One of the biggest challenges that ecommerce brands face is the sky-rocketing costs of shipping their packages. Today’s consumer expects 2-day delivery and a stellar customer experience.
Unfortunately, traditional parcel shipping is priced by zones. This means the more geographic zones your package crosses, the more expensive (and longer) it gets to ship it. And studies show that the average consumer expects a maximum accepted delivery time of 4.5 days, rather than the 5.5 days it was back in 2012.
The only way to bypass the high unpredictable costs of shipping products across distances is a new strategy called zoneless shipping.
Here’s how this ecommerce shipping solution can help you decrease your costs and scale your brand.
What is zoneless shipping?
Zoneless shipping means you pay a flat rate by weight no matter where your shipment is heading and how many zones it’s crossing.
This pricing model is based on a strategy called zone skipping, where a carrier consolidates individual packages from different shippers and then holds them until a specific quantity is reached. This consolidated shipment is then shipped using a regional rate and it allows merchants to avoid freight rates or shipping across zones.
Zoneless shipping vs traditional zone shipping
Traditionally, shipping is calculated by zones. Zone pricing or zone rate is calculated based on the geographic regions your shipment needs to pass through. This means that the more zones your shipment has to cross, the more expensive the shipping cost gets.
This makes shipping very unpredictable. Shipping costs could add up quickly if you are shipping across multiple zones and it varies for each package. This especially affects brands that are scaling as $1,000 could turn into $50,000 very quickly.
For example, for a package weighing 20lbs, delivery from zone 1 to zone 8 is a difference of $45.56. Multiply that by thousands of packages per month and you could be paying double or triple your usual delivery costs.
Brands can find themselves in hot water fairly quickly and have to borrow working capital to be able to decrease the effect of unpredictable zone-based shipping, especially in the busy holiday season.
That’s why brands should use zoneless shipping.
Increase predictability with zoneless shipping
The main advantage of zoneless shipping is the predictability it offers ecommerce companies. Medium to large-sized ecommerce brands that are scaling (like high-growth direct-to-consumer brands) benefit greatly from this mode of shipping.
Ecommerce companies tend to have a lot of customers on both sides of the US – states like California and New York. This makes shipping quite a challenge. Each package has to cross several zones. And what brands had to do to bypass the sky-rocketing costs was to set up several warehouses in strategic locations closest to their customer base.
Another challenge that ecommerce brands face is that large shipping carriers run out of shipping capacity fairly early, ahead of the holiday season, and hike up their prices. Brands that don’t lock in their pricing 6-9 months in advance are left without an affordable shipping solution and have to cancel their orders.
With zoneless shipping and X DeliveryTM‘s shipping API, brands can reimagine delivery and find smaller independent shippers that don’t have capacity limits and are able to deliver each package much faster and at a better rate.
With zoneless shipping, brands can cut their costs and invest in their marketing budget to increase ecommerce sales. It also gives brands much-needed flexibility during the holiday season when demand shoots through the roof.
Advantages of zoneless shipping
With zoneless shipping, you can bypass the large carriers altogether and ship with your local delivery service providers (DSPs) or a USPS terminal for your last-mile delivery. This can help you become less dependent on the large national carriers and more protected from their fee hikes during the holiday season.
Something that could happen with zoneless shipping is that the merchant gets less clarity about the last-mile delivery. That’s why merchants should use a parcel shipping software solution like X Delivery. With X Delivery you get access to shipping technology that connects you with smaller regional carriers that helps you optimize your last-mile delivery.
Another advantage to this mode of shipping is the environmental benefits. With the growth of ecommerce brands, more deliveries are made to the customer’s door instead of a retail location. This is rapidly increasing greenhouse gas emissions.
And turns out, environmentalism matters a great deal to consumers. Studies have found that over 70% of consumers in the US and Canada feel that it’s important for a brand to be sustainable or eco-friendly. And 68% of consumers are more likely to purchase a product from a brand that shares their values.
What brands need to do to decrease the greenhouse gas emissions involved with their fulfillment operations is to use zoneless shipping. With zoneless shipping and X Delivery’s high-volume shipping API, brands are able to optimize their last-mile delivery by using smaller shipping companies. This makes the entire process more efficient and lowers harmful emissions.
Take advantage of zoneless shipping today
With X Delivery, you get the benefits of zoneless shipping with our high-volume shipping API that gives you transparency into the entire delivery process. Our shipping carrier tech connects you to in-motion supply chain assets and a network of carriers, warehouses, and local delivery services that reduce time, save costs, and increase forecast predictability.
Zoneless shipping is absolutely revolutionizing the ecommerce industry. It’s the perfect solution for both small, medium, as well as large ecommerce companies that service the U.S and want to scale their business.
Want to lower your delivery costs? Interested in a high-tech solution that automates shipping and delivery for you so you can focus on scaling your business? Try X Delivery today.