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Nearly half of online retailers face cost challenges due to shipping price rises

New research suggests that almost half of online retailers are facing a cost challenge due to shipping cost increases in 2022.

Of 750 founders of UK brands selling consumer goods online, 48% said that rising shipping costs posed the greatest risk to their business over the next 12 months while 42% said reduced consumer spending. 36% said post-Brexit red tape on EU shipments posed a key risk.

The research, from ShipBob and CensusWide, showed that the cost of shipping a shoebox-sized parcel to America has risen by nearly a third since May 2021, from £15.73 to £20.56, thanks to a combination of currency fluctuations, international fuel surcharges and inflation rates.

Yet North America is the second biggest export market for growing UK brands, with a quarter (25%) of UK ecommerce entrepreneurs currently exporting to North America and 59% selling in Europe. 23% of founders said that they would be prioritising the North American market over the next 12 months.

However, despite the rising prices 92% of those surveyed expect their revenues to grow within the coming year and more than half (54%) predict revenue growth of at least 15%.

Enda Breslin, ShipBob EMEA GM, said: “Ecommerce entrepreneurism is booming in the UK but turbulence in the shipping sector is posing a significant threat to this latest generation of online brands. Tomorrow’s ecommerce brand unicorns will be the ones that get international sales correct today and we always advise founders to think globally from the start, but external factors like currency fluctuations and fuel surcharges are currently making this more difficult than usual. Small brands should still look to expand ambitiously but should pay extra care to do so in a resilient way.”

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