There’s no denying that holiday shipping is expensive. Transport companies are overloaded with packages, roads are congested, and drivers are paid overtime—which all lead to increased costs for companies that are looking to ship their goods. A higher demand for the holiday season means a significantly higher shipping cost as well.
Despite the cost, you still want to offer great shipping options to your customers. Free and fast shipping set you apart from competitors, but they eat away at your already-slim holiday margins.
So we’re here to ease the cost (and the stress) of shipping your products to customers this holiday season. Today, we’re focusing on improving the “last mile” shipping, which is the last leg of shipping transport that runs from the final warehouse to your customer’s house.
1. Minimize your packaging.
Most shipping carriers will charge based on the size and density of your box. A lot of carriers care more about density than size, though. This is called “dimensional weight pricing,” so they charge more for packages that are large but light. The smaller the box, the less you’ll pay.
Cut out the extras so you don’t end up paying for the empty room in your package. Try to use the least amount of packaging as possible. This will save you on packing materials as well as shipping costs. In some cases, ordering custom boxes is even less expensive than shipping boxes that are too large.
Tip: If you use Amazon FBA, you can contact them and ask them to use less packaging. Say that the packaging is wasteful and ask for a more environmentally responsible alternative. This is especially important if you have an eco-conscious consumer base.
2. Choose your company.
Which shipping company is best to send your goods? See our comparison of the top shippers below.
UPS and FedEx usually get a better rep than the U.S. Postal Service (USPS), but USPS is often the cheapest of the three services. It’s also much more expansive with over 30,000 locations across the country. You can usually find a USPS location within 10 miles. No matter where your customers are, they can receive and return their packages from you.
Plus, it is required by law for USPS to charge the same rate no matter where you’re shipping throughout the country. So you’re getting the same rate from New Jersey to New York as you are New Jersey to Las Vegas. This creates significant savings if you host most of your products in just one or two warehouses but ship nationally.
USPS also offers the widest range of size options. This means you can find a closer fit to the size of your product, so you’re not wasting space or money.
Pro-tip: Their Priority Mail flat rate box is usually the most effective option for retailers. You get a flat rate no matter what you ship and the box will arrive in 1-3 days. This usually appeals to your customers without killing your revenue.
They deliver Monday through Saturday and Priority Mail can be delivered on Sunday. This is a major plus during the holiday season when every day matters to get products to customers.
United Parcel Service (UPS) handles more than 15.8 million packages daily, making it the world’s largest package delivery service. Last December 20, their busiest day of the year, UPS handled over 28 million packages. There’s trust in numbers.
UPS specializes in small package delivery. They use a network to process all packages through a single network, which streamlines their processes. This means they’re great for smaller retailers as well as larger ones.
Their standard ground delivery is usually less expensive than USPS and FedEx but, their delivery times are usually slower. You’ll need to balance time with the cost for your consumers when using shipping as a marketing tool. They also never deliver on Sunday, and Saturday delivery is an extra fee.
FedEx is the smallest of the three, but it’s still a giant in its own right. They handle more than 3.4 million packages daily, and their busiest day last year saw 19.8 million shipments. They focus on express shipping, so they’re highly reliable when it comes to fast delivery. They’re usually the most expensive, though.
If you’re offering fast shipping to customers and you want reliability, FedEx is often the go-to.
Amazon has launched their own delivery services and they’re increasing the number of trucks and drivers for the holiday season. Whether or not you use FBA, you can use Amazon’s Multi-Channel Fulfillment (MCF) to focus on logistics and sales. You can use this for your Amazon.com orders and even orders on your own website or other platforms.
Although the fee is on the higher side, streamlining operations through Amazon drastically eases your holiday shipping stress.
4. Prepare for bad weather.
Bad weather happens. And your shipping carrier can’t do much about it. Your customers will still blame you for not getting their products on time—especially if they don’t get it in time for Christmas.
Make sure you have communications with customers who are waiting for packages. You’ll want to automate their shipping emails, so they receive updates when their shipment has been ordered, processed, shipped, and delivered. This gives them delivery peace of mind, so they feel they have more control of their holiday presents.
But if you anticipate a storm will delay their package, contact them with a message or email to alert them to this delay. Do this as soon as possible. If they paid for rush shipping, offer to refund that cost to strengthen your customer service.
You’ll also want to invest in package insurance. Lost or damaged packages are more common during the holidays due to the high volume of shipments and packages left out in bad weather. Offering insurance and tracking packages can help you save money on damaged packages this season.
The good news about bad weather? You might notice a spike in sales because people are at home online shopping more.
Image via Shutterstock.com
5. Consider your Returns Shipping Process.
Returns are much more common during and after the holiday season. You want to make this process as smooth (and inexpensive) as possible, so your customers will want to use you in the future. If it’s hard to return, they’ll get frustrated with your brand and likely won’t purchase from you again.
Free, no-questions-asked returns are becoming the norm in e-commerce. With online purchases, customers don’t get to see the product before buying. So 67% of shoppers will check the return policy, and 58% want a hassle-free returns policy. But if returns are easy, 92% of customers say they would buy again from that brand.
The physical aspect of returns is just as important as the cost. You want to work with your carrier to determine how reverse last mile logistics work. Can you offer prepaid labels that the customer affixes to their own packages and can drop at a center? Are there enough retail centers of that carrier near your customers? Can they get pickups from home?
Note: Offering free returns means that you could end up paying for shipping back—plus you’re refunding them their money. So this is actually cutting into your revenue, not just your product margins. You’ll want to carefully consider how to approach your returns process so you maintain customer service standards without killing your business.
Holiday shipping can be expensive and challenging, but a little prep and research can go a long way. Be the best in customer service with strong shipping options by balancing price with speed and reliability.
How do you ship your holiday goods? Give us your tips in the comments below!