In this article, we will cover the following topics:
- Why does negotiating lower delivery prices matter?
- How should you approach negotiations with parcel carriers?
- Which factors should you consider when negotiating?
- How can you use competition between carriers to your advantage?
- Examples of successful negotiations and practical advice for online stores.
1. Why is it important to negotiate better delivery rates?
Cost-effective, reliable delivery is a fundamental part of running a successful online store. Better parcel rates reduce operating costs, help you compete on price and can attract additional customers. That is why negotiating favourable terms with delivery providers is so important.
Lower shipping costs also mean higher margins. Those margins create more room to invest in marketing, stock purchasing, staff and other priorities. Put simply, an online retailer paying less for delivery has more resources available to grow elsewhere.
2. How should you approach negotiations with parcel carriers?
Prepare thoroughly before you start negotiating. Review your business, shipping volumes and customer expectations. Use that information to define what you want from the contract and which carriers are most likely to meet those needs.
a) Research the market
Before approaching carriers, research the market and collect as much information as possible about their prices and service levels. This will help you understand your options and give you a stronger basis for negotiating.
For delivery within Slovenia, well-known providers include DPD, GLS and Pošta Slovenije. You are likely to consider at least one of them. Each has strengths and weaknesses: one may offer a lower rate, another fewer uncollected parcels, while a third may handle complaints and claims more effectively. Some focus on low prices, while others offer more advanced technology. Certain carriers specialise in smaller parcels; others handle larger shipments. The right choice therefore depends on your product mix, parcel profile and how you balance price against service quality.
For international shipping, there are more possibilities. Well-known options for EU or US deliveries include DHL and Packeta, and you may also be able to negotiate cross-border arrangements with local DPD or GLS operations. The key is to build an efficient logistics process around the selected service.
You can also contact us at OnlySales for help selecting a carrier. Based on our experience with substantial shipping volumes, we can recommend which delivery options may be suitable, show you how to calculate the true cost per delivered order after allowing for uncollected parcels and complaints, and explain what to pay attention to. The advertised base price of a parcel can be misleading.
If you already work with — or plan to use — a Slovenian fulfilment centre such as Warehouse.si, you may also gain access to its special partner rates with several of the carriers mentioned above.
b) Prepare your arguments
Collect data about your business before negotiating: your shipping volumes, rate of growth and customer expectations. This allows you to make a concrete case for why the carrier should offer you more favourable conditions.
Do not prepare only your current numbers. Present a credible plan for the coming years and explain how and why your daily parcel volume is expected to grow.
Remember: it is usually much easier to secure a competitive rate before signing a contract than to persuade a carrier to reduce an expensive rate you have already agreed to.
3. Which factors should you consider during negotiations?
Pay particular attention to the following factors when negotiating with carriers:
a) Shipping volume
The larger your shipping volume, the stronger your negotiating position. Carriers are generally prepared to offer lower prices if they can see an opportunity for more business and consistent volume. Make the size of your account a central part of your argument, ideally supported by evidence of the number of parcels you dispatch each day.
b) Reliability and service quality
Price is not the only thing that matters. Focus on carriers that can deliver quickly, reliably and to your customers' expectations. Ask retailers with a similar product range which delivery companies they use and whether they are satisfied. Pay particular attention to their percentage of uncollected or undelivered parcels: this can become a substantial hidden cost. In our experience, some carriers have achieved roughly half as many uncollected parcels as others under comparable circumstances.
c) Flexibility
Successful negotiation also requires flexibility. Be prepared to adjust some of your requirements and find compromises that work for both your business and the carrier.
A particularly important point is where and when parcels are collected. If your warehouse is in a small town and you insist on a very specific pickup time, you may pay more or find that some carriers are not interested. Collection options are usually broader in Ljubljana, so agree your preferred daily pickup window at your address before signing.
4. How can you use competition between carriers to your advantage?
Competition can be your biggest asset in negotiations. I recently read a “life hack” suggesting that you should change your mobile phone operator every 12 months.
