Three Ways Online Retailers Can Outperform Last Year's Holiday Sales

Online retailers can focus on better managing inventory by balancing air, ocean, truck and rail freight so they lock into the cheapest and most efficient shipping methods. Depending on the mode of transportation used to move freight, some online retailers choose to optimize their supply chain by lowering their overall cost to ship while managing transit times to meet inventory needs.

Air freight is the most common and widely used mode of transportation for products due to its short turnaround to increase stock. Air transportation is most commonly used for small and fragile stock, but it is one of the more expensive modes of freight. Intermodal freight (such as transportation by railroads and trucks) is the least expensive shipment method and should be used when products are well stocked and large amounts of inventory are purchased in a particular area. Expedited air and ocean cargo is shipped at a very high speed and can be used when retailers have to wait to gain a fuller understanding of which stock to invest in. Expedited options should be used in these last minute circumstances instead of retailers being forced to use less expensive freight options with a longer transit time. Instead of heavily relying on expedited freight, online retailers should focus on not underestimating consumer spending, like they have done for the past few years, according to the National Retail Federation. Air and expedited freight options have been used more often due to low inventory because of our weakened economy. By selecting shipping methods due to particular inventory circumstances, online retailers can save money and maintain high customer satisfaction.

The more shipping options available to consumers, the more inclined they will be to make purchases. If the shipping cost and the product cost exceed the customer's original price range, then they may not make a purchase. Similarly, if the product is not estimated to arrive before the time the consumer expected, they'll look elsewhere. The customer's willingness to spend money on shipping varies greatly due to convenience and how quickly the product is needed. By offering various freight methods, consumers won't get as easily discouraged by high shipping costs and customers in a time crunch will feel more comfortable in their purchase arriving on time by selecting the appropriate shipment method. When customers feel more confident and comfortable by selecting their shipment method they are more likely to make purchases, increasing the revenue of online retailers.

By increasing the sales of items at a higher price point, online retailers can generate more revenue. Holiday shoppers expect to spend more than they would on products not during this holiday season due to supply and demand, so most consumers are not likely to lose interest in purchasing these items. The inelasticity of time that these holiday products are available allows retailers to raise prices and maintain a strong customer base. Since these products are more expensive, online retailers can better manage inventory because they are less likely to under or over stock. When retailers raise prices they can also reduce the cost of shipping for customers, making them more able to sell larger and more expensive stock. By using a freight-shipping calculator (you can download one for free at FreightCenter.com), both consumers and retailers can easily estimate freight costs. When online retailers raise prices, they increase revenue, decrease the amount of money spent on shipping and better control inventory.

There are many different options for freight rate integration with an online shopping cart. Whether you are an eBay seller, owner of a small online boutique or warehouse manager for a large enterprise, there are several options available to help reduce the cost of freight and/or entice new buyers with lower upfront shipping costs. In addition to FreightCenter.com's freight rate shipping calculator, there are tiered options built for different business sizes and types. An open-source application programming interface (API) can add value to your online business by leveraging the power of a third-party freight provider with your existing website. A step beyond API integration, a transportation management system or TMS combines the attributes of an API with the complexity of a self-servicing freight shipping and logistics program. Each of these products can be found online through most freight providers, including FreightCenter.com.