Lowering International Shipping Costs in 2022
October 25, 2022
Managing international shipping costs in 2022: 5 best practices
Shipping costs can be one of the biggest expenses that retailers will encounter when trying to build a successful ecommerce brand. When you’re shipping orders internationally, this is amplified even further.
On top of worrying about taxes and duties, merchants end up spending considerable time and energy trying to access the cheapest shipping rates. In addition, the cost of international shipping often puts brands off from expanding into new regions, resulting in missed opportunities to grow your customer base and increase revenue.
In this post, we’re going to explore five ways that merchants can lower their international shipping costs in 2022.
DIM weight, also known as dimensional weight, refers to the standard method that carriers use to calculate shipping rates. Instead of just measuring the weight of a package, DIM weight also considers the size of what is being shipped. The higher the DIM weight, the more expensive shipping will be. How can you lower DIM weight?
By ensuring that you aren’t adding unnecessary bulk to your packages. For example, if you’re putting a small item inside a large box, you’re going to pay far more for shipping than necessary. So make sure that your packaging is sized appropriately for the items you’re shipping - or you’ll be paying a lot of money to ship air!
In the age of Amazon, free shipping has become an expectation rather than a perk. According to Shopkick, 94% of customers listed free shipping as the perk they wanted most while shopping online during the 2021 holiday season. This leaves smaller retailers between a rock and a hard place; shouldering the total cost of shipping means taking a loss on some orders while forcing consumers to pay can send cart abandonment rates sky-high.
But offering free shipping doesn’t have to be all or nothing. If brands play their cards right, they can reduce their shipping costs while also providing their customers with an incentive to spend more. Offer premium delivery options. 70% of consumers say they would be willing to pay extra for expedited delivery options.
Consider using economy speed for free shipping alongside one or two expedited shipping options to give your customers more choice and flexibility. Use a free shipping threshold. Implementing a minimum order value ensures that your business doesn’t end up taking a loss on smaller orders. Free shipping thresholds also help raise your Average Order Value (AOV) because customers will often put extra items in their cart in order to qualify. Offer a shipping program. The success of Amazon Prime is a classic example of how consumers are willing to pay upfront for shipping to minimize friction in the shopping experience. Consider launching a shipping program that incentivizes your customers to place more orders to lower their costs further.
While split shipments are sometimes unavoidable, it’s one of the biggest reasons a merchant’s shipping costs balloon out of control. When an order is divided into separate packages for transit, your shipping costs may double or triple while the revenue earned stays the same. This means frequent split shipments can result in losses due to increased fulfillment, packaging, and shipping costs. So, how can you prevent split shipments from becoming too frequent?
- Ensure your reorder point can accommodate longer lead times to avoid pulling inventory from another warehouse.
- Group products in the same facility that customers are likely to buy together e.g. footwear and socks.
- Offer customers the option of consolidating their order by shipping items to one warehouse for order fulfillment, which will cost less than residential delivery
If your business is regularly shipping parcels all over the world, it’s worth exploring whether flat-rate international shipping is a good option for your business. Flat-rate shipping is where shipping rates are determined by the size of the box or envelope prescribed by the carrier instead of DIM weight. The biggest advantage of flat-rate shipping is that it standardizes shipping costs for you and your customers. In addition, some shipping carriers, including USPS and FedEx, also supply their own packaging for flat-rate services, which helps to keep your associated costs down.
However, there are some drawbacks. Flat-rate services only accommodate packages up to a certain weight. If you’re paying to ship very lightweight items, you’re likely to end up paying more than you need to. It’s important to review your product range and determine whether flat-rate shipping will result in cost savings for your business.
Comparing carriers and looking for ways to shave dollars and cents off your shipping costs is incredibly time-consuming for retailers. It takes time away from managing other areas of your business and maximizing key growth opportunities, which can end up stifling your brand in the long term. Instead, it’s worth considering outsourcing fulfillment to an experienced ecommerce fulfillment provider who can use their advanced technological and physical infrastructure to lower your shipping costs:
Wholesale shipping rates
3PLs can leverage their large shipping volumes to obtain cheaper shipping rates with parcel carriers - meaning more cost-effective shipping for you and your customers.
A 3PL can equip your business with a powerful Warehouse Management System (WMS) that’s capable of assessing every order to determine the appropriate packaging required to ship products safely while also optimizing for cost. This lowers your shipping costs and creates less packaging waste. Multiple fulfillment locations. A 3PL with a network of facilities can assist you in choosing locations to store inventory that are close to your end customers. This means shorter distances for shipping orders, and faster, cheaper shipping than you can achieve with a single warehouse.
Global eCommerce is growing. Whiplash + Zonos allows retailers to reach every online shopper worldwide. Pairing Zonos’ scalable cross-border technology for landed cost with Whiplash’s best-in-class ecommerce shipment technology offers a smooth experience for international shoppers and retailers. Whiplash technology seamlessly picks, packs, and ships your orders from a variety of locations to anywhere in the world.
In addition, our SmartRate Selection tool enables merchants to compare shipping rates between carriers in real-time to create a shipping strategy that optimizes for both cost and speed. With a nationwide network of 18 different facilities close to major transport hubs, it’s never been easier to enhance the post-purchase experience.
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