January 21, 2022
Keeping costs down: 10 tips for saving on ecommerce postage
By: Peter Gregory
Running your own clothing shop online? Tired of watching post & packing costs eat into your profits? Don’t worry — help is at hand! In this guide for UK clothing e-tailers, we’ll lay out 10 sure-fire ways to save money on postage this year!
You’d be amazed at how easy it is to overspend on postage just by falling outside of the standard parcel size and weight limits. If you ship garments out in boxes that are too big, or if you don’t divide heavy orders into multiple shipments, you can pay more than you ought to just because you’re a few grams or a few millimetres over the threshold.
Generally speaking, if you’re sending a lighter (or tighter) parcel, it’s going to work out cheaper for you, so take a close look at how you generally ship things. When packing clothes or accessories into a box, do you find that there’s a lot of empty space in the box? Do your garments flop around in transit, or are you stuffing neatly folded clothes into a tight mailing bag?
The same goes for parcel weight. If your customers tend to place orders that fall just outside common weight limits (for Royal Mail, for instance, the common cutoffs are 750g and 2kg – source), then consider rearranging goods into 2 or more parcels. Your customer will still get their goods at the same time (as long as you send goods on the same day with the same delivery service), but you’ll potentially shave a lot of money off your annual postage bill.
Remember that there’s more to packaging than weight and size. Sustainability is also incredibly important, too. A lot of the more eco-friendly packaging materials on the market these days are cheaper than you might expect. Read our guide to sustainable packaging here.
It’s tempting to promise free delivery on all orders placed through your site, but it doesn’t make good business sense, and it’s not something that every customer expects. It’s perfectly reasonable — and fair — to pass postage costs on to your customers.
You can turn this into a positive for shoppers by giving a few different postage choices. If you let your e-shoppers choose between standard and premium delivery, for instance, you’ll give customers more control over the speed at which their goods arrive.
Consider offering a ‘domestic’ and ‘international’ postage fee structure, too. The cost of shipping a parcel to a UK address is much lower than air mail and other options to overseas destinations. What’s more, UK-to-UK orders don’t require customs declarations or import & export taxes. As long as you’re clear and transparent with your shipping costs, most international customers will understand why they have to pay a little more to get goods shipped to them.
You can also use free shipping as an incentive for people to place bigger orders with you. Offer free shipping on all orders over a certain minimum value. The customer will feel like they’re saving money this way, while at the same time you’ll reduce your shipping costs because you’ll pack more product into fewer parcels. Not only will this increase your turnover and profits, but it will get more of your designs out into the world!
A lot of our customers prefer to send parcels with a ‘tracked and signed’ delivery service. This gives e-tailers the ability to tell customers where their orders are at any moment. It also gives the shop and the shopper confidence that goods won’t disappear from a customer’s doorstep. But there are downsides.
For starters, premium postage options can cost more than double that of standard delivery, and they can actually be less convenient. If your customer has to visit a depot with ID after work just to grab their parcels in person, they won’t thank you for it!
If you’re looking for ways to save money this year, we suggest you run a few tests with your next batch of orders. Try sending 10 orders on a premium tracked-and-signed basis, then try a basic tracked option on the next 10, then standard on the next 10 and so on. Check your email inbox at the end of the month, and ask yourself: did you get any questions or complaints from these shoppers? If so, is there a pattern that matches the delivery standard? If you can’t prove to yourself that there’s a clear advantage to spending more on premium postage solutions, then wouldn’t you be better off saving that cash and reinvesting it elsewhere in your business?
One of the biggest costs you face when posting parcels is the cost of your own labour. You need to put a fair value on your time, especially if you’re designing and making your clothes yourself. Time spent writing out postage slips, printing off your own mailing labels, driving to the depot and despatching parcels yourself is time you can’t spend building your business. If order fulfillment starts eating into your creative time, then find ways to save time wherever you can. Invest in a label printer or franking machine. Rearrange your stock room so that it’s easier to pick and pack parcels. Add up the cost of getting a courier to pick up parcels direct from your door (Royal Mail can do it for as little as 60p for a single parcel – source).
