Cut your postage costs and keep your customers coming back with this easy six-step postage strategy.
Postage and shipping might not be the sexiest aspect of your ecommerce business, but it is one of the most important.
Offering your customers fast, reliable and cost-effective package delivery will help you build your competitive advantage and boost your credibility as the positive customer reviews pile up.
However, solving the postage puzzle is easier said than done. That’s why you need to set a postage strategy that governs everything from how you label and pack products, to setting surcharges and getting the best price for shipping.
Get it right and you’ll cut your postage costs and keep your customers coming back. Get it wrong and watch your postage costs quickly spiral out of control.
Follow these six steps to create a successful postage strategy:
1. Get the best quote
Don’t tie the success of your postage strategy to a single shipping company. Most shipping companies tend to be really strong in one area, such as shipping large items, but fall flat in another area, like expensive deliveries to rural areas.
So it makes sense to play to the strength of each shipping company. To do this, and ensure you’re getting the best deal on every package you send, it’s vital to refer to multiple quotes from several different shipping companies.
This, you may think, would take way too much time. And you’d be right, if not for the rise of shipping aggregators that do all the work for you in seconds. Transdirect, for example, provides instant online quotes from a wide range of leading courier and freight services.
2. Charge the right price
Setting the right pricing strategy can make or break your ecommerce business. However, when it comes to choosing to offer free delivery, flat-fee postage, or variable-rate shipping, there are pros and cons of each to consider.
Offer free shipping and your customers will love you, but your profit margins may take a fatal blow. Charge a flat-fee postal rate to ease the process for your customers, but you’ll get hit with fluctuating delivery costs. Or provide variable-rate shipping to protect your profits, but run the risk of your customers abandoning their shopping carts when they strike unexpected delivery costs.
The answer? Free shipping is best if you sell at high margins with enough room to build the cost of shipping into the overall price of your product. Flat-fee postage is great if you ship the same or similar package sizes to regular destinations, which avoids dealing with major fluctuations in delivery costs. And variable-rate shipping is the way to go if you operate on low margins, have a wide product catalogue, or ship heavy items.
3. Make quoting easy – and accurate
A constant sticking point for ecommerce entrepreneurs is how to provide instant, accurate shipping quotes to their customers without sending them on a wild goose chase to external websites.
To solve this, work with shipping companies to incorporate shipping calculators that integrate with your eBay, Shopify or custom ecommerce platform to provide, instant, real-time postage quotes.
This will ensure your customers get the best deal, and you don’t get caught short covering inaccurate shipping quotes.
4. Consider insurance and tracking
Purchasing postage insurance and tracking functionality may add slightly to your shipping costs, however both can save you money – and customers – in the long run.
If you sell high-value items, then postage insurance is a must to cover you against the cost of replacing lost or damaged items. And package tracking will stop you having to unnecessarily resend slow-arriving items while keeping your customers updated on the delivery status of their order.
5. Rethink your packaging
Your packaging is the first physical interaction your customers have with your brand, so it’s important to make an impact with packaging that is an extension of your product.
However, packaging needs to be more than just pretty. Shipping companies charge based on package dimensions and weight. That means you need to optimise your packaging to cut postage costs. Or in other words, smaller and lighter packages equal cheaper postage.
Achieving that means fitting your box size to your product. Over-sized boxes waste space and result in higher postage costs. Also consider your packing materials. Over-using these can also unnecessarily add to the weight – and postage cost – of your package.
6. Master your labelling
Don’t waste time writing your shipping labels by hand or unnecessarily re-entering shipping information to print labels. Rather, most shipping companies allow you to print pre-filled shipping labels straight from your customer portal.
And consider investing in a thermal label printer that uses adhesive paper. This will save you even more time, help get your items ready for pick-up much faster, and make your packages more attractive.
Postage and shipping may not be the most glamorous part of your ecommerce business, however setting a successful postage strategy will help you cut your postage costs and provide better delivery service to your customers.
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