Shipping costs are usually one of the biggest expenses for small business owners. And the fact that carriers raise their prices every year doesn’t help at all. The thing here is that the e-commerce sector is developing and growing so much that it creates a shortage of trucks, warehouses, and truck drivers. Additionally, big companies like Amazon are continuously raising the bar for free shipping, and that doesn’t help small businesses either. So, if you want to stay competitive you simply have to find ways to trim shipping costs.
Now, these costs do involve many variables, and there are plenty of hidden costs laying all around. However, it can be done using a few different tactics or combining them. Here are some ideas to consider.
Decrease the shipping distance
It’s expected that you pay a high shipping fee when the destination you’re shipping to is far away. Brands usually already know that and are going with it. However, you can utilize this knowledge to reduce your costs. In the US, we have eight shipping zones. These are the geographical areas that carriers ship to and that are used for measuring the distance that shipment travels. Naturally, the further your package has to go the higher the shipping cost will be.
If you find a way to eliminate shipping to higher zones, you can save a lot of money over time. Explore your possibilities of pairing with companies that have multiple fulfillment centers. It’s the same story with collaborating with third-party warehouses that support local markets. This will not only reduce the cost, but you’ll also be able to get the items to your customers more quickly. Thus, making you a better seller as you’re giving them a better experience.
Many of the companies and small businesses that we talked to about this subject told us that they would love to join the international scene if they can find ways to trim shipping costs for these distant locations. We all know that it’s not an easy thing to do, but if there’s a market for what you’re doing you can save a lot of money by shipping in bulks.
There are also many companies that can help you with expansion and get your commercial belongings taken care of in no time. All in all, it can be done but you’ll have to spend a little bit of time and money on the process. On the other hand, when you make a breach into the international market, the only question that you’ll ask is ‘Why didn’t I do this sooner?’.
Weigh packages and reduce dimensions
If you’re shipping a lot of different packages, it may be a good idea to use flat-rate shipping. Heavier packages cost more to ship and sometimes it can be hard to predict costs and shipping labels needed. Additionally, carriers usually consider the dimensions of a package also. This means that you could save a buck or two by reducing the dimensions of your boxes if it’s possible.
Using bigger boxes for small items can mean improved safety if you fill them with packing peanuts. But, is the higher shipping cost worth the safety you’re getting? For instance, if you’re in the home decor business, you don’t have to put those small figurines in a big box to keep them safe. In fact, the safest way to transport any item is to make it fit in the box like a glove. Just look at Amazon and at what they are doing.
Find cheap supplies
Another one of the ways to trim shipping costs is to find cheap or discounted shipping supplies. Talk to your shipping provider and see if you can get some boxes and envelopes from them. There’s a real chance that you’ll get some of the packing supplies for free.
On the other hand, buying things like boxes, packing paper, packing wrap, etc in bulks can save you lots of money long term. Now you only need to find container providers you can completely rely on and you have everything you need for your first international shipment. Don’t let the initial investment scare you. You’ll reduce your average per-shipment cost which means you’ll be making more money.
Cutting extra services is probably one of the oldest tricks in the book of saving on shipping costs. You don’t even have to hire a lawyer for your small business to know that. Depending on the value of the product you’re sending, shipping insurance can be a big factor. So, if you really do need this service, think about switching to a third-party provider.
They’re usually cheaper than going with your shipping carrier, and sometimes you can even get to the half of a price you were paying. Of course, this applies to high-value items. If you’re shipping lots of cheap stuff, we recommend not getting it in the first place.
Although it may sound strange, prepaid shipping is a thing and it can save you up to 20% of your shipping costs just by purchasing a certain number of shipping labels upfront. Of course, you don’t have to affix them to the box before something needs to go out, so it’s a win-win situation. This doesn’t save you just the money, but also time. Especially if you’re shipping lots of items at all times.
And the last thing on our list of ways to trim shipping costs is the hybrid services. If you haven’t heard about them, things like UPS SurePost or FedEx SmartPost are designed to pick up your orders and then work with other companies to get them to their destination. It’s an amazing way to keep your costs down as it can be as much as 50% cheaper than the traditional system. However, slower delivery is a thing that you’ll have to accept.