The parcel delivery business is a competitive one, with lots of big-name providers actively seeking your business. You might be used to dealing with Hermes or FedEx or Royal Mail or DPD or any one of the big-name couriers, but don’t automatically assume that that’s where the best prices are to be found. Do your due diligence Shop around and get a quote from every courier or mail provider you can think of.
When getting quotes, remember that you are looking for a long-term logistics partner that can grow with you. Your postage deal needs to get better as your business gets bigger. Get a quote for your current parcel volumes, then get a quote for double that. There’s no sense in picking a courier that gives you a great rate today if you’ll need to switch providers again tomorrow. And, if you can, talk to a salesperson. Salespeople tend to have better deals to offer than online calculators, and they can make you aware of options that you hadn’t previously considered.
One way to keep your postage costs low is to use each parcel as a little sales tool! Pack a coupon or other incentive with each order. If the offer is good enough to generate some repeat sales, you can cover the cost of postage with new orders from old customers!
It’s always worth trying to sell something else to your existing pool of customers. These people have bought from you online and have (hopefully) had a positive experience. It’s much easier for you to get someone like that to buy from you again than it is to find a brand new customer. Take advantage of this, and pack every envelope with reasons to shop again!
Coupons and money-off vouchers are good options, but any promotion that encourages a second sale is worth trying. For instance, if you’re in the luxury clothing market then discount codes might not be appropriate. A high-end catalogue could work, though.
You don’t need to be a nationwide supermarket chain to offer click-and-collect. You don’t even need a shop!
If most of your customers are local to you, and if you have a regular retail space (it could be a shop or a market stall, for instance), then consider offering a free click-and-collect option. Customers can travel to you, pick up their orders in person at their convenience and browse your latest designs while they’re there.
We all want to offer our designs to the whole world, but sometimes you need to go one territory at a time, especially if you’re tight on time and resources. Now that Brexit has happened, UK sellers are facing new customs fees and forms when selling certain things to certain countries. All of this red tape is very time consuming, and there’s not much a small business can do to make it simpler.
If you’re still a solo designer taking care of every aspect of your business, from design to shipping to accounts, you already have a lot on your plate. You might find it easier to just focus on UK customers for a few months. Your admin will be a lot simpler, and it could give you the time and space you need to build up your cash reserves and start hiring people!
Communication with your customers is very important … especially if you’re a small clothing brand. As soon as a new customer places an order on your website, you need to reassure them that their goods are on the way. Otherwise, your shipping costs will escalate, because orders will be returned as soon as they arrive on the doorstep of frustrated customers who have changed their minds.
Customers want to know whether their order has been received, whether parcels have been shipped, and how long it will be until the parcel arrives. You can answer these questions for your buyers with an automated email or text message. Tracking numbers are very helpful, too: if you do send parcels on a tracked basis, just share the number and a link to the tracking tool on the courier’s website. On our own site, we have a Delivery Information and Returns Policy page just to make it as easy as possible for customers to understand what to expect.
Make a list of every customer complaint and question you get over a set period of perhaps a month or two. If there are common questions that crop up, try to address these on an FAQ page or in your customer communications page.
Prices change over time — make sure you stay on top of it! Compare the postage costs you’re paying against a few other couriers every few months. Set yourself the target of shaving a few pennies off your average parcel postage cost every month. Don’t let inflation, expiring intro deals or other issues cut a hole in your pocket.
Listen to what your customers say, too, and make sure your postage is fit for purpose. If you’re getting a lot of returns due to damage, for instance, then you might need to spend more on your packaging materials so that they don’t get ruined in transit. Thin mailing bags might be cheaper than thick ones, but if your designs arrive late or damaged, then you’ll lose more money per-order than you would if you had just gone for a better packaging option in the first place.
That’s it! I hope these 10 steps give you food for thought. Even if you only implement a few of these steps you’ll find that you get more control over your postage costs, and you’ll have more time to spend on the most important part of your business: the design work!
Remember that when customers buy from you, they’re not interested in what postal solution you use. They’re buying your creativity, your attention to detail and your craftsmanship. They want clothes that make them feel and look great. This is just ‘admin’ — get the fundamentals of your online shop right and you’ll have a great foundation on which to build your business. And when the time comes to get your labels made, you know who to call!
Thanks for reading!