December 12, 2011, 3:11 PM

How 16 e-retailers slashed international shipping costs

Retailers including Macy’s and Amazon had average cuts of at least 24%.

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Sixteen e-retailers realized average savings ranging from 24% to 57% in international shipping costs for online orders in a recent packaging study conducted by Bongo International, a shipping services company.

The study involved more than 5,000 packages ordered online from the 16 retailers by consumers located throughout the globe. After customers placed their orders, the packages were shipped to a U.S.-based international distribution center, where among other things they were checked for possible repackaging under a Bongo International service. As a result, orders were often repackaged in smaller packages, reducing final shipping costs by an average of 32% across all retailers in the study, Bongo says.

The repackaging service addresses the fact that many retailers ship orders in packages that are larger than necessary, which results in higher shipping costs, Bongo says. Shipping costs are set by carrier companies on the larger of either a dimensional weight (based on the amount of space a package occupies) or the actual weight. The larger figure is known as the billable weight.

For domestic shipping, the difference between dimensional weight and actual weight is not as large as in international shipping. As a result, retailers often don’t pay much attention to the different shipping formulas and use larger than necessary packaging, Bongo says. The formula for figuring dimensional weight in domestic shipments is length times weight times height, divided by 166.

For international shipments, the formula is LxWxH, divided by 139. The lower denominator for international results in dimensional weight charges often much larger than actual weight. Shipping in smaller packages can cut costs significantly.

Following is a list of the 16 retailers in the study, with their average billable weights in pounds per package before the repackaging service; the final billable weight after repackaging; the average savings percentage; and each retailer’s rank in the Internet Retailer Top 500 Guide:

● Amazon.com, 9.4, 6.3, 32%, 1

● Backcountry.com, 8.3, 5.6, 28%, 8 (Liberty Interactive Corp.)

● BarnesandNoble.com, 3.5, 2.4, 31%, 41

● Drugstore.com, 6.0, 2.6, 57%, 46

● JCP.com (J. C. Penney), 6.1, 3.9, 36%, 20

● Crew.com, 6.8 4.8, 28%, 50

● Macys.com, 11.5, 8.7, 24%, 17

● Newegg.com, 8.7, 5.6, 35%, 12

● Nordstrom.com, 6.9, 4.2, 39%, 34

● PotteryBarn.com, 33.1, 25.2, 24%, 25 (Williams-Sonoma Inc.)

● REI.com, 11.6, 7.6, 34%, 62

● SaksFifthAvenue.com, 6.6, 4.0, 38%, 38

● Sears.com, 10.6, 6.3, 40%, 7

● Target.com, 13.7, 9.3, 33%, 22

● Walmart.com, 8.4, 5.0, 40%, 6

● Zappos.com, 13.8, 6.3, 54%, 1 (Amazon.com Inc.)

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