The peak season is rapidly approaching for many eCommerce stores. With it, comes a surge in returns. Whether you like it or not, it’s more important than ever that you offer your customers an easy, seamless returns process – otherwise, you’ll lose them to a brand that does. So, keep reading, and the 3PL team will tell you how to optimise your reverse logistics process…

What is reverse logistics?

If you’re relatively new to the world of logistics, then you may not be familiar with the term ‘reverse logistics’.

Reverse logistics essentially refers to the process of moving goods from customers back to the retailers from which they have bought them.

In other words – reverse logistics simply refers to the process of handling and processing returns.

The reverse logistics process usually follows these steps:

1. The customer decides to initiate a return – usually via an online portal, email, or phone call to the original retailer.
2. If the retailer agrees to the return of the item – this can take multiple forms, from the customer arranging postage and packaging themselves, the retailer arranging postage and packaging, or the use of drop-off points, return lockers, or brick and mortar locations.
3. The return is processed and assessed by the retailer.
4. The goods are then either recycled/disposed of, or returned to the retailer’s inventory for sale once again.

Why does reverse logistics matter?

We’re not resorting to hyperbole when we say that reverse logistics is more important than ever.

Today, consumers expect to be able to return their purchases in a way which is hassle-free, easy, and at no expense to themselves.

Not only that, but consumers are returning purchases more frequently. According to research conducted by Shopify, around a quarter of all online shoppers return 5% and 15% of the items they buy.

But, not all retail segments face the same level of returns. Below, we’ve listed the retail that segments that have the highest levels of returns:

1. Apparel (e.g. clothing and accessories) – 12.2%.
2. Housewares – 11.5%.
3. Footwear – 9.1%.
4. Beauty – 4.3%.
5. Hard goods (e.g. appliances) – 3.8%.

Not only are consumers returning their purchases at a higher rate, but they are expecting retailers to be far more lenient and accepting of returns than in years past.

For example, consider the following statistics:

• 58% of consumers want a hassle-free ‘no questions asked’ returns policy from the brands they shop with.
• 79% of consumers expect free shipping on returns.
• 67% of shoppers check the returns page of an online store before committing to a purchase.
• 47% of consumers want an easy-to-print return label.

Whilst these stats may seem daunting, they offer a major opportunity for eCommerce stores that take reverse logistics seriously.

How to optimise your returns and reverse logistics process

If you want to stand out in the crowded world of eCommerce – particularly during peak season – then optimising your returns process is a sure-fire way of achieving this.

Below, the 3PL team has set out their top seven tips to ensure that your reverse logistics process is as customer friendly as possible.

1. Figure out why returns happen

What if you could prevent returns from happening in the first place? Both you, and your customers, would be happier!

According to research by Shopify, the top reason for returns is that items don’t fit as expected. Another major reason is that the ordered items aren’t as described.

If you can figure out the main reasons why your brand receives returns, you can take actions to remedy the root issue and reduce the number of returns occurring in future.

The easiest way to gather this information is to ask the reason for return during the returns process. So, when a customer initiates a return – be it via your online portal, by email, or by phone – remember to always ask why they are returning the item.

You’ll gather valuable insights that will not only reduce the volume of returns you have to process – but your customers will be happier, too. They’ll be getting the item they want and expect, first time!

2. Have a clear returns policy

Miscommunication is at the root of many bad customer service experiences.

So, make sure you have a crystal clear returns policy.

Set out your returns policy in simple, easy-to-understand language (ditch the legalese!).

With many consumers checking return policies before making a purchase, having a clear returns policy will not only reduce the number of returns you receive, but will actually help you sell more items in the first place!

In addition to setting out your returns policy in simple language, you should also set out your returns process. That way, customers won’t have any nasty surprises when it comes to making a return. They’ll know the process that you follow to complete a return.

3. Provide return labels

If you operate in a retail segment that has particularly high rates of returns such as clothing, you can save you and your customer time, stress, and money, by providing a pre-printed return label with every label.

Sure, you will incur a slightly higher cost as a result of doing this, but you’ll make the returns experience incredibly convenient for your customers. What’s more, you’ll make your in-house returns process more efficient, as you’ll be able to process and re-inventory items much more quickly.

4. Use reusable packaging

In a similar vein to providing return labels, you should consider packing your orders in robust, reusable packaging.

