Welcome to this episode of Women Powering Ecommerce. Join me every Tuesday and Thursday as I take you behind the scenes of my journey as a female e-commerce entrepreneur. Together, we'll explore the highest the lows, inspire you to take action, and achieve your own business goals. So let's get started.
All right. So today let's talk about navigating the hidden costs in shipping. When I say that, I mean understanding that fine print, understanding your invoices to avoid those unexpected charges. And should I say hidden costs? Sometimes yes, sometimes no. Maybe the term unexpected charges would be more appropriate, but sometimes they do feel hidden.
So why am I talking about this today? Well, of course, I have my own e-commerce store and what I'm going to share with you today is from my experience as an e-commerce owner and really going through those ups and downs about getting great shipping prices and then finding out that you've been charged for something you didn't even know existed.
So there are some frustrations sometimes in there and also from the viewpoint that... from actually experiencing all of these challenges with shipping was born our other company, Buster Fetcher. And at first it was a solution that we created for ourselves, but eventually we thought other businesses because really benefit from it.
So we've learned so much along the way about shipping and what you can do to save here and there and really get the best prices and competitive prices as much as possible in your market and industry. And we see things with so many businesses on a daily basis that we've just grabbed all of that information, and I'm more than happy to at least give you some basics to help you with your shipping and at least it's something that we're using and that we're doing on a daily basis.
So it's definitely a story I'm excited to tell just because I'm connected to this story from so many angles, okay. When you grow an e-commerce business, there's this excitement of scaling up and reaching global customers.
And my last encounter with unexpected shipping fees, because yes, even though we've grabbed so much information over the years and learned so much, there are still things that I'm learning in that shocks me, okay?
So here's the latest thing that happened. Real life example. So last year we were using a carrier, DHL, and I don't even remember how I encountered that. I think I was just doing my due diligence, which I do once in a while with our expenses and the business.
So I was taking out my invoices, DHL invoices, which I don't look every single week or month. I do it once in a while. I try to do it once a month, and I came across something I've never seen before. I saw $30 charged extra on packages that I was paying maybe 20, $25 max. So I was being charged doubled. And those fees were called remote area delivery. That's what it said on the side.
So I asked myself, "What is that? Why am I being charged double?" Because I was realizing, "Okay, our shipping invoices are really increasing by a lot lately."
So what happens is that yes, in that circumstance, DHL, they charge a remote area delivery fee, meaning that if it's outside a certain area that's probably a little bit further than the certain cities, they'll charge you extra fees to go to those places.
So I didn't know that and it kind of happened here and there. I saw that on my invoice and I called my rep and I asked, "Okay, what is this? I never saw this before. What's happening?" I was just looking for some clarity and some explanations.
So that's when I was explaining that they charged that once in a while depending where you're having your package delivered. And my next question is, "How can I know in advance that this is going to be charged?" And the answer I was given was, "You can't. You can't know."
So I thought that was really not a great response. I think as a business owner you should with... know in advance as much as possible what you're going to be charged, especially when it comes to shipping.
At that point, I just decided to stop doing DHL to finally realize before we stopped that that was a negotiable rate or fee. That fee is actually negotiable and I did not know that.
And eventually before I decided to stop working with them at the time, I was able to get that fee reduced to I think like $4 instead of 30. So please talk to your rep. I mean, everything is negotiable. Literally, almost everything is. So I think that's something you have to know.
And just a little fast-forward to now, we're going back with DHL with lower prices than we had, no gas surcharges that they can charge a lot, and no remote area delivery fees.
So we went from $30 to $0. I was able to negotiate that. Very happy. So just letting you know that you don't have to feel like this is normal, everything is negotiable.
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I also, just to go back to my story, I saw a few address corrections here and there on the invoices and I learned that sometimes even just a period or a comma that's not put in the right place in the address, the initial address can have them do an address correction. Or sometimes like the Boulevard spelled, if you try to put it in four letters, BLVD or depending on... they'll change it. They can charge you for an address correction. So be extra careful.
So talking about hidden costs or unexpected costs, here are few maybe other examples. So example, so we talked about residential delivery fees or the remote area delivery fees for DHL, that's what they call it. And yeah, so some carriers charge extra for delivering to residential addresses compared to commercial ones or something that's much further than in certain cities. So you have to make sure you check that.
Address correction fees, like I said. So if the shipping address provided by the customer is incorrect, sometimes it could be as small as... it can be something very insignificant, but they can make the address correction. They'll consider that as an address that needs to be corrected.
And other things is return to standard costs. So if items are undeliverable for whatever the reason and need to be returned to the seller, you might incur costs. So that's something you have to know. I think we all once in a while return packages, which they'll write on it RTS or return to sender. So be careful; those might be charged too.
Another thing that a lot of people don't know is dimensional weight pricing. So shipping costs might be calculated based on the packages dimensional weight rather than its actual weight. Or sometimes they'll take into consideration both.
So they'll weigh your package, that will determine your price, but then the actual size of the box will make a difference for the same weight. Let's say you have two pounds in a small box and a two pounds in a much bigger box, it can change the pricing and result in higher costs.
And there are a lot more. Those are just basics. But I mean you have to stay on top and know these things because they can just add costs, and by a lot. Like I told you before, I doubled overnight some shipping costs for certain packages because I didn't pay attention. That's basically the cost from not paying attention.
So understanding these potential unexpected costs help my e-commerce business more accurately budget for shipping expenses. And what I learned from that is not all shipping costs are upfront. Many providers have surcharges based on various factors from fuel prices to delivers done. So you really have to know that these exist.
And also the importance of due diligence. Always read the terms, the conditions, the potential fees of any shipping service. Now, I'm much more on top and I really check the fine print as much as I can, especially in shipping because there is a lot of small details and you need to be attentive to those.
You want to build a buffer into shipping budgets; that's another thing I realized just to accommodate unexpected costs because you cannot know in advance everything that's going to be charged, and you definitely don't want to undercharge your customers because that will definitely hurt your profit margins.
Another thing is open communication with your carriers. If possible, develop a good relationship with your rep, your representative for whoever the carrier you're using because you might need to regularly discuss and clarify any charges or potential charges. And developing that relationship will be at your advantage for sure.
Another thing is remember to regularly review and renegotiate your contract. So as your business grows and shipping volume increase, there might be room to negotiate better terms or explore maybe bulk discounts. And that's how lately we got really, really good prices for DHL. I'm using them as an example today, but there are so many other carriers to which this applies.
We got our prices down to a point we never have before, but that went through some negotiating. And sometimes you just have to ask and not be scared and you'll be surprised. I mean, you are a valuable customer to them, and they'll really be open a lot of the times to really helping you out, because in the end, it'll be a win-win situation for both of you.
All right, so another maybe last point is just stay updated on industry trends. So fuel prices, any regulatory changes, global events can impact shipping costs. If there's... We had fires lately this year; those definitely impacted shipping times, therefore shipping costs sometimes.
So you want to stay informed and just be on top of those things to adopt and anticipate those changes. So tune in into my next episode as we'll dive into other e-commerce stories.
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