Retailers struggle to keep shipping fees steady, pressure on small retailers

[Kristijntje]

The pressure on retailers to offer good deals on shipping is greater than ever because many consumers are turning to e-commerce sites as a way to avoid paying higher gas prices, which have increased from an average of $2.78 a gallon a year ago to $3.85 last month, according to the American Automobile Association.

The high price of gasoline will prompt 36% of consumers to do more holiday buying online, according to a July survey by Harris Interactive for e-commerce technology provider iCongo Inc. 60% cited free shipping as a reason they are more likely to shop on the web. Another study from comparison shopping engine Pricegrabber.com found 20% of consumers who buy big-ticket household items on the Internet are motivated to buy online because of free shipping and delivery.

As much as they would like to satisfy that demand for free shipping, online retailers face the reality that such major carriers as UPS, FedEx and DHL are passing along their higher fuel costs in the form of surcharges...

full article: http://www.internetretailer.com/article.asp?id=27942

[amy]

Absorbing shipping costs can be tougher for smaller e-retailers that often lack leverage in negotiations with carriers, says Boylan of Xpert Fulfillment. Boylan, whose company specializes in retailers that have relatively few SKUs, says he’s seeing more merchants with low order volumes increase their flat shipping rates, hike rates for specific categories that have been hit hardest by fuel surcharges, or raise the purchase amount that triggers free shipping.

We've considered doing both.

[JilleW]

I think fuel costs will always be something one has to deal with in regards to costs of shipping. It's interesting to read this and see that gas prices haven't changed much from since then. They have gone up and they have gone down but overall they still hover around $3.50 or so. Would freight auditing help the larger retail companies to control costs better?