If you want to make your returns process as convenient as possible for your customers, then using reusable packaging will make their lives as easy as possible.

Why? Because, when it’s time for them to make a return, they can simply use the existing packaging and won’t have to go out and buy a new box/package.

5. Communicate, communicate, communicate

When many people make a return, they’re keen to make an alternative purchase (for example, they’ll want to buy an alternative item of clothing that’s of the correct size).

As such, you can optimise your reverse logistics process by providing plenty of communication during every stage of a return.

If you are able to inform customers about the status of their return – and when they’ll receive a refund – they are much more likely to shop with you again in the future.

6. Optimise your returns processing

The faster you can process returns, the quicker you can get those items back into your inventory and recoup the cost of the refund.

Make sure that your returns processing team is fully-trained and able to identify items which can be passed back into inventory, and those items that need to be recycled or disposed of.

7. Outsource your returns process

The most effective way to optimise your reverse logistics is to outsource it!

Think of it this way – you’re an expert when it comes to your products – but are you a logistics expert?!

We thought not!

Just as you source professionals to carry out jobs on your plumbing and electrics, it makes sense to source logistics professionals to take care of your reverse logistics on your behalf.

These reverse logistics professionals (called 3PLs, or third-party logistics providers), specialise in processing returns, and as such, have highly efficient and cost-effective processes for doing so.

Why not let them process your returns in the most efficient way possible?

Outsource your reverse logistics to 3PL today

3PL is one of the UK’s leading providers of returns processing on behalf of major eCommerce brands.

If you’d like to find out more about what’s involved in outsourcing your returns processing, speak to a member of the 3PL team today!

Speak to 3PL about your reverse logistics today

For more eCommerce fulfilment, logistics and other advice, read the 3PL blog…

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If you feel like competition for new customers is fiercer than ever, you’d be right. That means you can’t simply provide an excellent product. You’ve got to provide an amazing post-purchase experience to your customers too. Keep on reading, and 3PL will tell you how to do exactly that!

Why does the post-purchase experience matter?

Surely it’s enough to provide an incredible product at the best possible price?!

Not anymore.

Whilst that would have been sufficient to win and retain customers in the past, consumer expectations have changed.

Today, consumers expect exceptional levels of communication, easy returns processes, personalisation, rewards for being loyal and more.

In other words, consumers don’t simply want to be abandoned once they’ve made a purchase from you.

The value of customer retention

Is it really worth going above and beyond once a customer has made a purchase from you?

Absolutely!

By creating a fantastic post-purchase customer experience, you’ll greatly enhance the likelihood of retaining that customer and securing further purchases from them in the future.

In fact, to drive home how important a good post-purchase experience, and by extension, customer retention is, let’s take a look at some facts:

• Increasing retention rates by as little as 5% could increase your profits by as much as 25%.
• The probability of selling to an existing customer is 14% higher compared to the probability of selling to a new customer.
• Almost 40% of consumers have said they would stop shopping with a brand entirely if they had a bad post-purchase experience with them.

It’s not just about retention, either. Consider this; 77% of customers are willing to recommend a brand to a friend. So, a great post-purchase experience can help you win new customers as well as retain existing ones.

What’s more, a study conducted earlier this year by eCommerce software company Metapack found that an unbelievable 93% of consumers have had a bad post-purchase experience during the last 12 months.

This provides an incredible opportunity for brands that do focus on creating a great post-purchase experience for their customers.

How to improve your post-purchase customer experience

Okay, so we’ve highlighted how important improving your post-purchase customer experience is. But, how do you go about doing this? The 3PL team has provided their top tips below.

Say thank you

This may seem like a blindingly obvious point – but, that’s perhaps why it is so often overlooked.

Simply say thank you!

Whether it takes the form of an order confirmation email or a card placed in with the order itself, saying thank you makes a big difference! It shows you’re not taking the customer for granted.

Personalise!

Nobody likes being referred to as a number. So, be sure to personalise your communications and post-purchase marketing efforts.

This can be as simple as using the customer’s name in communications, to providing personalised product recommendations in future marketing emails. By using a customer’s name, you’ll be forging a more personal connection and building loyalty.

Reward loyalty

Talking of loyalty, if you’re serious about creating a great post-purchase experience and retaining customers, then you should reward their loyalty!

