This holiday season, high shipping costs are likely to eat into business profits reports the Wall Street Journal. To manage, entrepreneurs have begun changing their selling strategies, buying delivery vehicles, and more.
Early in the COVID pandemic, companies using shipping services accepted higher shipping rates and less advantageous conditions that carriers like FedEx and UPS proposed despite historically high hikes. As these increases continued, not only shipping rates but also associated fees like residential delivery rates, oversized item fees, and fuel surcharges continued to tax businesses.
To help manage costs, one specialty pharmacy in Wisconsin has its staff look at seven-day weather forecasts, calling patients to see if they can wait for medication shipment until after bad weather events.
“I’m training my pharmacists to be amateur meteorologists,” said Ben Heiser, VP of operations and business development at Lumicera, which annually ships 250,000 packages of medications across the U.S.
Nancy Madsen, an owner of a vinyl and craft store in Texas, said that she has been adjusting how weight is measured for items in her online store to provide a better estimate of the final cost of delivery, indicating that customers often abandon their online cart after seeing how much they must pay for shipping. She has also removed heavier items, like cotton shirts, to keep costs manageable.
When bargaining with carrier services, larger shippers are more likely to secure bigger discounts as well as refunds for delivery issues than smaller shippers, according to the report; however, carriers are wanting to maintain small- and medium-sized business relations because of their higher revenue margins.
To support this effort, USPS is providing more shipping options to meet customers needing to lower prices. The newest offering, USPS Media Mail, takes upwards of a week to deliver but provides the largest relative value. Full Story (Subscription Required)
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