For most Magento merchants, shipping has become both a marketing tool and a growing part of their expenses. Free shipping has become a fairly common offer merchants make, that puts more pressure on your bottom line. Giant retailers like Amazon and Walmart get great deals from carriers like Fedex, DHL and UPS and others, so how do you compete on shipping costs? We’ll chip in with our top eCommerce shipping tips that are so good you’ll be kicking yourself for not knowing about them! Plus, we’ll show you how to get refunds from the carriers using 71lbs, which is especially important when it comes to cutting shipping costs.
Get a Discount from the Carrier!
Believe it or not, only 50% of companies get discounted shipping from carriers. Discounts start at 25% and beyond, so it’s worth the effort for an ecommerce merchant. 3 ways to get a discount:
1. Association Programs – To begin with, if you’re a member of the National Federation of Independent Businesses, for example, you can get a 26% discount on express shipping.
2. Negotiate Directly with Carrier – Tell Fedex you’re going to start shipping with UPS. They would rather have 90% of something than 100% of nothing.
3. Prepaid shipping from carriers – Finally, this eliminates some backend charges like fuel surcharges. The USPS has several flat rate shipping boxes that cost the same regardless of weight.
3 eCommerce Shipping Tips for Saving $$$
There are a bunch of other ways to cut shipping costs without cutting customer service. To start with:
1. Offer generic shipping methods like ‘Ground Shipping’. Then pick the carrier with the lowest cost. Since most customers don’t care which carrier delivers it, seems like you should pocket the difference.
2. Offer other delivery options, like 2 pm delivery the next day. Most people who want it the next day don’t need it at 9 am. They’d rather save 25% on shipping and get it in the afternoon.
3. Set up an online account. Most carriers offer better rates if you set up your account online.
4. Use Address Verification on your checkout. Get an extension for your Magento site that will validate the address against the UPS and/or USPS database of addresses. This will save the $15 chargebacks for having incomplete/invalid addresses customers enter.
Get Automated Refunds for Late Delivery using 71lbs
Finally, we recently found 71lbs and we were pretty excited. It is really a no brainer. It’s easy to set up an account and begin saving money. Finally, it’s another step you can take to drive your shipping costs down.
Here’s what they do: Using their automated system, they check UPS, Fedex and DHL systems for shipments that were delivered late. When a shipment is late, you’re entitled to a full refund of that shipping charge. Their system automatically applies for the refund from the carrier. You do nothing, they take half the savings, you get half the savings. It’s that simple, probably the best deal you’ll find today. Typically 4-6% of shipments are late. So if you’re spending $10,000 a year on shipping, you’ll get about $250 back in your pocket. Furthermore, there are no setup or monthly fees.
15 Minute Set Up
There are just 2 simple steps:
1. Set up an account, click here. It’s a simple form, about 10 fields depending on the carrier(s) you use.
2. Install the free Magento extension. This extension will show you the refunds you’re receiving. We’re also happy to install the extension free. If you’d like us to do that, just give us a call or send the form on our Contact Us page.
5 Key Insights for Magento eCommerce Shipping Merchants