Key Points:
- UPS, FedEx, and USPS are all expected to announce higher than normal rate increases in September 2021
- Shipping is a form of customer service in online commerce, and it’s best to be extra attentive during the hectic holidays
- Return rates have risen to an average of 25% in eCommerce, making returns a sad staple of peak season shipping
Peak season, from October and January, is a time of welcome change. The leaves are yellow, kids return to school, sales start to pick up – oh, and everyone in eCommerce tries not to lose their mind.
Yes, holidays are fraught for eCommerce brands. Online shoppers expect a lot in terms of fulfillment these days, from fast and free shipping to free returns. These demands, coupled with a sharp and sustained upswing in sales, can strain your bottom line, delivery times, and sanity.
And when peak season shipping kicks into gear worldwide, it unleashes a mess of new complications: courier delays waylaid packages and angsty customer queries. If you’re not prepared, it can sap the joy from the best time of year.
Here are 5 ways to prep for peak season shipping and sail into the new year with a smile on your face.
Table of Contents
1. Brace for Higher Shipping Costs
Demand for shipping capacity and home delivery has skyrocketed since the pandemic, due largely to the rise of eCommerce. All of 2021 has been like peak season for couriers like FedEx and UPS. FedEx has even outsourced some of its fulfillment to USPS in an effort to keep up.
To compensate, UPS, FedEx and USPS are all expected to announce higher than normal rate increases in September 2021, according to the Wall Street Journal. Courier prices increase by 4.9% annually to adjust for inflation. This year, though, there are hints of double-digit increases. FedEx has confirmed it will also be increasing its fuel surcharge, which gets rolled into all rates.
Update - For US-based shippers that ship through UPS using rates provided by Easyship, the peak season surcharge will not be applied. That means that Easyship users will continue to enjoy up to 76% off UPS Daily Rates*. These rates are available for all users of an Easyship account.
For merchants, price hikes will deflate profits for peak season shipping and beyond. You may want to institute shipping fees to offset costs. For example, you could add a handling fee like the sportswear retailer, Fanatics.
Free shipping is a top priority for customers, though, so ‘nickel and dime’ measures that erode conversions may do more harm than good.
Here are a few ways to cut costs:
- Fulfillment partner: 3PLs offer volume-based discounted rates and may be cost-effective for your growing brand.
- Free shipping boxes: Major couriers all offer free shipping boxes online.
- Shipping platform discounts: Try a free shipping rate calculator to get an instant estimate for the volume-based discounted shipping rates available on all shipping platforms.
2. Forecast Demand
Looking at last year’s sales trends is the savviest way to prepare for future demand. Also called demand forecasting, the process of predicting demand enables to avoid peak season stockouts that frustrate buyers and sink profits. Aside from helping prepare for a crush of orders, it also helps you avoid carrying deadstock into the New Year.
Though never 100% accurate, forecasting demand for products helps you gain visibility of inventory trends in order to maximize profits, including:
- Identify seasonal sales trends
- Pinpoint your best-selling SKUs
- Prepare your budget
- Avoid stockouts
- Ensure customer satisfaction
The bustle of peak season also highlights the need for effective inventory management., especially replenishment. Anticipate longer delivery lead times from your suppliers, but also reach out to get an accurate timeline for Q4 deliveries.
Refine your reorder point according to adjusted timelines, or you may find it impossible to get new stock on time once peak season shipping is in full swing. Similarly, you can also stock up on shipping boxes and packaging to help you save time when it's in short supply.
Learn more: How to Forecast Demand for eCommerce
3. Communicate with Customers
Shipping is a form of customer service in online commerce, and it’s best to be extra attentive during the hectic holidays. Rather than risk tarnishing your relationship, you can double down on customer service and branded communications. This avoids unnecessary confusion, but also help to defuse tensions that arise after any unforeseen delivery delays and stockouts.
Here are a few ways to bolster your service during peak season shipping:
- Brief everyone: Staff and associates should be knowledgeable of ongoing promotions, courier cutoff dates, delivery timelines, and ready to handle returns and exchanges.
- Invest in customer service: Be responsive to shoppers via support channels like social, site chat, email, etc. The more successful your orders, the fewer tedious returns.
- Keep your site current: Update your site with any stockouts and de-list these items from any promotional materials until you get a restock.
- Upgrade your tracking experience: All shoppers expect the ability to monitor the progress of their shipments. Make sure all your shipments have global real-time tracking, or you can expect trouble from angsty customers. For a next-level experience, you can redirect shoppers to a professional, branded tracking page instead of the courier website.
4. Develop a Returns Strategy
Return rates have risen to an average of 25% in eCommerce, making returns a sad staple of peak season shipping. With so many orders going out only to come back, you'll want to lay down a returns flow before too late in the season.
Studies show that an easy returns experience is vital to retaining customers. On the other hand, you don’t want a return policy so effortless as to invite abuse. Profits on returned items can be as low as 1%, and lower if you offer free returns, which many online shoppers expect.
An ideal returns strategy is good for customers but also your business Consider the following:
- Communicate your returns policy: Customers should have access to your returns policy on your home page, product page, cart page, and in post-purchase emails. If this information is hard to come by, buyers will get frustrated.
- Be lenient-ish: Most shoppers say they avoid retailers with a strict returns policy. An ideal return policy is accommodating but not so easy as to invite abuse.
- Make returns easy: Amazon set the bar for returns, giving customers a prepaid label to enable return at one of many local drop-off locations. Aim to create a seamless return experience for shoppers. For best results, include a prepaid label (try our Pay on Scan feature, for free) and direct shoppers to drop-off locations for a seamless experience.
- Process returns efficiently: It’s important to identify, sort, repackage, and restock items in a timely manner. Layout the steps for receiving returns, set aside a place that can hold your holiday returns volume, and brief any employees on best practices for returns management.
Related Content: How to Ace Returns with Reverse Logistics
5. Consider Help with Fulfillment
Getting overwhelmed on fulfillment is one of the most common ways for brands to lose money during peak season. Customers have shown little tolerance for delayed shipments, and this goes double as you near the December holidays.
You may want to recruit an extra set of hands to help you pack. You can drum up help on FB marketplace for $15/hr, or ask friends over for the busiest days. Though affordable, the helping hand approach is no guarantee that you won’t be overwhelmed by a rush of orders. You’ll still be at the mercy of order volume, and likely busiest around the holidays when good help is hard to come by.
Partnering with a fulfillment center (3PL) is a popular way for growing brands to outsource fulfillment for some or all orders. For a fee, these warehouses will pack and ship incoming orders on your behalf – even handle returns. If you use a 3PL, you can expect benefits like:
- Accelerate delivery lead times with inventory in multiple locations
- Save on shipping with discount rates
- Reduce the likelihood of shipping errors
Typically, 3PLs can be of most help to brands with a diverse SKU list. Or customers concentrated in areas that can be quickly serviced by last-mile delivery from the nearby fulfillment center. If you’re curious about help with fulfillment, you can always ask Easyship for help or a referral.
Plan for Peak Season Shipping with Easyship
As sales volumes rise, it helps to have systems in place that can handle the extra orders. For this reason, you want to first forecast your demand. From here, you can see about getting extra help, acquiring more stock, improving your inventory flow in order to handle the additional demand. This is also Amazon peak season, so to retain customers, it's best to give a little more.
You can always look to Easyship for an all-in-one shipping platform, whether to simplify your workflow or save on shipping. To use Easyship free for your first 50 monthly shipments, you can create a free account.
Disclaimer: Discounts are off UPS daily rates. Rates are limited to shipping from the U.S. only. Rates and any applicable discounts are subject to change at any time without notice.
