Welcome to the world of shipping in 2023! The landscape has been a wild ride in recent years, with ups and downs that have kept businesses on their toes. But before we take the plunge and explore the depths of the topic, let’s take a moment to review the current state of affairs.
One intriguing trend that has recently emerged is that customers are prioritizing free standard delivery over expedited shipping, as long as the items are actually in stock. In this article, we’ll delve into the reasons behind this shift and explore what it means for businesses in the ever-evolving world of shipping. So, buckle up and get ready for an exciting journey into the fascinating realm of shipping in 2023!
With delivery times now settling back into being more consistent, shoppers are now willing to wait a few extra days for their orders to arrive, as long as they see the magic words “free shipping” during checkout.
It’s no surprise that inflation continues to be a crucial factor for consumers and merchants, affecting the demand for these complimentary or reduced shipping fees. Consumers have come to accept that a few days’ wait for package delivery is reasonable, as long as items are available and shipping is free, or at least reasonably priced.
When making a purchase decision, numerous factors come into play, with shipping expenses carrying significant weight. Shipping costs are now one of the most important considerations for individuals when choosing where to shop.
Industry research has shown that if a brand’s shipping fees are excessive, more than half of buyers are less likely to do business with them. Remember, offering free or reduced shipping can make a big difference for your business.
It’s a common tale of modern-day shopping woes – we finally find that perfect item we’ve been coveting for ages, add it to our virtual cart with a victorious click, only to have our joy crushed by the $12.99 shipping fee. Forget that we had rationalized the expense of the item itself, which was already $200, that additional $12.99 is a deal-breaker. And so, we bid adieu to our beloved purchase, leaving it to languish in the purgatory of abandoned carts.
As we can see, In the current market, small costs at every step of the purchasing process add up and have implications for both the consumer and the merchant. Knowing your options and how to find the best rates, can directly impact your business’s bottom line.
Shipping Costs Impact Merchants Too
Reasonable shipping costs are not only a priority for consumers but also for merchants who aim to minimize these expenses. In fact, in 2023, a preferred approach for most businesses is to expand their operations while simultaneously reducing shipping costs, which is, of course, easier said than done. A way that this can be accomplished is with the right 3PL partner and the right shipping software solution.
In ecommerce, shipping is a critical part of the overall operations of a business. It is essential to make sure that products are delivered to customers promptly and efficiently, which is why shipping costs are a crucial consideration for businesses. However, beyond just the cost of shipping itself, there are additional expenses that come into play, such as label expenses.
Label expenses can significantly impact a company’s bottom line, especially for businesses that are processing a large volume of shipments. These expenses can include the cost of printing and purchasing labels, as well as the time and effort involved in managing the labeling process.
Over time, these costs can add up, eroding profit margins and making it challenging for businesses to maintain competitiveness and profitability.
To stay competitive in the ecommerce industry, it is essential to find ways to reduce these costs while maintaining quality and efficiency in the shipping process. One way to do this is by partnering with shipping solutions providers, such as ShipKey, that offer cost-effective label printing and management solutions, allowing businesses to focus on other important aspects of their operations. By reducing label expenses and optimizing shipping operations, businesses can improve their profitability and remain competitive in the ever-evolving ecommerce landscape.
Additionally, although buyers may express a willingness to purchase from smaller retailers, they still anticipate free delivery options. As much as consumers would like to support “the little guy”, the business with the best shipping rates usually wins in the end.
As a result, merchants must explore options for securing the most cost-effective shipping rates in order to remain competitive and profitable.
Label Costs Influence Which Carriers Merchants Use
As you can imagine, most merchants prioritize shipping rates when selecting carriers. By securing lower shipping costs, merchants can offer more attractive pricing to their customers.
Additionally, cost factors prominently into the carrier selection process because major US carriers generally deliver packages within the timeframe expected by consumers. Consequently, utilizing discounted shipping services can benefit both the merchant and the customer, ensuring satisfaction for all parties involved.
ShipKey offers significant shipping discounts to merchants, which can help them remain competitive even against their biggest competitors, regardless of their shipping volume. In addition, ShipKey includes many features that warehouses need to provide top-notch delivery.
Cutting label fees is not the only way for businesses to save money. Streamlining and automating fulfillment processes by using ShipKey can help save time and reduce labor costs. By doing so, businesses can improve delivery times, and free up a few extra hours each day, which can be invested elsewhere. After all, in business, time is money!
Delivery Speed Still Plays a Big Part for Customers
We’ve probably all ordered something that we were excited about and unrealistically checked for shipping updates every waking hour of every day until the item was out for delivery. Then we inevitably walked to the front room to gaze longingly out the window, standing watch, and waiting for the sound of a delivery truck.
Although delivery cost is a crucial factor for customers, delivery speed is also essential. It is the second most important delivery factor, following cost. While delivery cost has become increasingly significant over the past year, delivery speed has actually decreased in importance since 2022.
As supply chain disruptions subside, retailers can offer more stable delivery estimates, which alleviates concerns about shipping delays and out-of-stock items, making them less of a priority for consumers.
Gaining increased control over shipping costs and shipping speed can play a huge role in profitability and customer satisfaction.
How ShipKey’s Shipping Fulfillment Software and 3PLs Can Drive Cost Savings and Business Growth
Many merchants operate out of a single warehouse, with a majority of them being the sole occupants of the space. However, for those with only one warehouse, adding a second in a strategic location can significantly reduce their average shipment distance, often by over 70%.
Managing one warehouse can be quite challenging on its own, and if expanding to additional warehouses is not feasible, 3PLs (third-party logistics providers) are an option worth considering. These options can help businesses achieve sales growth with fewer overhead expenses. With the proper systems in place, it’s much easier to scale operations by leveraging the capabilities of a 3PL.
If your business has the capacity to run multiple warehouses, it may be easier to save on shipping costs, the only challenge is that most businesses aren’t equipped to handle multiple warehouses. To overcome this, many businesses will use third-party fulfillment options.
In a space where sellers want to be in touch with their customers, utilizing third-party fulfillment options can pay huge dividends and allow for greater efficiencies. Using a complete shipping software solution is key to connecting the various parts of your business, and can unlock growth and money-saving potential.
Now There’s ShipKey
ShipKey is a comprehensive shipping software solution designed to streamline your business’s connection with 3PL partners. Unlike other competitors in the market, ShipKey was created to address the efficiency challenges faced by businesses.
With ShipKey, you can easily purchase shipping labels and manage multiple shipping accounts from a single platform, thanks to its collaboration with reputable carriers worldwide. One standout feature of ShipKey is the ability to seamlessly switch between various accounts when processing and printing labels on the warehouse floor, without the need to repeatedly log in and out of different merchant accounts.
While this may seem like a minor inconvenience at first, in an industry where time is of the essence, saving 30-60 seconds per package can yield significant benefits in terms of time, cost, and labor. This translates to more packages being shipped more efficiently, resulting in cost savings for both the customer and your business.
ShipKey’s shipping fulfillment software provides a solution that optimizes the shipping process, allowing your business to save money and operate more efficiently.