Hidden Ecommerce Fees Your Business May Not Be Aware Of
Did you know that there are various hidden charges and fees that your ecommerce business could be incurring? It's important to be aware of these so you can budget accurately and ensure your business is as profitable as possible. In this blog post, we'll explore some of the most common hidden charges you'll find across your ecommerce logistics operations-and then we'll tell you how to minimize them.
Poor parcel routing
Poor parcel routing is one of the most common hidden ecommerce charges. This occurs when a business ships a package through a less-than-optimal route, incurring higher shipping costs. This can happen for various reasons, such as not being knowledgeable of the best shipping routes or using outdated shipping software.
With poor parcel routing, your business isn't the only party being impacted-so are your customers. More shoppers expect fast shipping on their online orders, so ensuring that parcels arrive promptly will create a positive experience that might keep them coming back for more.
To prevent poor parcel routing, it's essential to be aware of the different routes available and use shipping software to help you find the most efficient route for your packages.
Overpaying for insurance
Overpaying for insurance is another common charge in ecommerce that businesses spend more than necessary. This occurs when a business either overpays for insurance or pays for insurance that isn't necessary.
Avoid overpaying for insurance by taking a closer look at your current insurance. If you insure through a carrier, you may be paying more than you would through a third party. On top of that, avoid paying more than you need to for insurance. Some items may not be worth the additional charge for insurance and could save you money in the long run by skipping them altogether.
Insure with EasyPost
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Parcel size and materials
The size and materials used to package goods can also impact your shipping costs. If you're using oversized or oddly-shaped packaging, you may be paying more for shipping than necessary. Additionally, if you're using heavy or delicate materials, that could also result in unnecessary increases in shipping costs.
To prevent unnecessary charges, it's crucial to optimize the materials and sizing of packaging for your products. Typically, lightweight materials will get the job done while costing you the least amount of money. Be conscious that you use boxes or mailers that best fit your product as well-there is no reason to send a small Christmas ornament in a large box, after all. Keep it compact and protected.
Inefficient warehouse design
An inefficient warehouse design indirectly costs many businesses money without them ever noticing. A poor layout can lead to longer travel distances for your employees, causing it to take more time to get packages out the door. And if you're shipping fragile items, longer distances may even increase the chance of damaged goods.
To avoid these charges, it's important to design your warehouse for efficiency. This includes considering things like employee workflow, package storage, and order picking. You may also want to look to your shipping software for help in designing an efficient warehouse layout. This will help you ensure everything is in sync and running smoothly.
Paying for unused space
Even if your warehouse design is efficient, you still may have unused space that could be costing you. If you're paying for square footage that you're not using, you're wasting money that could be used elsewhere in your business. To prevent this, do a regular audit of your warehouse space and get rid of anything that's taking up valuable space without being used.
Hidden accessorial charges
Hidden accessorial charges, such as pickup costs, delivery fees, and liftgates. Carriers and logistics providers charge these accessorial fees on top of pre-negotiated fees, which can catch businesses off guard. To prevent this from happening, be sure to ask about any potential accessory fees during the negotiation process and consider them into your budget on top of expected fees.
Avoiding hidden fees
The hidden fees associated with ecommerce can put a strain on finances, but by being aware of them and taking steps to avoid them, you can keep your shipping costs under control. Paying attention to potential accessorial charges, designing your warehouse for efficiency, and using the right packaging for your products can help businesses save money and avoid hidden fees altogether.
EasyPost helps users build a faster, more flexible, and more reliable shipping logistics operation. Our suite of shipping APIs don't only help shippers save on insurance, but also supports label generation, helps users find the best shipping rates, verifies addresses, and much more. With 99.99% uptime, we're the most reliable in the industry. Sign up for free today or contact one of our shipping experts to learn how EasyPost can help your business save on shipping.