Starting your own eCommerce business is exciting, but it's not all smooth sailing like those online guides suggest. While there's definitely a potential for good profits down the line, managing costs, especially shipping is key – and trust us, they can stack up before you know it. But why are shipping expenses so high? And more importantly, how can you cut down these costs. Scroll down below to find out.
Why Shipping Is So Expensive
When you're running an eCommerce business, you'll notice shipping fees can sometimes feel like they're through the roof. Here's what influences higher shipping costs:
1) Distance
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The further your package needs to travel, the more you'll have to pay. Think about it: when you send a package, it might pass through multiple cities, maybe even across country borders. Longer routes mean more work for the delivery team, more fuel, and potentially more stops along the way. All these factors contribute to a higher cost.
2) Weight and Size
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Moving on to weight and size. Heavier and larger items are more expensive to ship. That's because these products take up more room and need special equipment and more people to handle them, which adds to the cost.
Also, weight and size impact how a shipment is classified. Different categories have different pricing structures. For instance, shipping a small, lightweight package will cost less because it fits into a standard, economical category. On the other hand, oversized or overweight items may fall into a premium category.
3) Speedy Delivery
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We all love to receive our orders quickly, but fast shipping is costly. Expedited delivery means your package is prioritized, which requires logistic companies to work faster and often use special equipment to meet tight deadlines. This urgency bumps up the cost.
4) Fuel Costs
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This is a big one. Shipping costs are directly influenced by fuel prices, which can change a lot due to the global supply chain price fluctuations in the oil market. Air freight, in particular, is pricier compared to land or sea transport since it uses a lot more fuel.
5) Handling Fees
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There's a lot of work that goes into getting your package from point A to point B. Packing, handling, and caring for the package all add up. If your item is fragile or needs special care, this requires more effort and, as a result, more money.
How Much Does Shipping Cost?
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Now, let's talk numbers and answer the big question: How much does shipping actually cost? To give you a general idea, let's break it down:
- Domestic Shipping Costs: For shipping within the same country, costs can range from a few dollars for small, lightweight items to upwards of $50 for larger or heavier packages.
- International Shipping Costs: This is where costs can really climb. For international shipping, you could be looking at anything from $20 to several hundred dollars. A standard package sent from the U.S. to Europe, for example, might cost around $25 to $60, but if it's heavy or oversized, you could be looking at $100 or more.
- Expedited Shipping Costs: If you're in a hurry, expedited shipping can cost significantly more. Overnight shipping rates to a domestic shipping destination, for example, can range from around $25 for a small package to $100 or more for larger parcels. International express shipping can be even pricier.
Tip: To get a rough estimate of your shipping costs, consider using the shipping cost calculators of your preferred shipping carriers.
How to Reduce Shipping Costs
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Looking to cut down those shipping costs? Here are some practical tips to deal with rising shipping costs:
- Compare Carriers: Don't just stick with one carrier. Research and compare rates from different shipping companies. You'll eventually find a carrier that offers better deals for certain package sizes or destinations.
- Use Packaging Provided by Carrier: Many carriers offer their own packaging materials for free or at a reduced cost. Using these can often be cheaper than buying and using your own.
- Optimize Packaging: Speaking of packaging, make sure it's as efficient as possible. Use the smallest size and lightest material that will safely get your products to their destination. This can significantly reduce costs, especially for items that are priced based on size and weight.
- Ship in Bulk: If possible, send out orders in bulk rather than individually. Bulk shipments often qualify for discounted rates, saving you money in the long run.
- Negotiate Rates: If you're shipping in high volumes, you might be able to negotiate better rates with carriers. Don't be afraid to reach out and discuss your needs with them.
- Consider Hybrid Services: Some carriers offer hybrid services where they partner with local postal services for final delivery. This can often be a more cost-effective solution for small packages.
- Offer Longer Delivery Windows: If you can afford to extend your delivery time, do so. Slower shipping options are generally cheaper than expedited services.
Why Did Shipping Costs Rise During the Pandemic?
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During the pandemic, we all noticed a significant spike in shipping costs. This increase wasn't a random occurrence in the global supply chains; several factors contributed to it.
Firstly, there was a huge surge in online shopping. With more people staying at home, the demand for online products skyrocketed. This sudden increase in orders meant that the shipping industry had to handle a lot more packages than usual.
Then, there were the safety measures. The pandemic required strict safety protocols in warehouses and during delivery. These measures, though necessary for everyone's health, slowed down the shipping process and added extra steps and costs.
Another big factor that intensified these issues was the global shipping container shortage. The disruption in global trade flows meant that containers were not in the right places, causing a significant bottleneck. This shortage made it harder and more expensive to find available shipping containers for shipping products, further driving up costs.
Lastly, many companies faced challenges with staffing due to health concerns and restrictions, leading to fewer people available to process and deliver orders. This shortage of staff further contributed to delays and higher costs.
Summary
The current shipping prices may seem high, but they are a result of various factors. Make sure to consider these factors when calculating shipping costs for your eCommerce business. And, to decrease the cost, implement the tips mentioned in this guide.
Speaking of smart shipping solutions, have you checked out Nice Packs? At Nice Packs, you can find a range of shipping boxes for eCommerce businesses that are not only durable but also cost-effective. Shop with us today.
