Returns Reduction

Reducing Outbound Shipping Costs: The ROI Revolution

The Shipping Dilemma – Outbound Shipping Costs are Killing your Bottom Line

It seems strange to think about the upcoming 2018 holiday season when spring is just begun, but if you want to move the cost reduction needle in a BIG way this holiday season, add more to your bottom line, now is the time to prepare. You’re going to spend 8% or more of your net sales on outbound shipping this year. So, to move the profitability needle BIG, start by looking at a detailed assessment of your outbound shipping costs; which are changing and rising at dizzying rates today.

What you ultimately pay is driven by a complex and ever-changing set of rules, and it’s often not something to tackle alone.

Why is Reducing Shipping Cost Hard for omnichannel and eCommerce Retailers?

Starting with the right foundation

It is imperative to start with a strong shipping profile to give you a springboard for adjustments and forecasts. This will ultimately drive your savings.

Begin developing your shipping profile from simple factors, like the number and weight of packages shipped by service level to each zone.  Additional essential components are layered on your shipping profile. These include carton dimensional, DIM factor, fees for carrier services like address corrections, delivery area surcharges, etc.

As policies change, your shipping profile needs targeted updates. These issues are complex. The better your reference data, the better your chances of saving money continuously.

You May Need to Go to the Carrier for Data

Sometimes your accounts payable department will only have data in summary-level. The whole point of an outbound spend analysis is to understand the cost drivers. If you don’t have the detail internally, go to your carriers. The detail is necessary to derive an accurate shipping profile.

Don’t get bogged down by all the data. Spending diagrams act like the direct data balance that relates to each expense.  Refine the focus, so only the most relevant info appears on your shipping profile and show the spending trajectory. You can course correct for more savings when you see the spending angle precisely.

Find the Money

Your shipping profile will provide the key to your business’s “sweet spot(s)”. You can target combinations of volume/zone/weights to achieve the top discounts. Take a hard look at every carrier that charges for specific services, such as residential delivery, address correction, etc.  Weigh these against like companies.

You may feel that you have the best deal with carriers. However, the odds are that you can do better via a hybrid outbound option.

 The Newmine Difference

We practice what we preach, and it pays off. We added hundreds of thousands of dollars to our client’s bottom lines when we take on an outbound shipping cost-cutting project.

This is not a one size fits all solution. We can filter through the incoming information overload and find the relevant data. We have the industry benchmarks that allows us to determine if you are getting the best deal. We understand both the hybrid outbound strategy and its implementation.

In life, in retail, and in achieving ROI, it is both the destination and the journey. You have the potential to save big every year. The difference is how much attention you pay and what you do with the information once you have it. This is complex data analysis. It’s good to know that you will never have to take this step on your own.

Start preparing for your 2018 holiday season by reducing your outbound shipping costs NOW. Click here to get The Key to Optimizing Outbound Shipping, a case study from the retail experts at Newmine.

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