The rise of eCommerce, dropshipping and other online retail formats has sprung from great strides in internet connectivity, and online shopping technologies. These days, hosting and running an online store costs next to nothing. Payments are largely secure, and transaction costs are minuscule.
Thus, it’s not hard to see why many brick and mortar stores are beginning to establish an online presence, and thousands of internet entrepreneurs are looking to eCommerce as their first venture.
With so much going for eCommerce, are there really any drawbacks?
One kink that the eCommerce industry has yet to iron out are delivery costs. Yes, you still deal in physical items. And yes, you still need to physically deliver those goods. This costs money!
Low barriers to entry have also squeezed profit margins for many online retailers. Couple that with the fact that delivery costs have remained fairly stable and you’ll see how many online business models can quickly become untenable. For those that do survive, they’re barely kept afloat by razor thin margins!
So how can an online business owner gain an edge. The key is to make the most of “boring”, “easy-to-miss” micro advantages, especially in your logistics and delivery arms. In this article, we will discuss 3 easy ways to cut the costs of delivery without compromising on service. These tips are discussed in a UK context, but can be applied to any business around the world.
1. Consider using carrier packaging (or at least make your packaging “efficient”)
Logistics is an area where physical dimensions and time taken for each task is formulated down to a tee. Therefore, most carriers in the UK require that you follow some sort of size regulations.
Therefore, expect to be charged extra dimensional fees if your parcel’s packaging goes over the set size regulations. You can easily avoid these costs if you use the carriers’ specific packaging. The carrier is under no obligation to let you know that you’re being charged extra. So it’s always good to analyse your invoices and work out if your packaging is really cost efficient.
Obviously, there are pros and cons to doing this so you’ll need to weigh them up before making a decision. On the one hand, you’ll know the packaging is strong, professional and it won’t cost you extra. On the other hand, using your own packaging adds a personal touch and enables you to better advertise your business.
If you don’t want to use the carrier packaging, you’ll just need to ensure you weigh the parcels correctly and use minimum packaging to avoid dimensional fees.
2. Compare your options
On personal finance sites like this one, there is one piece of sage advice that will get your far in life:
Whether you’re looking for a bargain on groceries, the lowest interest rates on a mortgage or the most economical delivery options for your business – it simply pays to shop around.
There are hundreds of different couriers to choose from, which has led to serious competition on prices. By comparing the different couriers on a site like Parcel2Go you can find the cheapest deals from the best-known couriers; guaranteeing affordability as well as a high-quality service.
You’ll be surprised just how much you can save by comparing the different carriers on offer. There’s also the potential to negotiate better costs too if you plan on sending parcels in bulk on a regular basis.
3. Send parcels in bulk
Sending parcels in bulk can work out way cheaper than sending them individually. Obviously as a small business, there will be times when it isn’t possible to send in bulk, but when you can you should definitely take advantage of it.
Couriers often offer lower costs if you place bulk orders so you could save quite a lot of money using this tip alone.
Again, it’s a fine balancing act. Ask yourself, how far can you extend your turn around time (e.g. 3 days delivery to 5 days delivery) in order to collate enough orders to enjoy bulk pricing. The key here is to experiment. Test. Test. Test!
Overall, there are many ways to cut costs on delivery in the UK, but the 3 above are going to save you the biggest amount. You don’t need to compromise quality service for cost, you just need to know where to look in order to save money.