The small parcel shipping industry has been undergoing a lot of changes due to the introduction of shipping software, shipping technology, increasing ecommerce shipping, and the “Amazon effect.” Well, Amazon has thrown another curve ball at the parcel shipping industry. They’ve dropped their free package shipping minimum from $35 to $25. Amazon isn’t the only major ecommerce retailer making changes to their free package shipping strategies, however. Target did exactly the opposite of Amazon, raising their free shipping minimum from $25 to $35.
Just back in January, Walmart had also made changes, dropping their free parcel shipping minimum from $50 to $35, which may have been what lead to Amazon’s decision to drop their minimum further. It may be an attempt to prevent department store retailers from stealing non-Prime customers. Of course, Amazon Prime members receive free two day shipping for their fee of $99 a year. The reason Amazon won’t have to worry much about stealing their own Prime users away is because speed of delivery and free parcel shipping are equally important to consumers. In other words, free two day shipping is better than free 5 day shipping.
But ecommerce shipping businesses have already been suffering from the Amazon effect, so now that Amazon is taking even more steps to dominate the ecommerce shipping industry, what can other companies do to stay competitive? For starters, they’ll need shipping software like a TMS, parcel auditing services, and package optimization.
Transportation Management Systems
For best supply chain management of small parcel shipping, transportation management systems are a vital shipping software to use. There are a lot of benefits for supply chain management from using a TMS, like route optimization, shipment consolidation, carrier selection for cheap shipping rates, carrier performance monitoring, and so on. This can improve your supply chain by helping you save money shipping, increase shipping speeds, and thus help you combat the Amazon effect. More on TMS for small parcel shipping can be found here.
Parcel Auditing Services
Small parcel auditing is necessary to compete in today’s market. It will help you save money shipping by getting back money on late shipments, damaged packages, and inaccurate accessorial charges. This is important to try and counteract the Amazon effect for ecommerce shipping companies, because it will allow them to offer better parcel shipping rates. There are a lot of benefits to parcel auditing services, and parcel auditing is a supply chain management service that should be able to be offered by your TMS provider. More about parcel auditing can be found here.
Package optimization is important for ecommerce shipping. By utilizing the best materials for your packaging, packing products in the correct sized box, and knowing how to avoid damage and excess parcel shipping charges will help you save money shipping and counter the Amazon effect. It’s an important part of supply chain management, because using the best packaging available will help you get cheap shipping rates from parcel carriers like FedEx, UPS, and DHL. More on package optimization can be found here.
The Amazon effect has had an influence on parcel shippers and the ecommerce shipping industry as a whole, and now that Amazon is further lowering its free package shipping minimum, the effects may increase. To counter them and stay competitive it’s important to have supply chain management strategies to help you save money shipping. Using TMS shipping software for cheap shipping rates, parcel auditing services to ensure you keep all the money you deserve, and package optimization to make sure you get the cheapest shipping rates possible and avoid damaging your products can help you lessen the impact Amazon has on the ecommerce shipping industry.