- Acquaint yourself with factors such as your packages’ size and weight, the source, and the destination, and use this information to get a better deal.
- Big carriers like UPS and FedEx provide discounted or free packaging materials for small businesses.
- If you are selling non-fragile items, switching boxes with poly bags can be very cost-effective.
Shipping cost is an unavoidable and essential expense for businesses. Your shipping cost directly affects your business profitability. Due to the increased demand in e-commerce industries, carriers need to adjust their rates. Usually, carrier revises their rates annually.
Research shows that almost 88% of people choose sites with free shipping. Big e-commerce companies like Amazon offer free shipping worldwide, making it harder for small businesses to compete as they cannot afford free shipping. Thus, learning how to reduce shipping costs is essential for your business.
You cannot increase your pricing just to fit in with shipping. If pricing is higher compared to the market, customers won’t be interested in your business. That’s why most entrepreneurs are creating their strategy to reduce shipping costs by implementing smart solutions.
Here are a few strategies that will help you create your shipping plan to reduce the cost.
1. Negotiate with various carriers:
All shipping companies have their pricing strategy based on volume: the more you ship, the less you pay. Most businesses do not realize that they may have negotiation power. Thus they stick with the first shipping carrier that they have come across.
Acquaint yourself with factors such as your packages’ size and weight, the source, and the destination, and use this information to get a better deal.
2. Weigh package and reduce dimensions:
Havier packages cost more. If you are printing labels in your shop, get a weighing scale, too. It will give you a better idea about your packages’ weight and allows you to calculate the ideal cost.
Some carriers charge more depending on the size of the box, even if it’s light-weighted. So try to reduce the dimensions of the package as much as possible. By using smaller ones, you can save a significant sum.
3. Use carrier provided packages:
Using the package provided by the carrier can help you save a significant amount on your shipping costs. You have to be precautious if you are using your packaging, as companies charge you by boxes’ dimensions. If you surpass your dimensions, carriers will charge you extra. It’s called Dimensional Weight Pricing.
Utility-based packaging is usually designed to your specific requirement and reduces the risk of additional DIM pricing. It is highly affordable, and anyone starting a business can start using the packages.
4. Look for discounted supplies:
Big carriers like UPS and FedEx provide discounted or free packaging materials for small businesses. They also offer a discount on wholesale orders. Big suppliers have affordable packaging solutions, which can result in additional cost-saving.
5. Use prepaid shipping:
A few shipping carriers such as FedEx offer discounts on prepaid shipments. Prepaid shipments mean purchasing a quantity of labels upfront and attaching them to packages when shipping out.
Prepaid shipment is very convenient when you repeatedly send out the same weight packaging and determine the shipping cost in advance.
6. Third-party insurance:
While purchasing insurance for your products, explore third-party insurance companies. Some third-party companies offer insurance at up to 50% reduces rates than common carriers. This type of insurance is the best way to save up on the shipping cost of expensive items.
7. Accurate billing:
Shipping carriers have special charges such as fuel surcharge, delivery on weekends, and many more. If your customer is paying the shipping charge, include everything in the bill so that the burden doesn’t fall on you.
8. Hybrid services:
Hybrid services, such as a smart post by FedEx and a smart post by UPS, cost almost half of the standard delivery. They pick up the package and work with other carriers to transport your package to the closest post office. This service can reduce the cost by almost a half. But the catch is often a slow delivery.
9. Flat rate shipping:
Flat rate shipping is considered a great tool in the shipping industry. Flat rate shipping might not help in reducing the shipping cost, but it has an excellent value. Flat rate shipping means a standard shipping charge regardless of the size of the package. This can attract customers to buy more products.
10. Pick-up points:
If you have a physical shop, assigning a pick-up point is a fantastic way to save costs. If products are available when the customer ordered, you can immediately fulfill them without any shipping. If you are shipping from the warehouse, you can reduce roundtrips by sending most of the products to pick-up points.
If you don’t own a physical shop, you can team up with another store and ship your products there.
11. Pick out poly mailers:
If you are selling non-fragile items, switching boxes with poly bags can be very cost-effective. Poly mailers cost less as they have small dimensions and take up less space in shipping vehicles. Also, they acquire fewer packaging supplies; thus, it saves more money. You can opt for different sizes of polybags as per the product requirements.
As an e-commerce corporation, it is necessary to stay competitive in the market. As important as it is to generate good revenue, it is equally essential to provide a satisfying customer experience. Shipping is a tricky tool for any business. Planning the correct strategy and also you can hire magento developer that help you reduce the shipping cost and increase your revenue.
In this article, we have enclosed several strategies that will help you reduce shipping costs and allow you to focus on business development.