How to Reduce Shipping Costs in 8 Easy Ways
When you start your own eCommerce business, there are a lot of expenses. One cost that will be ongoing, of course, is shipping. Unfortunately, shipping is also one of the most costly expenses you'll need to take on. Shipping costs will vary based on the following:
- Delivery speed
- The number of shipping zones the package crosses
- The weight and dimensions of the product and its packaging
- Delivery insurance
- Delivery confirmation/package tracking
That’s a lot to consider. But, did you know you may be able to reduce your shipping costs with little effort? Here are some of the ways to save big on small business shipping!
1. Negotiate Your Rates
Many small eCommerce businesses assume they don’t ship enough to qualify for carrier discounts. But, it’s important to know that you don’t need to be shipping packages like Amazon do get a better rate! Discounts can often be negotiated with your carrier if you’re making as few as 100 shipments per month by contacting their contract shipping services department and speaking with a representative about your business.
Also, be sure to negotiate with multiple carriers to get the best deal. If one carrier knows you're considering switching, they may be willing to play ball to reduce shipping costs and keep your business.
2. Use Carrier Packaging
When you use your own packaging, it’s possible to incur “dimensional fees” if your box exceeds the size regulations of your carrier. When you use your carrier’s packaging—even if it’s just to put your own package inside of theirs—these fees can often be avoided.
3. Consider Pick-Up and Delivery
You’re already busy—why spend more time and gas money making a trip to your carrier’s location to ship your products? Look for a carrier that will make pick-ups and deliveries at no cost to save you time and money. You’ll be locked into their pick-up schedule, but it just may be worth it!
4. Print Postage at Home
You may know that shipping labels can be printed at home, but did you know you can also print postage at home? Of course, different carriers have different rules about printing postage for packages.
However, once you understand them, you can save money by printing them right from your computer. Some carriers also offer special software that integrates with your own to make the process even easier.
5. Choose Affordable Packing Materials
While some packaging materials are necessary, especially when you’re shipping something that’s fragile, the costs can quickly add up. Of course, while branded packaging is great and adds to the customer experience, it may need to be something you put off until you’re generating more revenue. Instead, purchase plain, traditional packing materials such as boxes, bubble wrap, air pillows, and more in bulk to cut your shipping costs.
6. Use Third-Party Insurance
If you’re shipping valuable items, you probably know that insurance can get pricey. Carriers generally charge approximately 80 cents for every $100 of insurance. However, there are other third-party companies like Parcel Insurance Plan (PIP) and U-PIC Shipping Insurance that charge a fraction of this, usually about 45 cents per $100. That can save you almost half!
7. Calculate All Shipping Costs
Before you bill customers, be sure that you’re factoring in all shipping fees. Carriers have more than 75 special charges, such as fuel surcharges, signature fees, and weekend delivery fees. Unless you’re trying to offer your customers a sweet deal, be sure to include these costs in your pricing structure so you don’t wind up absorbing them yourself.
8. Use a Fulfillment Center
A third-party logistics (3PL) partner such as The Fulfillment Lab can also save you a bundle, offering low-cost shipping for small businesses! When you work with us, we will ship your product from one of our locations that is closest to your customer to avoid excess zone charges.
Because we do bulk business with all major carriers, we’re also able to obtain favorable shipping rates. This way, there’s no negotiation needed on your part. Of course, that’s not all we do (we can get you that customized packaging for less!). Check out our blog, 10 Reasons to Use a Fulfillment Center for Your Ecommerce Shipping, and then contact us to learn more.