Postage costs can be one of the largest expenses facing Australian ecommerce businesses. If you offer free or flat-fee shipping, spiralling postage costs may be taking a significant bite out of your profit margin. And even if you’ve opted for variable-rate shipping, high postage costs passed on to your customers could price you out of the market.
The good news is that there is much you can do to take control of your shipping and send your postage costs hurtling downwards.
Here are six ways to reduce your postage costs in Australia:
1. Negotiate with shipping companies
Shipping companies want your business. Just like you, they operate in a highly competitive market and will do the best they can to win your business – especially if you’re a high-volume seller.
Put together a shortlist of your preferred shipping companies and take the time to speak to their local reps to find out exactly what they can offer you. They may be able to provide lower rates for high volume shipments, offer loyalty rewards for repeat business, or provide incentives programs to sweeten the deal. And remember, everything is negotiable.
2. Use a shipping aggregator
Online shipping aggregators gather instant quotes from multiple carriers for each shipment you want to send. They can often be configured to display the cheapest or fastest option for each delivery on each given day, so you can be confident that you’re getting the best deal on every individual package you send.
Many shipping aggregators can also be integrated into your ecommerce website so your customers simply enter their postcode to instantly receive the best delivery deal without having to leave their shopping cart.
3. Optimise your packaging
The size and weight of your package is the largest determining factor in the cost of its delivery. Ensure your box size fits snugly around your product –empty space is a waste of money. Also try to keep box sizes in line with carrier standards top avoid getting slapped with extra fees. Also pay attention to the packaging materials you use, and talk to your packaging suppliers about volume discounts. Getting a good deal on a bulk order of bubble wrap will help to keep your costs down.
4. Pre-pay for shipping
Some shipping companies offer pre-paid satchels for smaller items, generally up to 5kgs. If you’re a high volume seller of smaller items, it’s worth speaking to your shipping company to see if they offer bulk deals on pre-paid satchels. This not only helps to reduce your postage costs, but may also allow you to offer easy, flat-fee delivery on your most popular items.
However, keep in mind that prepaid shipping tends to only be best if you’re shipping products that closely fit the standard satchel size options. That is, if you’re using a 5kg prepaid satchel to ship a product that weights 4kg, you’re probably better off getting a custom quote.
5. Outsource your fulfilment process
Outsourcing your fulfilment process can help to cut down your postage costs if you’re a high-volume seller. Companies like Copak and Pikpak provide warehousing, packaging and shipping services to Australian ecommerce businesses.
However, this is can be a tricky approach at times. You’ll need to weigh your current fulfilment expenses against the rates a service provider can offer, and ensure you have enough room in your profit margin to pay any additional costs or surcharges associated with outsourcing your fulfilment.
6. Rethink your delivery timelines
What do your customers really want? Would they be happy to forgo next-day delivery if it meant paying less for postage? You’ll save significant money sending packages via road freight rather than on air express, so it could pay to reserve express delivery as a paid-for optional extra for customers who really need it.
In a survey by Shutl and Retail Week, 74 per cent of respondents said more control over delivery would encourage them to shop online more often. So putting the choice in your customers’ hands will ensure they get what they want while cutting down unnecessary express postage costs.
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