Insight

Pass on lower shipping costs to boost sales

If you experience high abandonment rates due to high shipping costs, perhaps you are paying too much for inventory shipments. Do not believe that UPS always has the lowest rates. Next day delivery does not always have to go by air. Expand your options and make the shippers compete. You will save money, as will your customers, and they'll reward you with their business.

Retailers can also tell if they are overpaying for shipping if they are losing sales. That's why free shipping plays such a big role in on-line retail. If the customer is over-paying then it is likely that the retailer is over-paying, too. Some sellers entice customers with low product prices but try to make up for the low margins with high shipping costs. Ebay listings are famous for this, but beware: customers are turned off by this and will not come back.

UPS and FedEx are most often considered for rapid shipping. Don't forget USPS, which has great service Monday through Saturday, as well as priority mail. Consumers also automatically associate next-day air with urgent shipments, but that is not necessarily true. Ground shipping is often just as fast as air. Both UPS and FedEx promise two-day ground delivery between Chicago and Atlanta. Why fly?

Remember to audit your billing invoices. Humans make mistakes, so it is worthwhile reviewing your invoices from UPS, FedEx and USPS. Don't assume they are infallible, because higher costs from them may drive you to charge your customers more for shipping. And drive them away.

Fairfield Professionals is a boutique consulting firm specializing in the food safety, consumer products and healthcare industries. Fairfield's services include business intelligence, user experience research and design, product management, project management, process improvement and software selection and implementation.

Business Intelligence

Business data organized, analyzed, and presented strategically helping managers to make intelligent decisions faster.

User Experience Design

Making computer interfaces easy-to-use and fast to learn.  Reducing costs, speeding adoption and increasing conversion rates.

Product Management

Building and marketing technology products that people love supported by market and data driven organization and processes.

Project Management

Initiate, plan, execute, control, and close the work of a team to achieve specific goals within given constraints.

Process Improvement

Reducing costs and preparing for growth by identifying and implementing blue collar and white collar improvements.

Selection & Implementation

Needs analysis through roll-out. ERP, warehouse, order processing, order entry, fulfillment, retail, merchandising.

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