11 Smart Ways To Reduce Shipping Costs for Small Businesses

11 Smart Ways To Reduce Shipping Costs for Small Businesses

Welcome to the fascinating world of online shopping! With the popularity of online purchasing, more and more companies are using e-commerce to connect with clients throughout the world. The way we shop and conduct business has been completely transformed by ecommerce, from small boutique shops to large global enterprises. But along with e-numerous commerce's benefits come new difficulties, one of which is delivery. In this article, we'll go through the specifics of e-commerce shipping, including how to calculate shipping prices and choose the best carrier. We'll also offer advice on how to improve customer satisfaction by streamlining your delivery procedure. Now grab a coffee, and let's get started!

Know the basics of shipping cost

Shipping costs in ecommerce entail all the costs that are associated with transporting goods to clients, such as 

• Packaging costs which include the cost of sellotapes, packaging cartons and stickers

• Courier fees for pickup and delivery

• Fees paid to different governments in international shipping

For any online shop, shipping might be an overwhelming burden. Once a sale is made, you have to spend time producing, packing, and shipping your goods. But, it is up to the shipping company to deliver your product on schedule and in pristine shape once you have turned them over to them. Your consumer can have a negative opinion of you if the package is late or comes damaged.

Determining and disclosing your website's ecommerce shipping costs is essential as a business owner. A clear shipping policy that explains shipment timeframes and charges can help customers who frequently have shipping-related issues by setting their expectations and reducing complaints or misunderstandings. 

You may convince your clients that they can rely on your shop to fulfill their items with care and effectiveness by developing a dependable shipping policy.

11 ways e-commerce stores can reduce shipping costs

Here are the top ways in which you, as an ecommerce store owner, can reduce your shipping costs.

1. Decrease the shipping distance

For many businesses, shipping fees can quickly grow to be a considerable expense, especially when sending goods to far-off or remote areas. Domestic shipments in the US are separated into eight shipping zones, with Zone 1 serving as the origin zone from which the first departure occurs. The shipping charges increase as the zone number rises since the shipment must travel a greater distance.

Where possible, try to avoid sending to higher zones to lower your shipping costs. If you have several warehouses or fulfillment centers, for instance, you can strategically place them in areas that are nearer to your clients, cutting down on the distance and shipping expenses for each shipment. To decrease the total number of shipments, you can also provide incentives to consumers who select slower shipping alternatives or group several items into a single transaction.

Using a third-party logistics provider (3PL) with access to cheaper shipping rates or negotiated arrangements with carriers may, in some circumstances, be more cost-effective. You may streamline your shipping processes and ultimately reduce shipping expenses by utilizing the knowledge and resources of a 3PL.

2. Weigh your packages and reduce the dimensions

Weighing your packages and making the most of their dimensions are two of the most efficient strategies to save your shipping costs. By making your packages lighter and smaller, you can reduce the weight and size of your packages and significantly lower the shipping costs that shipping carriers generally charge for heavier and larger packages.

Image reference:- https://www.ups.com/assets/resources/webcontent/images/shipment-size-weight-measure-package-B-1224353-Q421.jpg

To precisely weigh your packages, start by making a dependable digital scale your first purchase. This will enable you to choose the carrier and shipping method that will be most affordable for each shipment. You may also think about choosing packaging materials that are both lightweight and strong enough to safeguard your goods while they are being transported.

Using the proper size box or envelope for each shipping is another approach to reducing the size of your products. Avoid utilizing excessive packaging because doing so can result in wasteful spending and lost space. Use packaging instead that tightly fits your products while still leaving space for protective elements.

You may lessen your environmental effect by using less packaging material and saving money on transportation by weighing and shrinking your products. It benefits both the environment and your company.

3. Negotiate for discounted shipping rates

Negotiating discounted rates with your carriers is one of the best strategies to save your shipping costs. Businesses that ship often or in large quantities can qualify for volume discounts or other special rates offered by shipping firms. You can reduce shipping costs significantly by haggling for a lower price, which could result in greater earnings for your company.

