They always say that putting all your eggs in one basket is never a good idea. So, why do it with ecommerce shipping?
While sticking with USPS or FedEx can feel like a weight off your mind, having no sway over changes in T&Cs, delivery destinations, or rising shipping rates is a massive disadvantage for your business–and also for your customers.
Whether it’s finding the cheapest 2-day shipping option or a flat-rate shipping method that can take a certain DIM weight, being able to rate shop effectively between carriers doesn’t just save you money; it also makes your shipping strategy much more efficient.
We’re going to cover everything about shipping rate shopping in ecommerce, and how ecommerce brands can stop leaving dollars, time, and efficiency on the table with the help of ShippingTree.
What is rate shopping in ecommerce?
Rate shopping process is when ecommerce shippers compare and contrast shipping rates offered by different parcel carriers to identify the optimum delivery option for their needs. When shipping rate shopping ecommerce merchants will typically focus on the following criteria:
- Cost
- Service level
- Delivery speed
- Value-added services i.e. signature, redelivery attempts, shipping insurance
The purpose of rate shopping is to reduce shipping costs while helping ecommerce brands streamline their shipping strategy to ensure they aren’t leaving valuable time and dollars on the table with each shipment. As well as lowering shipping costs, being able to access faster shipping options for less means more satisfied customers, and better growth opportunities for your business.
Why should ecommerce brands rate shop between shipping carriers?
Finding the best balance of cost and speed
Only having to worry about requirements for one shipping carrier might be more straightforward than balancing several. But when you’re wedded into only one carrier–whether that’s a nationwide carrier like FedEx or a regional option–you have no choice but to whether changes in surcharges, additional handling costs, or the addition/removal of service options. Over time, these inevitable adjustments cost your business big time.
Rate shopping expands your shipping horizons by providing alternative shipping options that offer the right balance of competitive delivery timeframes and cost savings. Instead of being stuck with a carrier who might raise prices without warning, you have the ability to find the best possible deal.
Expanding geographic coverage
Partnering with a regional parcel shipping carrier is ideal when you’re an emerging brand whose customers are based in one area of the country. But as your business grows and starts attracting orders from elsewhere, your chosen carrier may not be able to service these additional areas effectively, resulting in higher shipping costs. When this happens, rate shopping offers a way to expand your coverage and find other carriers who can better service your business.
Accessing volume during peak season
Parcel volumes undergo a sharp increase during Q4 as consumers begin shopping for the holidays and taking advantage of mass sales events, like Black Friday and Cyber Monday. As shipping carrier’s volumes grow more constrained, this can make it difficult to use only one carrier to deliver holiday orders. Splitting volume between multiple carriers not only means better rates but also less likelihood of shipping delays caused by lack of volume.
Scale your operation more seamlessly
As order volumes grow and more products are added to your line-up, your shipping needs will become more complex. It might become necessary to explore hazmat shipping options, for example, or incorporate an air freight option for customers who want expedited shipping speeds. Rate shopping helps to provide insights into the most efficient carriers and service levels, taking into account factors such as destinations, service levels, and product characteristics, which saves considerable time and resources.
What does shipping rate shopping involve?
Identifying what carriers/service levels are available
In order to rate shop, you first need to identify all carriers that are available to your business and their corresponding service levels. Factors that will influence available carriers include geographic coverage, delivery speed, value-added services, and accessorial surcharges such as delivery surcharges and additional handling.
Compare shipping rates between carriers
Once you have a list of appropriate carriers, you need to compare their shipping rates. It’s important to note that not all carriers will have a service level that corresponds clearly with another, depending on where they operate and the delivery timeframe. For a fair comparison, you need to take into account the parameters of each carrier service and available rates, such as DIM weight restrictions, destinations, prohibited items, and any applicable discounts.
Assess additional services
As we’ve said before not all carrier services are alike, even if rates are similar. Some shipping rates will also include additional services that you would otherwise have to pay for, such as shipping insurance or tracking, as well as perks such as Saturday delivery or allowing shoppers to choose a delivery slot. Understanding what services are included in what rate is key to assessing different carrier rates, service levels at different carriers and the overall level of value.
Monitor delivery performance
Once you’ve selected your carriers and shipping rates to rate shop from, you need to monitor the performance of these shipments to understand whether your business is getting good value for money. Tracking the delivery performance of carriers not only ensures that they are meeting commitments but also helps you to identify inefficiencies in the shipping process that may be contributing to customer dissatisfaction, such as poor communication or difficulty scheduling deliveries.
The challenges of manual shipping rate shopping
Too much time wasted
Manually comparing carrier options, analyzing rates, and monitoring performance take valuable resources away from other parts of your business–especially during peak sales events where you need all hands on deck.
Inability to calculate rates in real-time
Shipping rates can be as dynamic as the stock market, once you take into account factors like route consolidation, weather events, holidays, and more. This is nearly impossible for humans to calculate on their own, as available rates would have to be updated almost continuously to avoid discrepancies or unexpected surges in costs.
Impossible to scale
As your order volumes increase, manually shipping rate shopping for every single order simply isn’t untenable. It would require an entire team to check accurate shipping rates for each order and cross-reference multiple carriers to find the best option, which is both expensive and inefficient for your business.
What is shipping rate shopping software?
Rate shopping software is a platform that automates the process of comparing shipping rates between carriers according to the criteria you select. Rather than having to manually search and compare carriers, rate shopping software does this for you and helps to streamline your shipping operation, reduce labor overheads and make sure that your business always has access to the optimum delivery options that give you a competitive advantage.
Rate shopping software helps ecommerce businesses to access lower shipping rates by using shipping software doing the following:
Real-time carrier rate shopping and calculations. Rate shopping software integrates with numerous carriers to provide ecommerce businesses with real-time shipping rates, making it possible to accurately calculate shipping costs for each shipment. This ensures transparency and helps avoid any discrepancies that might lead to customer dissatisfaction.
Ecommerce integrations. By integrating with major ecommerce platforms such as Shopify, shipping rate shopping software also ensures that updating shipping rates on the front end of your website happens seamlessly and doesn’t add any friction to the customer experience.
Reporting and analytics. Being able to monitor the performance of your shipping options is key to refining your rate shopping strategy and ensuring that you are finding the best possible value.
Rate shopping with ShippingTree
ShippingTree’s rate shopping capabilities give merchants the flexibility and tools to optimize their shipping process according to their preferences. From setting up custom rules and parameters to blacklisting non-preferred carriers, ShippingTree ensures merchants can strike the right balance between speed, cost, and reliability. Here’s a breakdown of how ShippingTree’s rate shopping works:
Customizable shipping method mapping
When merchants set up their ShippingTree account, they have the option to map shipping methods according to their online store. This ensures the specific carrier and service matches what your customers can select at checkout.
Customizable parameters
ShippingTree offers customizable rate shopping options that allow merchants to search for the best rates based on parameters like carrier selection, transit time, and delivery promises. Merchants can prioritize certain aspects of shipping, like selecting the fastest or most economical option.
Automated rules
ShippingTree’s platform allows merchants to set up shipping rules that automate the selection of shipping methods based on pre-defined conditions. For example, merchants can set rules that prioritize speed for time-sensitive deliveries or opt for lower-cost methods for non-urgent shipments. Plus, if certain carriers or service levels do not meet a merchant’s standards, ShippingTree provides the ability to blacklist them.
Want to learn more about ShippingTree’s flexible fulfillment technology? Reach out to one of our experts today.
