Just as the chaos from the holiday shopping season begins to settle down, e-retailers will find themselves confronting a new challenge – shipping rate and fee structure changes from the major carriers. UPS and FedEx have announced their shipping rates will rise an average of 4.9% for 2017.
According to a 2015 Internet Retailer survey, more than half of e-retailers said they review their contracts for delivery carriers at least once a year. With rates on the rise in early-2017, it may be time to get out those calculators and look for ways to keep shipping costs down.
Newgistics customers DSTLD and Tobi recently sat down with Internet Retailer to explain how they’ve been able to strike the balance between keeping up with shipping costs and offering customers free shipping. After all, free shipping isn’t really free – so how have these e-retailers managed to keep costs down?
DSTLD (pronounced “distilled”) Chief Operations and Financial Officer Kevin Morris explained how the online retailer of premium denim apparel needs to compete with brick-and-mortar stores that offer the ability to try jeans on and see what works. As such, offering customers free shipping and returns is an integral part of their business. DSTLD uses Newgistics, which handles about 90 percent of the e-retailer’s shipping volume, to store, pack and haul its deliveries to consumers. Newgistics’ Parcel Select program offers DSTLD more reasonable rates than the large national carriers, so that it can continue to offer free shipping with no minimum to its customers.
Tobi, another Newgistics customer, offers customers free shipping on orders of $50 or more. The e-retailer of on-trend apparel targeted to women ages 16-24 leverages Newgistics’ relationship with the United States Postal Service (USPS) to take advantage of the mix of speed of delivery and price. Newgistics has also helped Tobi overhaul its returns process, reducing the cost of return packages by 10 percent. The Transit Triggers program and Newgistics SmartLabel technology have given customers more visibility into the journey of their returns, leading to a 15 percent reduction of inbound returns-related calls.
With 2017 quickly approaching and shipping rate increases on the horizon, now is the perfect time to review your delivery carrier agreements. To learn more about what Newgistics can offer you with shipping and returns, please visit: http://newgistics.com/shipping-and-returns/.
To read more Newgistics case studies and white papers, please visit: http://newgistics.com/work/thinking/.