Whether it’s a discount code for their next purchase, VIP access to a discounted sales event, or exclusive first access to sought-after products, you’re far more likely to retain customers if you offer them rewards for their loyalty.

Surprise your customers with treats!

Related closely to the above point about rewarding loyalty, you should also consider surprising returning customers with treats!

The best way to do this is to offer a free gift at checkout. This makes the shopping experience far more rewarding and fulfilling and is a tactic which is being successfully deployed by brands such as Getir.

Satisfaction surveys

Consumers like to have their voices heard. So, allow them to fill out a satisfaction survey following their purchase.

Not only will this show that you value the customer’s opinion, but it’s a fantastic way of securing valuable feedback and insights that’ll allow you to improve your post-purchase experience.

Provide easy access to customer service

If something does go wrong – perhaps the item has arrived damaged, or not arrived at all – it’s important that your customers are able to speak to you quickly and easily.

They don’t want to spend ages clicking through your website and not finding any help. They don’t want to send an email and have to wait a week for a reply. They want it sorted now!

So, provide quick and easy access to real human beings who can fix your customers’ problems. And, if you think that contact centres are too expensive for your brand, then think again.

Provide how-to guides

If you sell products which require assembly or take a bit of getting used to regarding their operation, then you can massively improve the post-purchase experience by providing how-to guides.

Providing simple, easy-to-understand guides can help your customers better enjoy their purchases, as well as reducing the number of returns you receive from frustrated customers.

There are a number of ways you can provide these how-to guides, from written blogs through to video tutorials or infographics.

Flexible delivery options

Everybody leads busy lives these days. So, one of the biggest things you can do to improve your customers’ post-purchase experience is to provide personalised delivery options.

Whether a customer wants to collect their order from a delivery locker, have it delivered to their home on a specific date, or pick up their order from a brick-and-mortar location, you should be providing them with as many delivery options as possible.

Be clear about returns

Make your returns policy clear, easy to understand, and visible on your website. This not only reduces customer anxiety concerning returns, but it also shows that you’re transparent and not just focused on making as many sales as possible.

Given that, according to a survey conducted by Shopify, ‘a quarter of all consumers return between 5% and 15% of the items they buy online’, it’s important to be clear about the scenarios in which you will, and won’t, allow returns.

Improve your customers’ post-purchase experience with 3PL

We know that dealing with returns, customer support requests and other parts of the post-purchase journey can be complex, time-consuming, and costly.

That’s why 3PL is here to take care of those things for you!

We can help you create the best possible post-purchase experience for your customers, dealing with returns, customer service enquiries, and more!

 

Speak to 3PL about improving your customers’ post-purchase experience today

For more eCommerce fulfilment, customer service and other advice, read the 3PL blog…

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The peak selling season for many eCommerce stores is rapidly approaching. And, with it, the busiest time of year for returns too. If you want to be better prepared to deal with these returns – and reduce your costs associated with them – then keep reading.

Why peak season returns are important

With leading bank Citi predicting that UK inflation rates could hit 18% by early 2023, it’s more important than ever that you not only handle returns correctly but that you do so in a way that saves you money.

Incorrectly handling returns during peak season could have a significant impact on your eCommerce store’s profitability.

Not only can a clear, transparent returns process save you money, but it can also improve customer loyalty – something which is going to be crucial should the economy take a further turn for the worst.

How to reduce the costs of your peak season returns

With those points in mind, let’s look at some ways in which you can reduce the costs associated with your peak season returns.

Avoid returns altogether

This isn’t necessarily going to be suitable for all types of eCommerce stores, however some retailers are now opting to avoid returns altogether – instead, allowing customers to keep the item in question.

This is a strategy which mainly lends itself to retailers who sell lower-value items or fast moving consumer goods. In these scenarios, the cost of the return can be higher than the value of the item itself.

Not only does this remove the need to deal with returns altogether, but it can also help build customer loyalty.

Encourage in-store drop offs

If you have brick and mortar locations in addition to your online store, then one of the most effective ways you can reduce the costs associated with peak season returns is to encourage in-store drop offs.

Not only does this BORIS (Buy Online Return In Store) returns strategy reduce costs associated with logistics and shipping, but in fact many customers actually prefer to return their items to a physical location.

According to a study by shipping provider UPS, 45% of Europeans prefer to return items in person to a brick and mortar store.

