Normally, ecommerce shipping surcharges happen in Q4 in order for carriers to keep up with consumer demand. Since the outbreak of COVID-19, surcharges have been added to shipments earlier in the year. But, the shipping costs in Q4 are more expensive than they have been in the past. Some carriers aren’t even giving end dates to these surcharges.
Why then are postage rates and shipping costs on the rise? In part, it’s due to changes by the US postal service implemented at the height of the pandemic. Thanks to these changes, the post office is adding a $0.25 cost to any orders weighing up to 10 pounds, and as much as $5 more for packages weighing up to 70 pounds.
It’s Not Just the Post Office Raising Shipping Rates
Additionally, both FedEx and UPS are raising their own postage and shipping rates. In a press release issued in September 2021, FedEx Express, FedEx Ground, and FedEx Home Delivery shipping rates will effectively increase by 5.9% beginning January 3, 2022. UPS made a similar announcement in August 2021 regarding changes to their own UPS Ground service rates.
Naturally, as the shipping carriers increase shipping costs, brands will inevitably pass those costs onto their own customers. But for ecommerce brands, passing on those shipping costs to customers may have a negative effect on purchase completion rates.
First of All, What are Shipping Surcharges and Postage Fees?
Shipping surcharges are extra fees added to the cost of an item by the company arranging the delivery. Many companies label these surcharges as handling fees or service charges on official invoices or receipts.
In normal circumstances, these additional shipping surcharges are applied in Q4 to accommodate the higher volume of shipments throughout the holiday season. But COVID-19 caused a massive surge in demand for online orders, and companies applied many of these holiday surcharges as ongoing year-long fees.
Tips Ecommerce Brands Can Use to Save Shoppers Money
Prices and shipping costs are a large part of what encourage shoppers to do business with an ecommerce brand. It’s why so many ecommerce companies are fully transparent about fees, handling charges, and any other surcharges that may be included when delivering an item to a customer household.
To help improve customer satisfaction and improve retention rates, how ecommerce businesses lower delivery costs for customers? These are some best practices to help minimize the effects of higher shipping costs on your online customer shopping experiences.
Offer Gift Wrapping and Messaging Services to Customers
During the holiday season, it’s not uncommon for people to shop online for gifts. Usually, they’ll ship the order directly to their home to wrap the present and include a card. Then, they have to arrange to make another delivery to make sure the gifts arrive at the intended recipients home.
Eliminate the need of the second delivery by offering gift-wrapping services of your own. Not only does it save your customer time and money, it helps differentiate your ecommerce brand from your competitors.
By offering this service
- You streamline the entire gift delivery process for shoppers.
- Make their lives easier at a time when hectic holiday schedules leave little time to spare for things like gift wrapping.
Is this not a service you offer? Partner with a 3PL provider who can arrange gift wrapping and messaging services on your brand’s behalf.
Offer Free Shipping in Exchange for Greater Customer Engagement
Many companies are willing to offer free shipping in exchange for a minimum purchase value from shoppers. This is a great way to incentivize people to buy from your brand at a time of year when every possible saving counts in the average family home.
At the same time, you can differentiate your willingness to lower shipping costs by running a special social promotion. For example, encourage shoppers to screen capture a picture of the product they buy from your site. Then ask them to share it on their social media channels with a specific hashtag coined for the event. In exchange for this free marketing and advertising, your company can eliminate the shipping costs attached to the product purchase.
This is a win-win situation for both your ecommerce business and the families who buy from your brand. You get free publicity and they save a bundle on delivery costs!
- Build a vibrant online community.
- Increase your follower count.
- Expand your reach and awareness.
All at no additional cost to your company. This is why so many brands run social sharing contests. The benefits of social contests are definitely worth their merit.
Rely on a Mixture of Carriers to Deliver the Goods
Customer reviews and testimonials are more important for business growth and sustainability than ever before. According to market research, 88% of shoppers trust online reviews as much as in-person recommendations, and 86% say they will not buy from an online store with bad customer reviews.
Brands’ abilities to meet or exceed delivery promises are a big part of what inspires customers to write positive reviews. That’s why it’s important to ensure your order fulfillment partner helps keep your brand reputation intact.
Diversification is a term used to describe how products or services differ from other categories, or how brands differentiate themselves from the competition. As an ecommerce company, you should look at diversification as an opportunity to partner with more than one shipping company to fulfill your orders. If one company expects delays, you’re not beholden to those problems. Instead, you can use your other shipping partners to ensure deliveries arrive on time and in pristine condition for your customers.
Minimize Delivery Costs with 3PL Support
During the holiday season, speedy deliveries are of the utmost importance for families. It’s important that your supply chain system is in place to deliver on order fulfillment expectations to appease your most loyal customers.
It’s why so many ecommerce brands partner with third-party logistics providers to improve the logistics of shipping. 3PLs provide affordable, scalable solutions to ensure fast and simple order fulfillment by using localized warehouses and shipping facilities to arrange the deliveries. These services can help speed up deliveries, both local and global, while also keeping costs affordable.
3PLs also excel at building strategic, big picture visions for your delivery services. This accommodates pending changes in shipping services, anticipated rate hikes, new surcharges, and anything that can impact the operations of your business. Your 3PL partner can recommend the best course of action to adapt to any of these possible changes and keep your business operational without absorbing additional costs.
In the end, this is the best way to ensure customer satisfaction is maintained, orders are properly fulfilled, and your business has the opportunity to flourish in the post-pandemic world.
Need help getting your postage and shipping costs in line? Then get in touch with us at sales (at) owd (dot) com.ecomm