In e-commerce, you could make a similar argument about parcel carriers.
Don't worry: carriers tend to be far more enthusiastic about sending you an “annual price increase” than an “annual price reduction”. Reducing or cancelling those increases is your responsibility. Here's how you can approach it:
a) Compare offers
Collect and compare quotations from several carriers. You can then select the provider that offers the best overall terms while meeting your quality and service requirements.
Every 12 months, send your current parcel-volume figures to carriers you do not use and ask what they could offer. Sometimes a provider is particularly keen to win new accounts during a certain period and is willing to lower its rates more aggressively.
b) Use competitive pressure
When discussing renewal terms with your current carrier, refer to genuine competing offers you have received. The possibility of losing your business may encourage the existing provider to improve its conditions.
Be careful with contract confidentiality clauses. Some carriers explicitly prohibit you from sharing their rates with third parties. Forwarding copies of confidential contracts to competitors could put you in an awkward legal position. Remember that you would not want a carrier telling a rival retailer how many parcels you send each day or which countries you serve.
c) Make it technically easy to switch providers
You will negotiate from a stronger position if your online store and warehouse systems allow you to change carriers quickly. Otherwise you may become too dependent on one provider. Nobody wants to pay for hours of programming work every time a carrier changes, so many retailers stay with the same company even as rates creep up. Businesses with flexible shipping integrations can act on better offers and are often better positioned over the long term.
5. Successful negotiation examples and advice for online retailers
Here are some practical tactics that can help you secure more favourable delivery terms:
a) Highlight your strengths
Point to your advantages: fast growth, entry into new markets or a strong online presence. This helps the carrier see you as an attractive account with potential for future volume.
Explain what makes your business different. The salesperson you are speaking to may already manage 50–100 businesses like yours. If you expect exceptional terms, you need to convince them that you understand your operation and have a credible plan.
b) Build long-term relationships
Emphasise that you want a lasting working relationship, not just the lowest possible price today. Service quality, trust and the ability to solve problems together should also matter.
A fair commercial relationship works both ways. You may sometimes need to accept a reasonable seasonal rate increase, while your carrier should be prepared to discuss deterioration in successful deliveries or a rising number of customer complaints. Bring that evidence to meetings when you negotiate revised rates.
c) Negotiate additional benefits
In addition to the headline price, ask about perks and operational improvements: insurance included in the rate, faster transit, customer calls or SMS notifications before delivery, faster settlement of cash-on-delivery payments and similar benefits. These can improve the service you offer your customers and increase satisfaction.
d) Review and update contracts regularly
Do not assume that the contract you signed is always the best one available. Review and renegotiate regularly to respond to changes in the market, secure additional benefits and avoid paying unnecessary charges.
One common carrier tactic is to appear competitive by advertising only a cheap base rate — for example, delivery of a parcel weighing 0–2 kg — while gradually increasing charges elsewhere in the price list. Look for fuel surcharges, charges to return uncollected orders (see our article about uncollected parcels), COD collection fees and charges for customer SMS messages or calls before delivery.
Always calculate the actual all-in cost per parcel. You may be surprised to discover that the carrier with the lowest basic delivery price is not the cheapest overall.
Conclusion
Negotiating competitive parcel rates is an important part of running a successful online store. The advice above can help you achieve better contractual terms, lower your shipping expenses and make your business more competitive.
Remember that successful negotiation also depends on your willingness to compromise, your flexibility and your ability to build long-term relationships with carriers.
If you believe you've already done everything possible but still deserve a better parcel price — or simply don't know whether your current rate is competitive — contact us through our website. We can often arrange more favourable conditions for business partners through the higher parcel volumes underlying our carrier relationships.
Another approach we strongly recommend for online shops dispatching around 10–200 parcels a day is to work with a fulfilment centre such as Warehouse.si. Its much greater combined shipping volume often gives it substantially better bargaining power. For some retailers, the delivery savings alone can offset most or even all of the cost of outsourced fulfilment.
Damir Vidan
CEO, OnlySales.si