Use pre-printed return labels

With around 30% of purchases made during the peak season being returned, it makes sense to plan ahead and include pre-printed return labels within order packages.

Not only does this make the returns process far easier for the customer – thus encouraging customer loyalty – but it can help you to reduce costs by pre-selecting the most cost-efficient shipping service based on the customer’s location.

Using pre-printed returns labels can also speed things up once the package arrives back at your warehouse. By adding relevant information to the return label, you and your team will be able to more efficiently process the return back into your inventory.

Deliver parcels on time

This may seem like a no brainer, but when it comes to the peak season, people are almost always buying presents for a particular date.

If your shipping provider is unable to deliver parcels ahead of those dates, then you’re going to experience a flurry of returns – and their associated costs.

After all, who needs Christmas presents after Christmas?!

You can preempt any delivery issues by using shipping providers that use tracking software, meaning you can spot the early warning signs of delivery issues. Based on those tracking updates, you and your customer service team can communicate with customers and try and resolve any delays.

For example, perhaps the customer would be willing to collect their parcel from a storage locker instead? Or the product could be sent from a different distribution centre in order to arrive on time.

Optimise your packaging

The peak selling season sees a truly vast number of parcels and packages being handled by shipping providers.

This means that during peak periods, your packages are potentially going to be spending more time in transit, going through more stops along the way, more handling by busy delivery drivers and more moving and sorting in general.

As a result, the chances of damage to packages is much higher during the peak period.

Naturally, damaged packages are not only going to be viewed poorly by customers who receive them, but they’re much more likely to result in returns – and with that, higher costs for you.

You can reduce these costs and returns by ensuring that packages sent out during the peak period are fit for purpose. For example, if you’re experiencing a level of damage-related returns for products which are shipped in padded envelopes, it may make sense to send these items in boxes instead.

Whilst optimising your packaging in this way may lead to some increased costs for packaging materials, these costs are going to pale in comparison to dealing with returns and damaged products.

Lengthen your returns timeframe

One way in which you can reduce the costs associated with peak season returns is to make sure these returns aren’t made during the peak season!

Let us explain…

By extending the amount of time that customers have to make returns during the peak season, you can reduce the burden on your returns processing team.

You’ll effectively be spreading out your returns into the quieter post-peak period.

Ordinarily, if you stuck to your standard returns period, you’d find you have a huge number of returns to deal with during an already busy period. In many instances, you may have to take on additional temporary staff to deal with these returns.

Lengthening your returns timeframe eliminates the need to scale up manpower, thereby saving you money.

Outsource your returns handling

If you want to truly unlock savings regarding your returns, then it can make sense to outsource your returns handling.

Third-party logistics companies are focused on handling returns in the most efficient way – meaning they can reduce the cost of your returns significantly.

Specialists like 3PL are adept at handling returns for multiple major eCommerce brands and because they deal with returns at high volumes, they benefit from economies of scale – which are passed on to you.

Speak to 3PL about your peak season returns today

For more eCommerce returns, fulfilment and logistics advice, read the 3PL blog…

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As an eCommerce store, one of the worst things that can happen is running out of stock. Not only will you lose sales, but running out of stock can damage your reputation, SEO and more. If you want to ensure this never happens to you, read 3PL’s guide to managing your stock levels effectively now…

Why is it important to manage your stock levels?

Aside from the reasons outlined above, there are numerous reasons that effective stock or inventory management is important.

Not only will effective inventory management ensure you always maintain stock of popular and fast-selling products, but it can also prevent you from having too many items in stock, thus incurring storage costs.

Having too much inventory can also mean that you have more capital tied up than you can afford, which can result in inventory becoming outdated and unsellable and more. It can also result in you requiring more warehouse space than you need; again, reducing the profitability of your operations.

So, whether it’s saving you from having too much or too little stock, effective inventory management is important.

How to determine the optimum stock levels for your eCommerce business

Okay, so we’ve seen how important good management of stock levels is. But, how do you go about actually doing it? What does optimum stock or inventory management look like?

Well, there are a number of ways of determining the optimum stock levels for eCommerce stores that we’ve detailed below.

Understand production lead times

By understanding production lead times you can make better decisions regarding when items of inventory need to be re-ordered.

