How To Reduce Costs When Shipping Your Business Goods

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Close-up image of mail worker checking information on parcels

Shipping fees aren’t cheap, and your overall shipping expense can significantly impact your business’s profitability. With carriers and service providers increasing their shipping rate every year, the demand in the eCommerce industry causing a shortage of everything from warehouse space to truck drivers, and even eCommerce giants continuing to raise the bar for faster and free shipping, small-time retailers and businesses now find it more challenging to fulfil orders while keeping their expenses down.

Fortunately, there are several ways to reduce shipping costs for your business goods. This article shares some innovative strategies to help keep your shipping costs at a minimum to ensure your small business’s profitability.

Consider Shipping Distance

One of the biggest factors that impact your shipping rate is the shipping distance. Simply put, your total shipping cost is often determined by shipping zones, which are geographical areas that your carriers ship to.

This means that the farther away the shipping destination is, the more expensive the shipping costs can get. And so, unless you’re ready to go global, avoid shipping internationally or to farther areas. In particular, shipping internationally, for instance, from the US to the UK, can incur high costs, including customs charges. Take note, however, that there may be limited strategies on how to avoid customs charges from USA to UK.

Regardless, choosing to limit the geographical area you serve can help reduce the shipping distance, thereby, helping you save costs over time with cheaper shipping options.

Delivery man delivering holding parcel box to customer

Reduce The Package’s Weight And Dimensions

Like shipping distance, the weight and dimension of your package can impact your shipping costs. In most cases, the heavier and bigger your packages are, the more costly they can be to ship unless you’ve opted for flat-rate shopping.

If you’re using your company’s packaging materials, such as custom boxes or bags, and shipping everything from your shop or home, consider getting a postage scale. This could give you a better idea of the weight of your packages, allowing you to calculate more or less how much your shipping costs will be.

From there, consider finding ways to reduce the weight and dimensions of your packages to minimize shopping costs. For instance, if you’re shipping a small item, consider packing it in a pouch or smaller containers to help reduce weight and dimensions instead of having fixed-size packaging. Moreover, you could also use lightweight packing materials, such as corrugated boxes.

Use Packages Provided By Carriers

Generally, most carriers offer their own packaging to sellers, and utilizing them can help reduce shipping costs. While custom packaging helps with your branding and overall product presentation, note that some providers may charge additional fees if the size of your parcels exceeds their standard sizing. With that, it may be ideal and cost-efficient to use the packaging provided by your carrier to save cost and time.

Negotiate With Carriers

Looking for the best carrier to partner with is no easy feat. For one, not all providers are the same and offer the service you’re looking for. Hence, one of the mistakes you could make as a business owner is to stick with the first shipping carrier you talk to.

Ideally, listing your options and comparing their rates and offers can help ensure you choose and work with a more cost-effective partner. For instance, some shipping carriers adjust their rates based on the volume of the goods you’re shipping. For some providers, the higher volume you ship, the lower the price. While for others, it’s the opposite.

That said, before signing up with a carrier, take your time to inquire from different providers within your locality to get more insights into your options. Also, familiarize yourself with various factors affecting shipping costs, such as shipping distance and the weight and size of packages. From there, you can use this information to negotiate a bargain and possibly get discounts.

Include Shipping Fees To Your Product Pricing

Another way to reduce your shipping expenses is to add them to the computation of the final price of your product. Your product’s price can absorb the full shipping fee, and you can market free shipping to your customers. Or perhaps, you can bill your customers half of the shipping fee and add the remaining half to the product’s price.

On the other hand, you can implement a promo wherein if a customer meets a minimum purchase or order value, they can avail of free shipping. These approaches can be a good way to offset and minimize your shipping costs.

Takeaway

Shipping is a necessary process for today’s online businesses. Unfortunately, shipping can take a

huge bite on your profits. And as such, learning how you can reduce your shipping costs can make a huge difference in terms of your bottom line. Optimizing your shipping costs with the above tips can be a good start toward a more profitable business.


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