E-commerce involves a lot of shipping. However, many businesses worldwide have struggled to cope with ever-increasing shipping costs. Due to increased demand in e-commerce worldwide, shipping companies revise their shipping fees annually, and in most cases, result in even higher shipping fees.
What you should know is that shipping costs involve many variables. Besides hidden fees, primarily from in-house fulfillment, may further hike the shipping cost. That’s why controlling the shipping cost proves challenging. In most cases, businesses find themselves in a dilemma of offering the lowest shipping rates. Doing so may negatively impact their profit margins.
Learning how to reduce the shipping cost is the best move for any business. Below, we take you through a step-by-step guide on how you can effectively reduce shipping costs. Read through.
8 Factors that Can Help Reduce Shipping Costs
There are many ways you can reduce shipping costs. Below are the common ways to reduce shipping costs without compromising on profit.
Reduce Your Packages’ Weight
The weight of the package significantly impacts the shipping cost – the heavier the package, the higher the shipping charges. Reducing the weight will save you a few cents. The few cents you save per package can help you save more money in the long run after many shipping rounds.
But how do you reduce package weight? Consider the tips below.
Pack your shipment in corrugated boxes: Corrugated boxes are lighter than the typical cardboard boxes. The air-filled grooves between these boxes’ outer and inner layers make them lightweight. In addition, it is strong, protecting whatever you ship.
Use lightweight packing material: You have unlimited options to choose from when it comes to packing materials. However, you must be careful when selecting the ones for shipping, as some are heavier. Consider bubble wrap, excelsior, air pillows, foam inserts, and packing paper. They are lightweight and may reduce the shipping cost.
Design a custom shipping package: Design your shipping package to match the shape of the products you ship. Doing so means you’ll use less packing materials. Customizing your packing material also saves a lot when you reuse it to ship high-selling identical items.
Also, consider reusing old packing boxes. If you have old solid boxes, use them to ship your items, especially when sending gifts to family members and friends.
Use Reputable Shipping Companies
There are many shipping companies. The shipping cost varies from company to company, with some charging very high shipping fees. However, reputable shipping companies charge competitive shipping costs, with some offering free shipping. For instance, ShipSimple is one of the many reputable companies you can trust. They have quality shipping services and affordable shipping fees. In addition, ShipSimple customers enjoy exclusive discounts on bulk shipping. This feature significantly reduces businesses’ expenses on shipping services, increasing their profit margins.
Negotiate With Several Carriers
As many shipping services face stiff competition from similar companies, you’ll expect variations in their quality and fees. What one shipping company charges to ship products to a given destination differs from what another will charge to ship the same products. The mistake many businesses make is committing to one shipping company without considering what other companies charge. Avoid sticking to the first shipping carrier you encounter. Instead, explore the market widely and consult with several shipping carriers before deciding the ones to ship your products.
Get Third-Party Insurance
When shipping valuable products, you must insure them. You can use your shipping company to insure your shipments. However, their charges are usually expensive, which may increase the shipping charges, significantly reducing your profit margins. The best alternative is to use a third-party insurance company.
While you’ll typically incur around $0.90 for every $100 of goods you insure with shipping companies, you can save up to $0.35 per $100 of goods insured when you opt for a third-party insurance company. The difference may seem minimal, but you’ll realize how huge your savings are when you ship in large volumes.
Consider Online Payments
Many people don’t know this trick, but you can save money when you pay for shipping online! Companies like USPS let their customers enjoy up to 16% off when they pay for shipping online. This is for customers who opt for USPS priority mail orders. You can save even more when you opt for Express Mail. Customers who opt for this shipping category enjoy up to 60% off of the shipping cost. Since you ship several times a month, the small savings you make per shipping will accumulate to huge savings, allowing your business to record positive figures in the accounting books.
Another reason you should opt for online payment is delivery confirmation and free pick-up services.
Take Advantage of Discounted Shipping Rates
Major carriers give customers discounted shipping rates to relieve them of high shipping costs. For instance, UPS, USPS, and FedEx give small businesses envelopes and shipping boxes for free or at a discounted price.
Shipping companies calculate their shipping discounts based on the shipping volume. However, those who ship small volumes monthly can also enjoy these discounts. You can pledge loyalty to one shipping company for a negotiated volume discount.
Another trick is buying packing materials in bulk upfront. Buy airfill, dunnage, boxes, and other packing materials in bulk at discounted prices to save money.
Whenever seeking shipping services, look for the lowest shipping cost. However, this shouldn’t mean a compromise on the shipping services’ quality. There should be a sustainable balance between the two. Also, the lower or discounted shipping cost shouldn’t affect the delivery time.
Choose Prepaid Shipping
When you prepay for shipping services, you’ll enjoy a discount. With prepaid shipping, you may save up to 20% on the shipping cost. Consider buying many shipping labels upfront and putting them on packages awaiting shipping. This means that you won’t have to pay for individual shipments when their shipping time comes.
This trick is ideal for businesses that ship packages with identical weights now and then.
Opt for Poly Mailers
Poly mailers are ideal for shipping non-fragile items. For instance, poly mailers are a better option when shipping clothes than boxes. These packing material takes less space, reducing the packing cost in the long run. Also, you can use conventional tape to seal the poly bags.
How Outsourcing Fulfilment to ShipSimple Reduces Shipping Costs
E-commerce shipping costs continue going up year in and year out. Many businesses still struggle to navigate this vice that reduces their profit margins. The best solution for such businesses is partnering with a fulfillment company.
ShipSimple is one reputable fulfillment company you can opt for. We have quality and professional shipping services, where we ship on behalf of businesses and charge lower shipping costs. In addition, we offer other services, including but not limited to warehousing, inventory management, and e-commerce fulfillment.
Reducing shipping costs is our primary focus. We aim to see large and small businesses ship their merchandise swiftly and realize higher profit margins. Therefore, we practice the following to realize low shipping costs for businesses.
Offer free packing
Shipping discounts for bulk shipments
Bring fulfillment locations closer to your clients
Reduce Your Shipping Costs Today!
When you venture into business, e-commerce to be specific, you must incur expenses. Shipping costs are one of the expenses e-commerce companies must pay attention to. How you manage and reduce these expenses will determine your business’s success. Without proper management, shipping costs can retard your business, as it will keep eating at your profit margins.
However, with these tricks in mind, you can navigate shipping costs and significantly reduce them to realize higher profits. The one crucial decision that will significantly impact your shipping cost is the shipping company you choose. ShipSimple should be your ultimate shipping company. You can save a fortune with our affordable shipping, free parking, and discounted shipping rates.
Sign up with ShipSimple.ca to begin your journey of low shipping costs. Say no to high shipping costs starting today!
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