For example, if you know that some of your items of inventory take several weeks to be produced, then you’ll be able to factor this into your inventory reordering schedule.

In addition to the amount of time it takes for your items of inventory to be produced, you should also consider related factors such as the amount of time it takes for those items to be shipped from the factory to your warehouse, any shutdowns that the factory may make (e.g. for holidays) and how it long it takes for you to process and store new items of inventory.

Safety stock

Safety stock refers to additional inventory that you set aside for unexpected circumstances. It effectively acts as a reserve in case you receive a sudden surge in orders, or experience a significant delay in receiving new inventory.

So, it can be helpful to ensure you always have some safety stock in your inventory – the trick is to ensure you have the right amount of safety stock.

To calculate the right volume of safety stock to keep in your inventory you should take into account the maximum daily sales of an item, its maximum lead time, its average daily sales, and the average lead time in receiving new stock.

Use demand forecasting

One of the most important things you can do to ensure you maintain optimum stock levels is to use demand forecasting.

Demand forecasting allows you to look ahead and anticipate which particular items within your inventory are going to be popular, which items may be slow sellers and more. From there, you can make better decisions regarding your inventory management.

There are a number of different types of demand forecasting which can be useful for eCommerce retailers including economy-based forecasting and time-based forecasting.

Guide – to find out more, read our guide to demand forecasting.

The best techniques for managing your eCommerce stock levels effectively

Now that we’ve examined how you can determine what your optimum stock levels should be, let’s take a look at some best practices that’ll help you manage your eCommerce inventory in general

Audit your inventory regularly

If you don’t actually know what items you’ve got in your inventory, then it can be impossible to manage your stock at optimum levels.

There are a number of ways in which you can audit your stock levels, but one of the simplest ways to do so is rolling stock takes, where stock takes are carried out on a regular basis.

Whilst they do involve more work than traditional year-end stock takes, they do provide you with up-to-date visibility of your inventory and any associated issues.

Create a contingency plan

How would you cope if one of your key suppliers went out of business? What if the production quality of your items suddenly dropped drastically? What would you do if material shortages in a particular location meant you had to change your supplier at short notice?

The answers to all of these questions and more should be included in a contingency plan.

By creating a contingency plan you’ll be better able to deal with any major issues and find alternative solutions quickly. After all, failure to have a contingency plan in place can throw your inventory management efforts into chaos…

Build solid relationships with suppliers

Related to the above point, you should try and build solid relationships with your suppliers.

Doing so will not only mean you’ll be given advance notice of any potential supply issues, but you’ll be able to work collaboratively with them on things like product improvement, product innovation, and more.

Aside from avoiding problems, building close relationships with suppliers can also bring benefits. For example, if you’re a long-term valued customer you may be able to access volume buying discounts, be the first to access new products and be able to set up better creditor terms.

Use an inventory management system

With the right type of inventory management software, it’s possible to gain a highly-accurate view of your current inventory, as well as automating many tasks (such as product reorder points) to not improve not only improve the accuracy of your stock management, but make it more efficient too.

Outsource your inventory management

If you really want to make the management of your stock levels as efficient and effective as possible, then it can be a good idea to outsource it to a specialist.

Companies such as 3PL can manage your inventory on your behalf, providing you with a digital dashboard with real-time visibility of your inventory.

Not only can outsourcing your inventory management to a third-party be more efficient, but it can also allow you to cut or reduce costs on things like warehousing space and inventory staff.

Outsource your inventory management to 3PL today

Do you want to manage your stock levels effectively, whilst saving time and money? Then consider outsourcing your inventory management to 3PL.

Our award-winning inventory management services are used by eCommerce companies big and small alike.

Speak to 3PL about outsourcing your inventory management now

For more eCommerce inventory management, fulfilment and logistics advice, read the 3PL blog…

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Regardless of what your eCommerce store sells, it’s likely that you have a peak season; a time of the year when you make the bulk of your sales. So, it’s vital that you’re as prepared as possible for this period. The 3PL team has provided their top 10 tips to help you do just that, and be as prepared as possible for your peak season, below…

What is peak season planning?

Before we delve into our top 10 tips, let’s define exactly what we mean by the term ‘peak season planning’.

Peak season planning refers to the process of gearing up your eCommerce store’s operations in readiness for your busiest sales period(s) of the year.

