The majority of American shoppers (62.2 percent) say free online shipping is “very important,” according to a consumer survey by the National Retail Federation. Naturally, retailers and ecommerce companies want to satisfy their customers, but demand for low-cost shipping puts pressure on their transportation departments. In fact, the cost of shipping is the biggest challenge facing 63 percent of smaller ecommerce companies, according to a survey by Shippo.
How Can I Afford to Offer Free Shipping?
Wondering how you can afford to provide free deliveries? A third-party logistics provider can help you reduce your transportation costs with these money-saving strategies:
- Economies of scale – Small- and mid-sized businesses lack the economies of scale and relationships with carriers necessary to help reduce shipping costs. A 3PL will be able to leverage buying power and utilize an established carrier network, so they have the flexibility to select the optimal mode/level of service for each shipment at the best price. They also can help you save on outbound freight costs by negotiating rates, as well as pooling parcel packages and leveraging postal work-share options like presorting and drop-shipping.
- Optimized distribution networks– Strategic DC network configuration can help you to deliver product faster, reduce transportation costs and improve service. An established third-party provider should have a network of conveniently located facilities – as well as the ability to open new locations to meet your specific needs. With multiple DCs in the right locations, you can reach more than 98 percent of the U.S. within two business days via ground service, helping to reduce the need for expedited shipments.
- State-of-the-art systems– Sophisticated transportation management systems (TMS), shipment planning tools with predictive modeling, and route optimization capabilities can help to ensure cost-effective, timely deliveries. Technology solutions like these can be expensive to implement and maintain, but they are a key component of a 3PL’s service offering. Let them take on the overhead investment.
An effective logistics provider is always on the lookout for new ways to help you drive costs down and better serve your customers. Talk to your 3PL today.
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