Are you a webshop owner? If so, you need someone to deliver your products.
This is where you step into the beautiful, confusing world of carriers.
What’s most affordable? And how do you navigate your way around the many carrier options available?
This blogpost will show you how. You’ll learn:
- the important difference between the two types of carrier
- which of the two types of carrier provides the best value for money (depending on your size)
- what to research before you choose your carrier (no, price is not the only thing to be aware of!).
Disclaimer: We’re not going to recommend to you a specific carrier. Every carrier on the market has different strengths and it would be misleading to generally recommend one over the others.
Luckily for you as a webshop owner, there’s big competition in the market for parcel deliveries, so every carrier has its strengths. Your best choice depends on:
- how many parcels you send annually
- how big your parcels are
- a few other parameters you’ll learn by the end of this blogpost.
First, you need to know this important difference:
The two types of carrier you should know about
Shipping companies: e.g. GLS, Bring Post Nord,or DHL Express. These pick up your products and deliver them to your customers. If you hire a shipping company, you’ll typically get an offer depending on how many parcels you deliver annually.
Shipping brokers: e.g. GTX or YOYO Global Freight. These negotiate prices with shipping companies on behalf of all their customers. They are able to do this because they can promise the shipping companies f.x. 500,000 parcels annually (which most webshop owners can’t). This makes shipping brokers generally cheaper per parcel. The disadvantage is that shipping brokers aren’t actually the ones delivering your parcels, which means you’ll often need to go to the post office yourself.
Now you know the difference between shipping companies and shipping brokers. So which one should you choose?
Which type of carrier gives you best value for money?
Your choice of carrier should depend on the stage of your webshop. We’ll define the three stages of a webshop by parcels delivered annually and give you a recommendation accordingly:
Stage #1: 0–5,000 parcels annually
Choose: A shipping broker.
Why? The shipping broker offers you competitive prices, which leaves you free to focus on establishing your business. The more expensive the shipping, the more money you’ll end up losing to other webshops. Your customers demand cheap shipping so it’s a good idea to prioritise exactly that at this stage. You will need to go to the post office yourself, though.
Stage #2: 5,000–50,000 parcels annually
Choose: A shipping broker or a shipping company.
Why? By this stage, you may choose a shipping company to deliver all of your parcels. Because your business now has a certain volume, you will be able to negotiate a reasonable price. A shipping company will often provide pickup and a smoother process, which is more important now that you deliver a certain amount of parcels each year.
If you wish to use more than one shipping company, a shipping broker is still your best choice of carrier.
Stage #3: 50,000+ parcels annually
Choose: A shipping company.
Why? At this stage, you will always get the best deal by negotiating directly with a shipping company. A shipping company is also your best choice if you wish to expand globally.
SO: A shipping broker is your best choice to begin with. As your business grows, a shipping broker gets too expensive, and you will get the best deal by choosing a shipping company instead.
The price is not the only parameter to keep in mind
Do you only care about the prices at shipping companies?
You should, of course – but it’s not the only parameter to consider.
Remember to research these five questions too:
- What is the estimated time of delivery? Fast delivery is important for your customers.
- How does the tracking work? An updated tracking system helps you provide good customer service.
- What about IT and integration? Does the shipping company provide integration with Webshipper and other systems?
- How long is the shipping time? You’ll increase your level of competition by being able to provide day-to-day delivery.
- Does the carrier have a good reputation? Always check out the reviews on e.g. Trustpilot before you make your final decision.
Now you know the difference between the two types of carrier. And you know which type of carrier to choose depending on the size of your webshop. Finally, you know the five questions to ask before you make your decision. It pays off in the long run.
Finally, we recommend you do an annual checkup on your carrier to make sure you’ve got the best deal possible. Maybe another carrier is more affordable or you can negotiate better terms with your present carrier. Hopefully, your business is growing, and that puts you in a better position to negotiate the best prices possible – and thereby create a sounder business.