How Business Can Save Money on Shipping?

By | Aug 23, 2020

If you run a small business, shipping expenses can cost you a considerable amount of money. Implementing sustainable ways of shipping your products can contribute to the success of your business.

Efficient shipping strategies are vital to every business, but most particularly to small businesses. As a small business owner, you want to maximize to tap on potential savings and revenue. Shipping and postage cost is a recurring business expense that you can cut considerably.

Sadly, many businesses embark on the hit-or-miss method when deciding on their shipping strategy. They work with different couriers and try different services that eventually lead to losses. Aside from financial costs, it can also negatively impact your business reputation. Late or undelivered shipments are among the most common customer complaints that can affect client satisfaction.

Below are some tips on how to keep your shipping expenses low. These tips can result in major savings at the same time give you peace of mind knowing that your products are delivered to their intended recipients on time.

Choose the right carrier

Not all carriers offer the same price. For instance, FedEx, DHL, and UPS have a comparably higher price than USPS. Unless you’re sending significantly high volume, using USPS can save you a considerable amount. So, for small businesses with lightweight items, USPS is the ideal carrier. You can cut your shipping costs by up to half the price of other providers.

However, this does not mean that you should ditch other carriers. Some shipping companies offer considerably lower pricing tiers. You can check out their retail rates and their conditions to find the best deal.

Negotiate the rates

If you have a particularly high volume shipment, you can talk with your shipper and negotiate the price. Get in touch with your carrier and explore some of the package rate specifically designed for small businesses. No business is too small to negotiate so don’t hesitate to approach them.

Explain your shipping criteria to the carrier. If you have a longer lead time and your package does not require special care needs, the shipper might consider offering you better or special rates. Shipment companies usually have small business specialists who can advise you on the best way to send your deliverables, either air or ground. They can also recommend a shipping schedule that can help lower costs. Businesses that don’t ask can pay as much as 40 percent on unnecessary fees.

Consider your carrier as a team and not just as a provider. This enables you and your shipper to deal with shipping issues as a team, thus better results for both parties.

Consolidate your shipment

Many small businesses are unable to get great deals from carriers because of their limited shipment volume. As a result, small businesses are constrained to take costly pricing tier.

One way to save up is to consolidate your shipment with other companies. There are less-than-truckload (LTL) shipping companies that allow you to piggyback your goods on their current high-volume shipments. With this, your packages are shipped alongside a bigger shipment. Thus, you pay for only a fraction of the cost. LTL shipping companies will find available space where your package can fit in.

Another way is by coordinating with other companies in your area and consolidating your shipments. You can join a local professional association and arrange a shipping schedule. However, consolidating may not always work, especially if you have special shipping requirements.

Ensure accuracy

One of the simplest ways to save on shipping is by stating the accurate description and weight of every shipment. The more accurate the shipping details are, the more likely that you will not be overcharged for excess fees.

Accuracy does not only pertain to the package details. You should also have accurate details about the recipient. Software developers at Byteplant emphasize the importance of address validation in increasing shipment deliverability. Putting the wrong address can lead to undelivered goods, a negative impact on client satisfaction, and unnecessary financial costs. According to the USPS Office of Inspector General, undelivered-as-addressed (UAA) costs businesses about $20 billion a year. The use of address validation tools can greatly help improve accuracy and increase deliverability.

Save on packaging

The packaging is a major shipping-related expense that many businesses overlook.  Check your packaging and consider reducing the layers if possible.

Every new box or packaging material that you use means additional costs for your business. Reusing packaging materials that you receive (and often stuck in your warehouse) can help cut your expenses.

When reusing boxes, make sure that you choose the ones that are in good condition and do not contain markings from its original supplier. Better yet, you can request your suppliers to send goods in unmarked packaging. You can also use worn-out or labeled packaging materials for other purposes. For example, you can shred old boxes and turn them into filling materials.

Recycling and reusing these materials will not only help your business save money but also an eco-friendly initiative. However, you should never sacrifice quality over savings. Overly skimping on packaging can compromise the structural integrity and safety of your shipment. The goods get damaged during transit and result in a negative impact.

Cut excess weight

Shipping costs are based on the dimension, size, and weight of a package. Heavier and bulky packages always cost more to ship. Review your packaging methods and explore ways that will avoid wasting space while ensuring structural integrity. Try to fit your product into the smallest possible package.

Usually, it’s impossible to trim down the weight of the product. However, you can avoid wasting space by looking for the best packing method. Better yet, you can try to redesign the product for long-term savings.

Pass on the shipping costs

Although free shipping is ubiquitous in e-commerce, it is not the standard. Many small businesses are unable to absorb this added cost. To stay competitive while ensuring profitability, you should consider passing on the cost to the customers by slightly increasing the prices to account for the shipping expenses.

Alternatively, you can offer free shipping but with conditions such as orders reaching a profitable margin, orders with several items, or local orders that you can personally deliver. Likewise, you can offer free shipping for repeat transactions or customer loyalty. Another way is to offer a pickup option to cut shipping costs for you and your customers.

Final Thoughts

Running a business entails a lot of things to monitor and manage. All of these strategies can help save money on shipping and increase your business bottom-line. You just have to stay organized to see the considerable amount of savings you can make.

Category: General

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