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Small eCommerce Companies: Dealing with Variable Shipping Costs

Let’s be honest, Amazon is a logistics shipping company. On some level all eCommerce companies, big or small, are logistics shipping companies. Companies find themselves in a balancing act between profitability and satisfying customers, when deciding which shipping carrier to use and shipping costs.

Small eCommerce companies must decide quickly whether to use the postal service, a shipping carrier, or local courier, and that shipping method will vary depending on what is being shipped, or where it is being sent (distance and delivery commitment made online).

Carriers like USPS and FedEx calculate eCommerce shipping rates based on destination and origin, the weight and dimensions of a package, and the shipping time. Because FedEx and UPS offer 100 percent money-back guarantee on shipping costs if the delivery package is late, it represents a kind of “insurance” for small eCommerce companies, but often at a high cost.

When WarehouseOS® is implemented, it involves a strategy for online shipping methodologies by examining the options and picking the best one to fit customers’ needs. An eCommerce shipping strategy avoids the panic many small eCommerce owners experience. There is a real possibility of losing money or all profit margin on products if shipping fails to meet customer expectations.

WarehouseOS® apps address the important aspects of an eCommerce shipping strategy, including delivery method (carrier), available countries, tracking, and packaging. If free shipping is offered, the shipping strategy becomes more vital to company success.

Real-time tablet-based apps allow small eCommerce companies to streamline shipping processes, until they are a simple, logical, and profit-centric operation. For new small eCommerce companies, WarehouseOS® helps customers find a reliable shipping method and test eCommerce shipping calculator before launching an online store; even companies just a few months into their operation reduce the “trial and error” experiences which often impact early customers.

WarehouseOS has embedded data tables which delineate the rates based on the weight or subtotal of each order, so you can charge for shipping based on the weight of a delivery or provide bulk order discounts. Shipping freight allows small eCommerce companies to set individual rates and conditions per product — one product might have free shipping, another might have different rates based on the delivery location.

If products are valuable or fragile, customers may want to consider including insurance in shipping costs. The rate will increase, but peace of mind comes at a cost (and could be a profit-center).

The adaptability of solutions like WarehouseOS® consider all the variables in eCommerce shipping costs: destination, speed, weight, dimensions of the box, fuel surcharges, and discounts. Rarely is the solution “right” the first time. Evaluating the first 100 shipments will allow for price adjustments which can then be sustained one quarter at a time.