Shipping costs ‘biggest threat’ to growth, warn online retailers

Increasing shipping costs, driven largely by inflation and rising fuel prices, pose the biggest risk to online retail growth this year, according to new research.

The study from ShopBob, which surveyed more than 750 founders of UK brands selling consumer goods online, revealed that nearly half – 48 per cent – said rising shipping costs was the factor posing the biggest risk to business growth over the next year.

A further 42 per cent said that reduced consumer spending was the greatest threat, while 36 per cent said post-Brexit red tape on EU shipments was a key risk.

“E-commerce entrepreneurism is booming in the UK but turbulence in the shipping sector is posing a significant threat to this latest generation of online brands,” said Enda Breslin, ShipBob EMEA general manager. “Tomorrow’s e-commerce 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, making use of the sophisticated ecosystem of e-commerce partners to punch above their weight in the multi trillion-dollar global shipping industry.”

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