Having the right shipping solution is one of the important things that can make your business run smoother whether you are in the technology, fashion, food, or sports industry. Some of these solutions can help you decrease your shipping costs and some might improve the accuracy of your shipping rates. The end result is that these features improve the overall shipping process.
Here are the top 3 most must-have shipping features every e-commerce that ships physical products should consider having in 2021.
Landed Cost
Landed cost is the total charge of all costs it takes to send a shipment to its final destination. Landed Cost occurs usually during shipping internationally because of all the costs, it takes to get a package across the borders. Landed cost includes shipment costs, insurance fees, value-added taxes, and customs duties. Some of the costs such as insurance fees or import licenses are not obligatory and depend on the nature of the product. Let’s have a look at how Landed Cost helps you decrease your shipping cost.
- Profit margin
It is important to account for every cost directly influencing your profit margin. If you miscalculate how much it will cost you to ship merchandise internationally, you can lose lots of money. Accounting for manufacturing and shipping costs only is not enough. The formula to calculate Landed Cost varies, however in general it can look like this:
(Shipping Cost + Customs Duty + Insurance + VAT + Import License) x 10% = Landed Cost
The margin set depends on the industry you are in and is only exemplary. In some industries setting a profit margin bigger than 10% is completely fine. Setting profit margins will help you understand all the costs incurred during international shipping so that your profit is not wiped out by landed costs completely.
- Landed cost from carriers
Landed costs are directly obtained from the major parcel carriers. The algorithm gathers all the important information for you so that you don’t have to do this manually anymore. Landed Cost can be displayed at the checkout to avoid surprising your customers with unexpected extra costs upon receiving an order from abroad.
- Additional features
It is possible to combine the Landed Cost feature with other features, like Delivery Dates for instance. Delivery Dates informs customers when the package is due. Landed Cost in addition to Delivery Dates provides customers with complete information at the checkout.
Smart Packaging
Smart Packaging picks optimal packaging for each order based on product dimensions. The algorithm automatically and optimally pre-packs an order getting real-time shipping rates from the major carriers (UPS, USPS, FedEx, DHL, Canada Post, and more), using the dimensions of the selected packages.
- Optimal packaging
Having optimal packaging for all the products shipped helps you to decrease shipping costs. Smaller packages might be cheaper than bigger packages as they save more space in the transportation vehicle.
However, optimal packaging does not increase the accuracy of shipping rates. If you want to achieve the highest accuracy of shipping rates, you need to use Smart Packaging which brings us to the second step.
- Increase the accuracy of the shipping rates
Smart Packaging is very similar to what the general public knows as dimensional weight. However, Smart Packaging is an upgrade of dimensional weight. Dimensional weight only takes into account four product attributes; weight, width, height, and length. Smart packaging is one step ahead, it “pre-packs” an order into given packages in real-time. The algorithm transmits the package's precise final parameters to the carrier. This is a smart and automatic way to get the most accurate real-time rates from major carriers.
- Positive environmental impact
Smart packaging has a positive impact on the environment as well. Why is that so? Using smart packaging you will save space in the carrier’s trucks and reduce the amount of filling and packaging materials used in the package. Likewise, you will save money on transportation by avoiding the shipping of inefficiently packed orders. Also, by choosing smart packaging you also make sure that you are showing your customers that you care about the environment through packaging.
Rate Shopping
Rate shopping is a comparison of real-time shipping rates between shipping carriers or their specific services, for example, FedEx ground vs USPS retail ground shipping. It is recommended to use shipping software for rate shopping instead of obtaining real-time rates from the major carriers manually as it can be very time-consuming. The automated process saves you lots of time and money on shipping. Let’s have a look at how:
- Compare shipping rates from multiple carriers in a real-time
Select domestic carriers and their services you wish to ship with. The algorithm will automatically compare their real-time shipping rates and select the cheapest one for displaying at checkout. Alternatively, you can opt to compare international shipping services of various carriers, then the algorithm will compare landed cost estimations and display the lowest at the checkout.
- Display the cheapest or fastest shipping options at checkout
As a result, using Rate Shopping provides your customers with a better and easier choice of shipping options and methods by displaying only the cheapest or fastest ones at checkout, taking care of your customer's wallet, and fast delivery.
- Use additional features
Use Rate Shopping in combination with another feature such as Smart Packaging to compare the most accurate real-time rates based on package dimensions. This way you get the most out of both features and decrease your shipping cost drastically.
Partnership Page
Calcurates by Amasty is the ultimate multi-carrier shipping solution that helps e-commerce businesses to manage, calculate, and display the right shipping methods and rates on checkout. The company’s mission is to help e-commerce make its shipping cost-effective and eco-friendly with the means of its calculation algorithms. You can also check Arka, they offer high-quality custom packaging options such as custom shipping boxes, mailer boxes and custom folding cartons. Get shipping configuration assistance for free with the “ARKA_BOX” promo code.
Author
Lucia Liskova, Content Editor at Calculates shipping SaaS for e-commerce. Get in touch with us on Twitter or LinkedIn.
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