In our latest video, Future Proof Advisors COO Greg Boles shares the sneaky ways eComm businesses can lose money on shipping without even realizing it. From unexpected fees and surcharges to the high cost of packaging materials, Greg reveals the top four hidden costs that can significantly impact your bottom line.
To learn more, you can watch our latest video or read on to learn the four surprising ways e-commerce businesses could be losing money on shipping.
4 Surprising Ways You Could Be Losing Money on Shipping
- Loyalty programs & promotions: Loyalty programs and promotions can increase shipping costs as they incentivize customers to make larger orders, which could inadvertently result in higher shipping costs. E-commerce businesses should ensure their shipping policies are designed to recoup larger order sizes to mitigate these potential losses.
- Fees and surcharges: Shipping carriers often add fees and surcharges to shipping costs that can catch businesses off guard. For example, fuel surcharges can increase as oil prices rise, and additional fees may be added for delivery to residential addresses, oversized packages, and other factors. Failure to take these factors into consideration when determining shipping policies could result in undercharging customers.
- International shipping charges: Shipping internationally can be expensive, and it’s important to factor in all the costs associated with international shipping, including customs duties and taxes, brokerage fees, and currency conversion fees. Even if international sales are a minority of total sales, these fees can add up and wipe out profitability in some cases for a whole month of orders.
- Cost of packing and shipping materials: The cost of packing and shipping materials can add up quickly, especially if you have a loyalty program that encourages customers to order more items. Larger orders will require more boxes and packaging materials to accommodate, which should be taken into consideration when running loyalty programs, promotions, or discounts.
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