It usually involves a deep dive into your current operations, looking in detail at everything from the technical health of your website through to the speed, efficiency and accuracy of your fulfilment operations.

The core aim of peak season planning is to identify weaknesses in your operations – especially when order volumes and activity will increase – and set out actions to remedy them.

When are the main peak seasons for eCommerce stores?

Whilst peak seasons will vary depending on what eCommerce stores sell –  a store selling holiday clothing is going to have its peak in the summer, whilst a store selling eCards is going to have its peak at Christmas – there are some peak selling seasons that are common to the majority of eCommerce businesses.

As we’ve written previously, these peak seasons for eCommerce stores can include:

• Black Friday.
• Cyber Monday.
• Christmas Day.
• Amazon Prime Day.
• Region and country-specific peak dates such as Click Frenzy (Australia) and AliBaba Singles’ Day (China).

The top 10 tips to get your eCommerce store ready for your peak season

Whilst you may be reading this many months before your peak sales season, it’s never too early to start preparing for peak. So, read the 10 tips below and start thinking about implementing them across your operations today!

1. Make use of historical data

If you’ve been running your eCommerce store for several years, then you’ll (hopefully) have a wealth of historical data at your disposal.

Sure, it’s not possible to entirely predict what your forthcoming peak season will look like exactly, but your historical data should help you to identify common trends.

For example, you should be able to identify product lines which are popular year after year. As a result, you can make sure you have sufficient stock of these items in your inventory in readiness for the peak season.

2. Ensure your website is responsive

By this, we mean that your website is able to effectively adapt to a range of different screen sizes – especially mobile.

Gone are the days when shoppers stuck to desktop PCs. In fact, today, according to one piece of recent research, 40% of all online peak season purchases are made via smartphone.

In other words, you really can’t afford for your website to function poorly on mobile – or else you could be missing out on a huge percentage of potential sales!

3. Invest in Conversion Rate Optimisation (CRO)

It’s all very well having a website that looks good on all kinds of devices, but if it’s difficult to use and the checkout process is slow and cumbersome, that’ll cost you sales too.

Because of this, we recommend that you invest in Conversion Rate Optimisation (CRO). CRO is the practice of increasing the percentage of visitors to your website to take a desired action. In the case of eCommerce stores, this is placing an order.

A good CRO specialist will be able to identify the various snags and faults on your site which are causing people not to place an order. These snags can be anything from overly complicated checkout processes, to slow page loading times.

4. Gear up your marketing

You’re probably marketing your store all-year-round, but when it comes to the peak season, you really need to up your efforts.

Because there are so many retailers vying for the attention of online consumers during peak times, you need to make sure that you really stand out.

So, be sure to review your marketing strategy. Make sure that you’ve created detailed personas of your target customers. Think about which platforms and channels they use when they’re online. Consider keeping some budget aside so that you can spend more on targeted ads during your peak season.

5. Perfect your customer service

With so many eCommerce stores vying for business (it’s estimated that there are more than 12 million eCommerce stores across the globe), it’s essential that you have nailed your customer service operations.

If a customer isn’t happy with your service, it’s easier than ever for them to shop with a competitor instead.

So, ensure that your customer service, from handling pre-purchase queries to dealing with complaints, are absolutely on-point ahead of your peak season.

6. Ensure your inventory management system is up to scratch

Do you know what’s in your inventory at any one time? Do you have automatic reorder points set up for popular items? If you can’t say yes to those questions, then you need to review the way you manage your inventory.

One of the worst things that can happen during your peak season is running out of stock.

By using a good-quality inventory management system, you can avoid this issue.

7. Offer a personalised service

With up to 80% of shoppers saying that they’re more likely to make a purchase from an eCommerce store that offers personalised service, it’s important that you take this into account ahead of your peak season.

By making use of cookies, data from third-party platforms and customer data platforms, you can undertake marketing efforts such as personalised emails, personal product recommendations and cross-sells, and special offers tailored to an individual’s wants and/or needs.

8. Consider scaling up your team

If you’re expecting a particularly busy peak season, then it can help to hire additional members of staff (even if it’s only on a temporary basis) to ensure that important departments like customer service and fulfilment have sufficient capacity.

If you are going to do this though, ensure that temp staff are hired well in advance of your peak season and given detailed, in-depth training. This will ensure they are ready and fully-prepared to handle their roles and responsibilities during what is likely going to be a hectic and stressful period.

