Shipping Hurts

Before you think about starting that ecommerce business, think about shipping and you’ll most likely feel a lot of hurt. The fact is, shipping is the one thing most entrepreneurs don’t account for – in other words, it’s damn expensive.

Wired reports that Amazon has raised shipping again – for non-prime members strangely enough. It’s now $49 minimum. How can a company even with the scale of Amazon have to raise shipping for customers? Here’s why:

In its last quarterly earnings report, Amazon revealed that paid Prime membership had increased 51 percent worldwide and 47 percent in the US in 2015. At the same time, Amazon’s shipping costs grew 37 percent to $1.8 billion last year—one of its biggest expenses.

When you’re thinking about shipping, think about the basket size. If customers shop in bulk, grouping goods together will lower your shipping costs. Another idea is to locate your warehouse/fulfilment as close to customers as possible – that will again lower shipping costs and time to fulfil orders.

The $1 Trillion Ecommerce Opportunity

As a fascinating Bloomberg articles denotes, the cross-border ecommerce opportunity is expected to be a $1 trillion business by 2020. And Amazon is going after Alibaba and others to grasp it. As outlined:

The ambitious strategy promises to turn FedEx and UPS into Amazon rivals, but also will pit the Seattle giant against Chinese counterpart Alibaba Group Holding Ltd. Both companies are vying for dominance of the rapidly growing cross-border e-commerce market, which by 2020 is expected to swell into a $1 trillion industry serving 900 million shoppers, according to a June report from Accenture and AliResearch, Alibaba’s research arm.

More at Bloomberg