As an online seller of oversized goods, shipping large items to the buyer is one of your biggest expenses. Here's how you can reduce your costs.
Many online shoppers expect that shipping will be free, regardless of the item’s size or weight. If you want to be competitive, then you’re probably going to have to shoulder the cost of transportation yourself. When it comes to shipping large items, however, sellers have always had a difficult job trying to keep their costs down.
If the buyer is relatively local, then this may not be too bad. If your customer lives on the other side of the country, however, or maybe even the other side of the world, then that’s when things start to get a little more difficult. A lengthy expected arrival time is one of the biggest turn-offs for consumers, who have become used to the luxury of “next day delivery”.
When it comes to oversized items, this just simply isn’t realistic. It may take weeks, if not longer, to get that wardrobe to its destination. It’s also going to be expensive.
According to Temando’s 2017 report:
• 74% of customers will make an additional purchase from a retailer if the shipping experience is enjoyable.
• 50% of online shoppers will never shop with certain retailers because of a negative experience during the delivery stage.
On those products where your margins are small, the cost of delivery can make or break you. If you factor in the cost of returns as well, then it only takes a handful of dissatisfied customers to put a very different complexion on your profit and loss statements for the quarter.
You’re also potentially at the mercy of the customer with regards to the re-packaging of the item prior to its return. With every sale, you run the risk of being left high and dry with a large, damaged item taking up space in your warehouse.
We talked to a number of fulfillment specialists about how sellers can keep their costs down. Here’s what they advised.
ShippingEasy has provided us with this very useful guide to calculating an object’s dimensions, explaining how getting an accurate measurement can help you shop around for the best deal available.
“Shipping larger, bulkier items can be a bit tricky. Once you get beyond what most carriers consider to be a “normal-sized package” the relation to size and weight begins to change and further calculations are necessary. FedEx and UPS assess additional surcharges for oversized packages, and UPS just raised theirs by 30% earlier this year.
Dimensional Weight (DIM weight) is a term that retailers need to be aware of. This can be particularly detrimental for packages that are large or long, but don’t weigh much (think a tall lamp or lighter, unassembled patio furniture, for example). Rather than basing the shipping on the actual, physical weight, Dimension Weight takes the height, length, and width into account to assess a different shipping cost based on how much room the package takes up in a truck.
Each carrier has their own way of handling this. For USPS Priority Mail, there are a couple different approaches:
The balloon price applies to parcels that meet specific parameters:
• Addressed to Zones 1-4
• Weighs less than 20 lbs
• Exceeds 84-104" in girth
Packages fitting this description will be assessed at the 20 lb rate, per applicable zone.
Dimensional Price for other Low-Density Parcels
A dimensional price applies to other low-density parcels that meet these parameters:
• Addressed to Zones 5-9
• Exceeds 1 cubic foot (1,728 cubic inches)
Packages fitting this description will be assessed at the higher of these two rates:
• Actual Weight rate
• Dimensional Weight rate
To make this determination, USPS assigns a "dimensional weight" to each package. For these low-density shipments, USPS will determine if the actual-weight rate or if the dimensional-weight rate is higher. The higher of the two will be the postage price.
The UPS formula for measuring standard-shaped packages is as follows:
Length + 2x Width + 2x Height
• Step 1 Determining Length Measure the longest side of the package, rounding to the nearest inch. This is your length.
• Step 2 Determining Girth (2x Width + 2x Height)
• Measure the width of the package, rounding to the nearest inch. Multiply this number by 2.
• Measure the height of the package, rounding to the nearest inch. Multiply this number by 2.
• Add these two numbers together. This is your girth.
• Step 3 Add the length and the girth together. This is your package measurement.
• Step 4 Weigh the package to obtain its actual weight.
Once you’ve obtained the length, girth, and weight of your package, you need to know whether or not that exceeds the limitations set by UPS.
Below is the summary of those limitations:
• Packages can be up to 150 lbs
• Packages can be up to 165 inches in length and girth combined
• Packages can be up to 108 inches in length
• Packages with a large size-to-weight ratio (meaning they are light but large) require special pricing and dimensional weight calculations (use ShippingEasy’s free DIM weight calculator to help with this)
For rectangular parcels:
1. Measure the length, width, and height in inches. Round off each measurement to the nearest whole inch.
2. Multiply the length by the width by the height: L x W x H = Volume in Cubic Inches
3. If the result exceeds 1,728 cubic inches, divide the result by 194 and round up to the next whole number to determine the dimensional weight in pounds: (Volume in Cubic Inches)/194 = Dimensional Weight
For non-rectangular parcels:
1. Measure the length, width, and height in inches at their extreme dimensions. Round off each measurement to the nearest whole inch.
2. Multiply the length by the width by the height: L x W = Area
3. Multiply the result by an adjustment factor of 0.785: Area x 0.785 = Volume in Cubic Inches
4. If the final result exceeds 1,728 cubic inches, divide the result by 194 and round up to the next whole number to determine the dimensional weight in pounds: (Volume in Cubic Inches)/194 = Dimensional Weight
5. If the dimensional weight exceeds 70 pounds, the mailer pays the 70-pound price.
FedEx follows a similar formula for calculating Dimensional Weight to UPS. Both UPS and FedEx Dimensional Weight can be calculated domestically and internationally using a DIM Weight Calculator. A good shipping solution should allow you to enter your package dimensions and weights, then help you find the most cost-effective means of shipping those packages domestically or internationally without manually calculating, which leaves room for human error”.
Pay more now (to save money later)
Veeqo CEO Matt Warren advises sellers that “Shipping large items over long distances can be expensive and tricky, so it's important to minimize costs as much as you can. One of the best (and often little thought of) ways to do this is to guarantee as close to 100% as possible that the delivery goes down without a hitch the very first time. It may cost a little bit more up-front, but going for the cheapest option can result in items potentially being lost in transit or damaged. The cost of needing to arrange for long distance returns as well as shipping out a replacement could be far more significant than paying for a slightly more premium service, especially if this happens multiple times with large and expensive items.
This means making sure you're using a reliable courier with quality ratings, reviews and customer testimonials. Opening up a business account with several of these and integrating it with your shipping software can then enable you to view a range of the best quotes in one place from your set of reliable couriers every time you ship an item”.
Look for specialist couriers and choose the right packaging
The order management experts at Linnworks were adamant that choosing the right fulfillment partner needs to be a key part of your strategy. Here's what they said.
"When shipping bulkier items internationally, there are a couple of things you can do to keep costs down. The first is to start by making sure you’re using the most cost-effective courier service. Online retailers often see huge savings simply by using a service that specializes in shipping items of a certain type, in this case, larger items. You can compare the different courier services for yourself here.
You should ensure that you’re using the most appropriate packaging for the item. As we've seen above, courier prices will often be determined by dimensions as well as weight and if you’re using bigger boxes than necessary, you could be paying a lot more in shipping costs".
Reduce the number of returns
There’s no sure-fire way to stop protect your business against returns, but there are things you can do to reduce their frequency. According to a recent study, approximately 30% of products bought online are returned. The reasons for this are numerous and on occasion, there’s little that the seller could have done. However, one thing that businesses can do is improve the customer support experience. By increasing the speed and quality of your ticketing system you can establish a personal relationship with your consumer that makes it easier to negotiate an alternative to returning the item.
Keep your customer informed about the delivery status of their order with eDesk. Doing so will allow you to set realistic expectations for the customer and reduce the likelihood of dissatisfaction and complaints down the line.
eDesk is the leading helpdesk for online sellers, purpose-built to address the precise demands of e-commerce. Sign up for a no-hassle, 14-day free trial right now.