Why Do Delivery Costs Determine E-commerce Profitability? The dynamically changing economic situation presents ongoing challenges for the e-commerce industry. Rising fuel prices and wage pressure in logistics companies translate into higher shipping rates. For a small e-commerce store, every dollar spent on logistics is an amount directly deducted from the margin. Costs Aren’t Everything Shipping price has a critical impact on purchasing decisions. The numbers don’t lie: as many as 66.3% of customers abandon their cart precisely because of excessive delivery fees. This is the main cause of revenue loss at the finish line. On the other hand, contrary to popular belief about the necessity of “instant” deliveries, consumers are increasingly voting with their wallets. It turns out that 78.5% of buyers prefer to wait a bit longer for their shipment if they can pay less for it, instead of choosing expensive express delivery. What’s more, free shipping is a powerful sales tool—70.5% of customers are willing to add extra products to their cart just to reach the free shipping threshold. Therefore, optimizing delivery costs is no longer an option, but a necessity to maintain competitiveness and avoid burning through your budget. Where Does the Money Go? Main Sources of Costs Where Shipping Costs Come From and How to Reduce Them To reduce expenses, you must first identify their sources. Contrary to appearances, the price on the carrier’s invoice is just the tip of the iceberg. As a small business, you typically have a weaker negotiating position and pay list prices, while major players benefit from discounts unavailable to smaller companies. Last Mile—The Biggest Budget Drain Another—and often underestimated—budget drain is the so-called last mile. It’s estimated that the costs of courier delivery to the end customer can account for as much as 53% of the total package transportation costs. If you don’t optimize this single stage (e.g., by promoting cheaper PUDO pickup points instead of expensive doorstep deliveries), you’re losing more than half of your logistics budget. Hidden Costs in the Warehouse Added to this are hidden costs in warehouse processes. Employee time spent manually filling out shipping labels, packing air in oversized boxes, or handling address errors generate real operational losses and costly surcharges for non-standard shipments. How Does a Shipping Platform Work and Why Is It Worth It? A shipping platform is the command center for your store’s logistics. It combines an aggregator of multiple carrier offers with an advanced IT system for order management. For a small business, this means transitioning from “manual control” to full automation. Instead of logging into separate panels of individual courier companies and negotiating with each one separately, you gain access to all services in one place. What Financial Benefits Does a Shipping Platform Provide? Economy of scale—the platform aggregates the shipment volume of thousands of stores, which allows for rates unavailable to individual entrepreneurs. Dynamic carrier selection—for each order, you can choose the cheapest economical option, which matches the preferences of approximately 80% of customers who prefer cheaper, even slower delivery. Protection against hidden costs—the system verifies shipment parameters before generating a label, which reduces the risk of unexpected surcharges. Automation and Returns—Key to Cutting Operational Costs Logistics costs aren’t just transportation fees, but also your team’s time. The shipping platform integrates directly with your store (WooCommerce, Shopify, PrestaShop) or ERP system. Orders flow in automatically, and labels are generated with one click, eliminating the risk of typos and address errors. Thanks to this, an employee can handle significantly more orders in the same amount of time. Equally important, yet often overlooked, is the area of returns. A disorganized returns process is a “silent killer” of margins. Platforms allow you to manage this chaos through automatic generation of return labels and online forms. A smooth return process not only reduces customer service costs but also builds trust—a customer who easily returned an item is more likely to come back for future purchases. Alsendo Business Pro—Technology That Supports Your Business If you’re looking for a solution that will genuinely impact cost reduction, it’s worth checking out Alsendo Business Pro. Our platform operates independently of other solutions and integrates with the most popular e-commerce platforms, streamlining logistics, marketing, and customer service. With Alsendo Business Pro, you gain access to features that build competitive advantage: Branded Tracking and Marketing: turn the shipment tracking page and email notifications into a sales tool. Add your logo, brand colors, and product advertisements to increase return traffic to your store. PUDO Point Map: provide customers with a map of over 250,000 pickup and drop-off points. You can configure it visually and customize the carrier list, which allows you to reduce the costly “last mile.” Advanced Analytics (Optimum and Max plans): make data-driven decisions. Monitor delivery timeliness, analyze costs, and identify trends to better manage your budget. Returns Automation (Max package): reduce manual labor. Automate return processes and analyze their causes to minimize their number in the future. Simply activate your account and configure order sources to start streamlining last-mile processes in your company. The Future of Cost Optimization The future of e-commerce belongs to companies that can combine excellent customer service with operational efficiency. Automation, data analysis, and easy integrations are the key to the lowest possible logistics costs. A shipping platform is becoming the standard that levels the playing field for small businesses competing with giants. If you want to stop overpaying for shipments, verify your current costs and embrace technology that grows your business. Check out Alsendo Business Pro’s offer and activate your account Sources https://www.sendcloud.com/why-delivery-costs-are-a-dealbreaker/ https://www.mdpi.com/2624-8921/7/4/121 Rafał Urbanek