Shipping Rates for Business

Online retail companies need to implement advanced technological solutions in order to be able to grow their business in today’s competitive marketplace. One of the efficient ways of shipping products is by using the FedEx specialized E-Commerce Solutions that help companies move their online business forward in the dynamic e-commerce landscape. Companies can leverage the inbound supply chain in order to maximize their customer’s e-commerce experience. For an online retail company it is important to set the right shipping rates because statistics show that around 49 percent of consumers consider free shipping as the most important purchasing factor when they are making a decision to purchase online.

A complete supply chain management program for an ecommerce company includes various elements that have to be synchronized together in order to optimize performance. For this reason it is important to develop the right technology platforms, strategies for outbound shipping, and sourcing. The right strategy will not only manage sourcing, but also the functions of the inbound supply chain management. Ecommerce has opened up many areas of opportunity and greatly magnified the importance of optimizing the inbound supply chain.

Companies involved in online retail need to enable their ecommerce business by leveraging their vendors to ship products inbound directly to their final customers as well as to their own locations and develop efficiencies in this area. In order to enrich the assortment of order fulfillment services offered to their customers, electronic commerce has driven online retailers to increasingly work closely with third party firms.

Online retailers work with logistics service providers in order to tap into skills and resources to fulfill their customers’ orders more efficiently and effectively. The inbound supply chain functions can be optimized by controlling supplier shipments both to the end customer as well as the online retailer. Especially for those online retailers that drop ship products directly from vendors to customers is important to leverage logistics services providers. Because online retailers can focus their efforts on acquiring and retaining their customers, drop shipping is the preferred option for them. This way, online retailers do not have to carry and inventory or perform any delivery functions.

Online retailers need to provide the ultimate customer experience in order to stay competitive on today market. For this reason the focus on “customer value” in an imperious necessity. I today’s market ecommerce is about the empowered customer’s “ultimate experience that demands the ability to consume the right product at the right time, place, quality, and price, and gives customers plentiful access to information. Educated and exigent customers today increasingly want to control when, where, and how they receive the product.

These demands, in turn, put an increased pressure on online retailer’s supply chain, as they have to find better solutions to bring products to the customer in an effective and efficient manner. Because efficiency is usually associated with costs in online retailing, ecommerce businesses have to find the best shipping solutions in order to be able to offer low shipping rates. It is critical for these companies to identify the optimal mix of components in their inbound supply chain. Drop shipping is becoming common, because it offers certain benefits in this area. Drop shipping allows online retailers to offer an expanded assortment of products without the requirement to spend money to hold inventory or to carry out deliveries to customers.

Logistics service providers can help online retailers perform drop shipping effectively and efficiently. A typical online retailer might work with an array of vendors, spanning not only large geographical regions across the nation but also international border. In working with such a diverse base of vendors, an ecommerce business needs to optimize the efficiency of their supply chain in order to reduce costs. Asset specificity depends on the ability of the online retailer to access alternative vendors with knowledge and resources needed to provide drop shipping. Among these resources an important role has the vendor’s ability to invest in EDI systems that allow track and trace information and billing, as well as the exchange of customer orders.

Logistics service providers can provide lower transportation expenses by offering discounts on top of list rates and eliminating additional fees incurred in multiple shipments. Standardized electronic platforms provided by logistics service providers also help to increase efficiency. These standardized EDI systems automate the electronic transmission of data, minimize human intervention and manual input, and mitigate the need for customization. They enhance visibility of shipments and reduce the amount of communication for return processing and problem solving, shorten the revenue cycle time and expedite billing.

In order to set the best shipping rates, the online retailers need to review various shipping scenarios in order to develop the appropriate shipping guidelines for their business. These shipping guidelines have to addressed purchase order and reference field requirements, efficient transportation service modes, vendor compliance, and automated shipping requirements. Programs such as FedEx Insight, for example, provide useful features such as tracking and shipment delivery status for both the drop shipping and inbound shipments. FedEx Reporting Online is another tool that provides the online retailer with potential improvements in the revenue cycle time by offering timely shipment invoicing details for billing purposes.