delivery time or desirable insurance options.
Hopefully these tips will help you to reduce your postage costs, run a more efficient business and improve your bottom line. Make sure to apply these ideas and use Parcel Bright to save money on your e-commerce business’ postage costs.