Guest post by Jose Li
Founder & CEO of 71lbs
What is the #1 source of pain felt by most e-commerce merchants? Shipping costs. We all need help reducing them. But how can the average merchant cut costs while FedEx and UPS keep increasing rates and the USPS threatens to close branches and slash personnel? Unless you ship at Amazon-level volumes, it can be difficult to gain leverage and cut a break with your shipping carriers.
Here is some good news: There are a number of things you can do to save on shipping. They all involve some investment in time and, to a certain degree, knowledge. Here are three you can implement today:
- Understand What You are Spending
Sounds simple, but when was the last time you looked closely at your carrier’s invoice? Did you REALLY understand it? Shipping invoices can be very difficult to follow, as carriers print various product codes and acronyms that are seldom used in daily business, and often carry mistakes that you end up paying.One useful metric to measure on a periodic basis is your ratio of sales vs. shipping spend. On average, we have seen e-commerce merchants spend 10% of their sales on shipping. If you are spending more, it may be worth exploring in more detail.
- Get a Refund
FedEx and UPS offer a money-back-guarantee for late deliveries – even if late by 60 seconds. Claims must be submitted within 15 days or they are gone forever. Many companies don’t take advantage of this policy as $2 billion dollars are left unclaimed every year. The policy covers overnight and ground service. Both come with guaranteed time commitments, which were promised to you when you paid for the shipments.
- Ask for A Discount
It’s a competitive marketplace and both FedEx and UPS want to keep their existing customers and gain more. Many merchants believe they have to ship extremely high volumes to qualify for a discount, but that’s not necessarily true. More than half of small businesses get zero discounts from their shipping provider. Let your carrier surprise you. You may get one just by asking.
As the saying goes, you don’t get what you deserve, you get what you negotiate.
Jose Li is Founder & CEO of 71lbs.com. He has 15 years of shipping, logistics, and e-commerce experience with Alibaba.com, Jamba Juice, and FedEx.