3 recommendations to reduce your shipping costs

Author: Mauricio Zanotta, Order Management Consultant, Emakina.NL

Today’s customers expect free shipping. Whether they order from a webshop, marketplace, app or through an endless aisle kiosk in a store, their expectation is that the product will be delivered to the location of their choice free of charge. 

This creates a challenge for retailers – how to meet this expectation while keeping shipping costs under control? 

It starts with a mindset: analyse the shipping costs of your customer orders in the same way as you consider the profitability of the products you sell. 

Some recommendations:

1. Ship from the closest in-stock location to the customer

This is the most straightforward option: simply reduce the distance covered per delivery. Use your stores as distribution centres and deliver to your customers from the store that is closest to their preferred delivery location.

2. Ship from the warehouse

Warehouses have smooth picking, packing, and delivery processes. Personnel is dedicated to handling the shipping of orders and they do not have to deal with customers at the same time. On top of this, warehouses are usually located in a strategic location for distribution. Therefore, shipping from a warehouse may be the most cost-effective way to fulfil an order, even if there happens to be a store closer to the customer.

3. Take a look at your carrier pool

Offering different carriers gives the customer more options. But having more than one carrier means that you have to deal with more than one partner and divide the order volume between them. Consider whether you need multiple carriers or whether it is worthwhile to pare down the number of carriers you offer.

4. Incentivise pickup from stores or pickup points

Make it attractive for your customers to have their orders delivered to a pickup point or one of your stores – for example by offering them loyalty points or a discount on products bought in the store. 

Shipping to a pickup point is often cheaper than shipping to a customer’s house – and if the customer comes to your store to pick up an order, this is even better: perhaps the products were already available there and you didn’t have to move them at all, or you may be able to use your existing distribution channels. On top of this, you will have a customer visiting your store and interacting with a store employee, which gives you a chance to give them a better experience and maybe even make an upsell.

Want to know more about how an order management system can help you to give your customers the choice they expect? Contact Emma Dijkstra, Expert Lead Order Management at Emakina.NL.

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