What’s one thing a startup online retailer should know when it comes to shipping customer orders?

Posted on: May 31st, 2011 by Landis Logistics No Comments

If you are a startup online retailer then you have a lot of things on your plate. From developing the website and choosing the ecommerce software for the site, to figuring out the best way to package and ship order from your online store and many things in between.

A lot of businesses would be surprised to know that, on average, the cost of order fulfillment whether it is done in-house or is outsourced will account for 4-5% of the total operating costs. Meanwhile, shipping costs will typically make up 10-15% of operating costs. The point is that in most cases the more focus an online retailer can put on driving shipping costs out of the process the greater impact the can have on being more efficient.

How can a startup spend less on shipping?

-Make sure all the options are being considered by looking at pricing from FedEx, UPS, and the USPS. Compare Ground services vs. Priority Mail and the other services. Never assume one service is always the best.

-Make sure the packaging is optimized for efficiency and less weight.

-If you have not considered it, look at outsourcing order fulfillment to a 3rd party that will pass on a discount with FedEx or UPS. Many times that order fulfillment cost will be more than offset by the savings realized by leveraging the fulfillment center’s volume discounts.

 

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