Shipping costs are generally one of the most expensive items on a brand’s balance sheet – often second only to the cost of the products themselves. In fact, for every $100 spent online, brands spend $20 on fulfillment and logistics to get the product to the end customer.
While there are lots of tips and tricks for cutting costs, high shipping costs are at their root a warehousing strategy problem. To reduce shipping costs, a company has three options: increase volume to receive a greater discount from carriers, downgrade to slower shipping services, or move products closer to the end customer.
Moving products closer to customers is the most impactful and actionable option for most brands. For example, a company going from one West Coast distribution center to a second distribution center on the East Coast can save 30% on their parcel shipping spend.
The Flowspace Network Optimization algorithm helps brands identify optimal fulfillment centers within our distributed network, so they can provide the fastest, most cost-efficient shipping to their customers.
Interested in learning more about how Flowspace can help you reduce your shipping costs? Get in touch with us today.