9. Consider offering fast, free shipping

More and more online shoppers are now expecting their orders to include free shipping. Thanks to the likes of Amazon and others, they’re also expecting their orders to arrive rapidly.

Whilst free shipping can entail additional costs, it can be possible to make it profitable by factoring it into the price of your goods, or by encouraging upsells and cross-sells (which can increase the margin you’re making on an individual order).

10. Outsource your fulfilment

Handling fulfilment in-house can be challenging even during relatively quiet periods. But, during peak season, tackling fulfilment can become an all-consuming task, often with people from other departments being drafted in to help pick and pack orders.

This is hardly an ideal scenario, and can lead to other, important, parts of your business operations suffering.

By outsourcing your fulfilment to a dedicated third-party logistics (3PL) company, you can rest assured that your fulfilment is being handled by dedicated, experienced fulfilment professionals, leaving you and your team to concentrate on your core business operations.

Outsource your eCommerce fulfilment to 3PL

If you’re thinking of outsourcing your eCommerce fulfilment ahead of your peak season, then speak to 3PL today.

As one of the UK’s leading third-party logistics companies, 3PL can handle your fulfilment from beginning to end, providing a truly turnkey solution.

From storing your inventory, to picking and packing orders, through to arranging shipping, 3PL can provide you with award-winning fulfilment services. Don’t just take our word for it though, we’ve got many happy eCommerce customers who can attest to the quality of our fulfilment services!

Speak to 3PL about outsourcing your fulfilment ahead of your peak season now

For more eCommerce fulfilment, logistics and shipping advice, read the 3PL blog… 

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Shipping costs are on the rise. Whether you’re securing supplies from overseas, or sending out orders to customers, you’ve no doubt noticed that your shipping bill is getting higher and higher. That’s why you should keep reading, as the 3PL team tells you everything you need to know about nailing your shipping basics and keeping costs in check…

Why are shipping costs rising?

As an owner of an eCommerce store or other type of business, you’re undoubtedly watching the continually rising cost of shipping with concern.

But, why is the cost of shipping rising so much at the moment?

As with any issue that spans the globe, there are multiple reasons, but speak to any logistics expert and they’ll usually say it’s mainly down to the following factors.

Shipping container shortage

As the Covid-19 lockdowns came into effect, demand for containers collapsed. This resulted in manufacturers of containers significantly dialling down production.

Since demand has recovered, container manufacturers have struggled to catch up, meaning that any available container has an exceptional surcharge attached to it.

Increased consumer demand

During the Covid-19 lockdowns we saw a massive increase in consumer demand for everything from furniture to clothing.

This huge increase in consumer demand meant that higher volumes of goods were being shipped. This huge consumer demand was not matched with a higher supply of vessels etc. As a result, shipping costs increased.

Oil price rises

Due to the collapse in demand for oil during the Covid-19 lockdowns (resulting in the cancellation of many new oil and gas projects), and the war in Ukraine, oil prices have skyrocketed and are now consistently over $100 a barrel.

The result of this is that couriers and shipping companies are facing more expensive fuel costs. They are increasingly passing on these rising fuel costs to customers in the form of higher shipping rates.

What are shipping costs?

Before we go any further, let’s just define exactly what we mean by the term ‘shipping costs’.

Shipping refers to the process of preparing and packing an order and then sending it to a customer. The means by which it reaches a customer will depend on the courier or shipping service that you choose, but common means of shipping include road transport (vans or lorries) or rail, and in the case of international shipping, container ships or aeroplanes.

Therefore shipping costs refer to any costs incurred throughout this process. This includes labour time, the cost of packaging, storage in inventory, and costs associated with transport and delivery.

If you’re using a courier to send your orders to customers, then you’ll usually be charged a single fee which covers transport and delivery, whilst the cost of packaging is covered by yourself.

How are shipping costs calculated?

With the above in mind, you might be wondering how shipping costs are calculated. Is it simply based on the inputs involved?

Not necessarily. Different shipping companies calculate shipping costs in different ways, however they generally involve one (or more) of the following variables.

Package weight

This is one of the biggest factors that influences shipping cost. As you would expect, the heavier an item, the more it’s going to cost to ship.

