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Cutting Expenses- 5 ways to Reduce Shipping Costs

April 2, 2019 Courier

Does your business rely on e-commerce sales to stay afloat?

In 2018, U.S. retail e-commerce sales were $504.6 billion, a figure projected to substantially increase in the coming years.

This is great news for online retailers who could now be on a more competitive footing than physical store retailers. But like any other business, online retailers, too, have to look for ways of reducing overheads.

E-commerce shipping costs have soared, and many businesses are struggling to keep this overhead down. Cutting these costs can help to increase your business’s profitability.

Here are 5 ways to reducing shipping costs so that you can reduce overheads.

1. Negotiate Shipping Rates with Your Carriers

Without the shipping volumes of large retailers like Amazon, most retailers don’t enjoy the negotiating power that could score significant discounts with commercial carriers. But this shouldn’t discourage you from negotiating the best shipping rates for your business.

The shipping industry is highly competitive and carriers have an incentive to offer the best deals to their customers. Request quotes from multiple carriers to find out who has the best rates.

Let the carrier understand that your business is focused on reducing its overhead costs and that is why only carriers with lowest rates will win. 3PLs and carriers are looking to grow their business and they find small profit margin better than not having business at all.

You can also use online shipping platform to ship products and get some discounts out of it. The best thing with these online shipping platforms is that they are integrated with most e-commerce websites.

Once your website is integrated with a ship station, you can enjoy shipping discount.

2. Outsource Your Top Selling Items to a Fulfilling Partner

Handling your shipping in-house can be a challenging task, especially if there are some products in high demand. Consider outsourcing your top sellers to a reliable partner.

A courier service with the right qualities will help to boost your sales and increase your competitive advantage.

Settle for a partner who will not make you start worrying about compounding fees for little services such as packing, labeling, picking etc. There should be only two fees: Fulfillment and storage.

The total cost to outsource will be determined by factors such as your geography, current sales, and the amount of inventory you hope to store.

3. Consolidate Multiple Orders Whenever Possible

Whenever possible, your business should consolidate multiple orders into a single shipment. Always aim to minimize the number of packages you receive and send.

Planning out how your orders are arranged for order processing or sales can go a long way in ensuring the efficient delivery of orders.

Consolidating orders will reduce your overhead costs and reduce the amount of money your customers spend on products they buy from you.

When supplies are consolidated, you’ll spend less time receiving and handling orders.

4. Use Flat Rate Shipping

Establish the average cost per package and set a flat rate shipping costs for your customers. You may consider providing flat – rate boxes free. This will help you reduce your shipping cost.

Make sure your business has competitive rates and the packages you send arrive at their destinations on time.

Carriers determine flat rates by how far they transport the package. This is broken into shipping zones. Your shipping representative should explain costs for shipping based on varying zones. This way you can compare prices to determine the best rate.

Flat rate shipping helps to eradicate cart abandonment. If customers know the rate for shipping each commodity before they enter the checkout screen, most likely they will proceed to purchase.

As an online business, you should be honest about the shipping fee for all your orders.

Customers who expected free shipping on a package then end up paying a shipping fee may feel duped. This may hurt the reputation of your business.

If your business qualifies for flat rate shipping, ensure your customers know about this option. Promote it on your website. Remember that it is not necessary to ship packages in boxes all the time.

If the product you’re shipping can be folded, for instance, T-shirts, then you can use poly mailer instead. Poly mailers are cheaper and you can get them free.

5. Reuse Packaging from Your Suppliers

If your business sells fragile products that need to be handled with care, there is a high chance you spend a lot to protect your customer’s orders.

Whether it’s crinkle paper, bubble wrap, or packing tape, they all increase your overheads.

If the merchandise you receive from your suppliers comes packed in boxes, you can reuse the boxes instead of throwing them away, especially if they’re still in good condition.

Always keep in mind that reducing ship cost is not only focused on postal rates. It is also about the supplies you use to mail your packages.

Some supplies like packing tape must be new, but you can improvise other packing supplies.

Create a Strategy to Reduce Your Shipping Costs Today

There’s stiff competition in E-commerce. Shipping rates are also increasing each day. You need to create a shipping plan that will see you substantially cut your shipping costs.

The best thing is that you can be creative when coming up with such a plan. Consider implementing the above-discussed tips to see if you’ll be able to make savings on your shipping costs.

Contact us if you’re looking for a professional courier service. We provide both local and nationwide courier services to our customers.