In order to be able to focus on a better way to manage inventory, online retailers have begun balancing air, ocean, truck and rail freight to be able to lock in the cheapest and most cost effective shipping methods. There are online retailers that choose to optimize their supply chain by lowering their overall costs to ship, of course depending on type of transportation, while also managing transit times to be able to meet inventory needs.
Cost of air freight compared to road freight
The most common and widely used transportation mode for product shipping is air freight. This is because of its short turnaround to increase stock. This type of transportation is usually used for small and fragile stock however it is also one of the more expensive ways to ship freight. Inter-modal freight like transportation by trucks and railroads is the least expensive shipment option and should be used when products are well in stock and large amounts of inventory are purchased in one particular area.
Expedited air and ocean cargo is shipped at very high speed and this form of transportation is best used when retailers must wait to be able to better understand which stock they should invest in. Keep in mind that air and expedited freight options have been more often used because of low inventory due to the weakened economy. Online retailers can save money while maintaining great customer satisfaction by selecting shipping methods that are due to particular inventory circumstances.
Offering your customers more shipping options
Consumers are more inclined to buy when they are offered more shipping options. They may choose to not make the purchase if they find that the shipping cost and the product cost exceed their intended price range. Another deterrent to making a purchase is if the product is not due to arrive at the time the consumer expects it to arrive. It is a fact that a consumer’s willingness to spend money on shipping depends on convenience and on how quickly they need the product.
It is a great help to consumers if they are offered different kinds of freight methods and they’ll be more likely to choose one because they are so tempted to purchase a certain product. In other words, when consumers feel a lot more confident and comfortable about selecting a shipping method they’re more likely to buy something thereby increasing the revenue of online retailers. Online retailers can generate more revenue by increasing the sales of items at a higher price point. Due to supply and demand holiday shoppers know to expect to spend more on particular holiday products so they are not likely to lose interest in buying certain items. It is the short time span that these holiday products are available which allows retailers to raise prices and also maintain a strong customer base. Online retailers can better manage inventory because these products are more expensive and they won’t tend to over or under stock. What happens when retailers raise prices is that at this time they can also reduce shipping costs for customers thereby giving them the opportunity to sell much larger and more expensive stock.
Calculating shipping costs
To make it easier to calculate costs, both consumers and retailers can download a freight shipping calculator online for free. As online retailers raise prices, they decrease the amount of money they spend on shipping and can then control inventory better. There are lots of different options for freight rate integration with an online shopping cart. Options are available to you no matter if you are an eBay seller, own a small online boutique or are the warehouse manager of a large enterprise in order to help you reduce the freight cost and/or draw in new buyers with lower upfront shipping costs.
Besides a freight rate shipping calculator there are also tiered options available that have been built for e businesses of different size and types. An open-source application programming interface or API is available and it can add value to your online business by leveraging the power of a third-party freight provider with your existing website. There is also a transportation management system or TMS which combines the attributes of an API with the complexity of a self-servicing freight shipping and logistics program.
Both of these products can be found online through most freight providers. Since there are literally hundreds upon thousands of various online stores you need to make yours stand out from the rest by offering something extra. One way to do this is by offering more customer service benefits to your online shoppers.
Ecommerce freight shipping rates
In most shopping carts ecommerce businesses can setup real-time ecommerce freight shipping rates so that it is possible for your customers to pay more or less exactly what you wind up paying to ship your products. Of course you have to keep in mind that there are always small discrepancies which can come up. In most cases however you can wind up breaking even between shipping charges which you collect and which you will have to pay to ship your freight. By using a real-time freight shipping rate you can gain much trust from your customers. Yes, this strategy does not have the same influential power that free shipping costs do, it is still an easy way to make sure that you aren’t taking on all of the shipping cost on your shoulders and still your customers are getting the best possible deal. See our other article on ‘Making free shipping pay over the holidays’ here.
One other option you may be interested in would be using oversized shipments. This way if you don’t want to give out a free shipping promotion should your freight happen to be heavy, bulky or awkwardly large then a less-than-truckload option is possible. You can also choose to give a flat rate for each and every freight package. This kind of a method when charging for shipping requires some preparation because you have to figure out your average cost of shipping the freight. By taking the time to do this you won’t be undercharging or overcharging your customers. Once you come to the right cost you’ll most likely be over or under the actual shipping cost just a little but in the end it will all even out. The most important thing about a flat rate shipping cost for ecommerce freight shipping it to figure out which flat rate works the best for you and you have to decide if you have to do it by order totals or weight ranges so you’ll have to do some testing. As a start you’ll have to find out the statistics on your particular products and the best possible ways to ship them in order to be able to make your most strategic decisions.