Some shipping companies and couriers will use a pricing technique called dimensional weight (also called DIM weight). This not only takes into account an item’s weight, but it’s dimensions too.

Package dimensions

So, what exactly is dimensional weight? This involves a shipping company calculating both the dimensions (the size and shape of a package) as well as its weight.

It’s calculated by multiplying the height, length and width of a package and then dividing it by a standard DIM divisor (this is a figure which represents cubic inches per pound). Different shipping companies use different DIM divisors.

Be aware that many shipping companies, like USPS, FedEx and UPS calculate their shipping charges based on whatever is higher – the package’s weight, or its dimensional weight.

Whichever of these is the higher, becomes the ‘billable weight’ for your shipment.

Shipping destination

Destination matters. If you’re only sending a package to the next town over, then this is going to cost you a lot less than sending a package to another country.

Many shipping companies use what are called ‘shipping zones’ to calculate their shipping rates. These zones can range from Zone 1 to Zone 8 and are calculated on where your package is being shipped from.

As a result, if you end up shipping a package across multiple shipping zones, then you’re likely going to end up with a higher shipping bill.

Value of contents

If you need to send out high-value items to customers, this can result in the overall cost of your shipment going up as a result of needing to insure the package.

Delivery speed

The faster you need to get a parcel to a customer, the more you’re going to pay in shipping rates.

If you decide to offer 1 or 2-day shipping to your customers, then you’re going to face higher shipping rates as the shipping company will have to use more elaborate, expensive ways of transporting your packages e.g. air freight.

How to reduce your shipping costs

As you can see, there are many variables that can affect the amount of money you pay for shipping. However, it’s not a lost cause! There are many things which you can do to reduce your overall shipping bill.

We’ve set out our top cost-saving tips below.

Weigh your packages

This seems like a no brainer, but you’d be surprised how many eCommerce companies miss this simple trick.

You should get your fulfilment team into the habit of weighing every package and making sure that it’s not absurdly heavy.

With shipping costs being as high as they are, it may actually cost you more to send very heavy items than what you actually make on them in profit!

If you find that you have very heavy items which don’t necessarily have huge profit margins, it may be better to sell them on a ‘customer collect’ basis, or allow customers to arrange their own delivery.

Check your packaging dimensions

As we’ve seen above, the dimensions of a package can play a big role in increasing the cost of shipping.

To save money, you should seek to rationalise your packaging dimensions. For example, are you sending everything out in the same size box? It may cost more to stock different size boxes, but in the long run you’ll save handsomely on shipping rates.

In addition to using boxes which are of a suitable size for each item, you should see if you can use custom packaging where possible. This will allow you to pack items as snugly as possible, with no wasted space which needs to be filled with packing material.

Use SIOC packaging

Another packaging-based trick you can try, is to use SIOC packaging.

SIOC (ships in own container) packaging isn’t necessarily suitable for all products, but can be a handy way of reducing the bulk of your package, as you are applying the shipping label directly to the product box.

Obviously, this means that the product box has to be robust enough to withstand the rigours of shipping.

So, if you have products which are in good quality boxes, it can make sense to ship them ‘as is’ rather than placing them in another box just to ship.

Purchase packaging in bulk

Whether it’s boxes or packing materials, you can save money by buying these items in bulk.

If you know that you’re going to have a consistent level of orders over the coming months, then you should be able to calculate the best bulk buying deal for your business.

Outsource your fulfilment

One of the best ways of reducing your shipping costs is to outsource your fulfilment to a third-party logistics provider (known as a 3PL).

The reasoning is as follows – because a 3PL is handling shipping for multiple companies at once, they are able to negotiate much cheaper shipping rates. Because they will generally be sending hundreds (or even thousands) of packages every week, shipping companies will essentially provide them with a bulk discount.

In short – 3PLs can negotiate far cheaper shipping rates than you’ll be able to do on your own.

Access cheaper shipping rates today with 3PL

If you want to access cheaper shipping rates and are considering outsourcing your fulfilment, then speak to 3PL today.

We’ve got many happy customers who rely on us to deliver the smoothest, most efficient fulfilment service with the most cost-effective shipping. If you’d like to join them, speak to us today!

Find out more about 3PL’s eCommerce Fulfilment services now

For more eCommerce shipping, logistics and fulfilment advice, read the 3PL blog…

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