There is no reason to just use FedEx or just use UPS. Businesses should be carrier-agnostic and really prioritize the carrier [service] that is best-fit.” — Shawn Singh, CEO, Fabric Wholesale Direct/Vogue Fabrics

For online retailers and direct-to-consumer (DTC) brands alike, the cost of customer acquisition (CAC) has gone through the roof. Long gone are the days of cheap Facebook ads prior to IOS. Now eCommerce is focusing more on customer loyalty as measured by the lifetime value of a customer (CLV). Learn more on how to navigate rising CAC here. 

Your business already works hard to build and retain customer loyalty. You make changes to increase efficiencies, roll out new products and ensure your prices and inventory match customer demand. But do you expect the same effort, for example, from your parcel management shipping services? 

You absolutely should. If you are not already regularly evaluating your shipping metrics, you are missing a key opportunity to improve customer service and cut Carrier costs by 10-25%. Savings that can be reinvested into customer loyalty programs and shipping promotions.When it comes to carrier selection, continuing to do what you’ve always done may cost you. As Shawn Singh, CEO of Fabric Wholesale Direct/Vogue Fabrics, said, “There is no reason to just use FedEx or just use UPS. Businesses should be carrier-agnostic and really prioritize the carrier [service] that is best-fit.” See video comment.

Navigating the complexities of shipping

Your ability to deliver an order that meets or exceeds customer expectations, is affected by two factors. First, how do you decide on shipping options and delivery timelines? And then, how much do you charge customers for shipping? Charge them too little and margins take a hit. Charge over-high shipping rates and customers will abandon their carts late in the funnel, hurting your checkout conversion rate.

At the core, shipping costs are affected by factors, within and outside of your control:

• Weight and dimension of the package
• Shipping origin & destinations
• Insurance, which may or may not be optional
• Delivery timeline (often customer choice between standard and expedited options)
• Carriers’ accessorial and delivery surcharges, which can be up to 20% of the total shipping fee
  
  

These factors all produce data you may already have but are unable to analyze into the best possible strategy for your business. And, like too many Enterprise Retailers, you choose to consolidate all shipping with a single carrier to gain volume discounts; an outdated strategy that leaves money on the table. But analyzing these micro factors, as well as other macro factors unique to your business, will help you devise the right shipping strategy to deliver orders faster, at the cheapest cost possible. 

"Carrier Rate shopping outperforms the Volume Discount negotiation by often in double-digits. So, it’s a huge opportunity for Retailers to lower expenses."

 "Jon Nordeen, former CIO, Kohls/Hudson Bay"

What is carrier-rate shopping?

That’s where multi-carrier parcel rate shopping (CRS) comes in and gets complicated fast. Consider a hypothetical best-case scenario: finding the most optimal shipping service requires having accounts with at least two different carriers. Using even more opens up additional price points and service levels. All of which must be considered based on the shipping option your customer chooses at Checkout.

So finding a service level that matches your customer’s delivery expectations (without hurting your margins) means logging into your different carrier accounts and input the specifics of the package.That’s a lot of work and permutations for thousands of daily orders. 

Of course, CRS or multi-carrier parcel management software can perform these repetitive logistical backend processes. And most do a good job of deriving the fastest, cheapest shipping service for any order. But most are only as good as the rules you give it to follow. Choose rules that are too static (ie., “Use UPS Ground for Standard shipping between Zone 1 and 4”) and you may miss out on the cost variations between multiple Ground services, such as zip code or packaging types.

Thankfully, automated carrier-rate shopping is possible with the help of intelligent software that uses data plus AI-based decision-making, while providing a better shopping experience.

How true carrier-rate shopping should work?

Ideally, eCommerce automation software for rate shopping compares shipping rates, service levels, and special offers across different carriers. Then intelligently select and display only the best and cheapest delivery options on your checkout page. 

Psychologically, your customers benefit by avoiding the overwhelming experience of skimming through too many shipping options or Carriers to select the one they want. Customers just want to know when their order will arrive and how much to pay. A proper rate shopping solution allows you to intelligently narrow down their choices at Checkout.

Being carrier-agnostic, with a better handle on the most beneficial shipping options for your customers and your business creates a win-win situation for everyone. Click here to learn how FenixCommerce can help with your parcel management rate shopping strategy.

CLIENT CASE STUDIES

Learn how innovative brands found value by partnering with FenixCommerce.

Conclusion

Ready to accelerate your shipping strategy? Lets check our success story of Dermalogica, "Dermalogica Reduces Split-Shipment by 92%." Discover real results – a remarkable 92% decrease in split shipments and a 19% surge in conversion rates. 

Sandy Johnson, Dermalogica's Director of eCommerce, “We knew from prior testing last year that showing customers actual delivery dates would lift conversion and Fenix’s solution does a great job. But the real star so far is Fenix Order Routing by significantly reducing our split shipments, directly impacting our bottom line”