Image reference:-https://blog-assets.freshworks.com/freshdesk/wp-content/uploads/2018/08/Art-of-negotiation-in-customer-service.png 

To begin, get in touch with your shipping provider or carrier and enquire about any discounts or price schemes they may be offering. To assist them in determining whether you qualify for savings, be prepared to supply information about your shipment volume, frequency, and destinations. Another option is to collaborate with a third-party logistics provider (3PL), who has connections to carriers and can bargain for lower prices on your behalf.

It's crucial to keep in mind that haggling over shipping costs takes tenacity and forbearance. Finding a solution that satisfies your needs may take some time and work, but the potential cost savings can make it worthwhile. To discover the greatest bargain for your company, don't be scared to shop and check rates from several carriers.

4. Don't stick with one, consider building multi-carrier strategies

Building a multi-carrier strategy should be taken into consideration if you want to lower your shipping costs. You may optimize your shipping operations and cut expenses by expanding your carrier options and by taking advantage of each carrier's advantages and disadvantages.

One carrier might, for instance, provide better costs for ground delivery, while another would provide better rates for express or international goods. You may reduce the cost of each cargo while still satisfying the delivery expectations of your clients by strategically utilizing both carriers.

When service with one carrier fails in a multi-carrier scenario, you can switch to another. This is helpful in the event that one carrier stops serving particular areas, is careless and loses a lot of parcels, raises fees, or is hampered by severe weather.

5. Switch from boxes to poly mailers

It can be much less expensive to ship orders in a mailer envelope or poly bag than it is to ship them in a box if you offer small, non-fragile items like apparel. They require less packing materials, such as tape and bubble wrap, because of their reduced size, which also frees up less space on a delivery vehicle.

6. Stay on top of shipping carriers' pricing changes

It's crucial to monitor price changes made by your shipping providers if you want to successfully lower your shipping costs. Fuel prices, demand, and carrier policy are just a few of the variables that might cause changes in carrier rates. 

Signing up for carrier newsletters or email notifications is one way to remain informed. You can stay ahead of price changes because many carriers often alter their rates and offerings. 

Also, carriers may impose surcharges during certain peak times (such as the holidays, the fourth quarter, or as we saw during the early stages of the COVID-19 outbreak) when there is a sudden increase in the volume of goods being transported. They also throw on extra fees every year, like large package surcharges and signature levies.

You can make wise judgments regarding your shipping operations and lower your overall shipping costs by keeping track of pricing changes and evaluating your shipment data.

7. Encourage your customers to place orders early

Understand that to ensure that gifts arrive on time over the holidays, and each carrier has its own set of cutoff times for each service. To avoid paying more for expedited shipment, clients who want to save money on shipping should place their orders as soon as possible.

You can reduce delivery expenses by encouraging your clients to submit their orders as soon as possible. You may more effectively arrange your shipment schedule and steer clear of rush shipping fees by giving customers a specific delivery window and rewarding early orders. 

Offering free or reduced shipping for orders placed before a specified date will encourage customers to place their orders sooner and help you avoid paying for expedited shipping. 

Encourage early ordering to avoid stockouts and delays that could result in dissatisfied consumers and higher shipping expenses. Promoting early purchasing is a straightforward but efficient strategy to lower shipping costs while enhancing customer satisfaction.

8. Choose packaging provided by the carrier

Using the packaging that is provided by your carrier can enable you to reduce the cost of shipment. Free packaging is frequently provided by carriers, which can help keep the price of boxes and other packaging supplies down. Using the carrier's packing will help you avoid extra charges for large or overweight items by making sure your packages adhere to the carrier's size and weight constraints. 

Using the carrier's packaging can also help guarantee that your products are securely fastened and safeguarded during transportation, lowering the possibility of loss or damage. To save money when shipping with a carrier and guarantee that your items reach promptly and safely, think about utilizing their free packaging alternatives.

9. Choose a provider with pickup and delivery services

You can cut down on time and costs associated with shipping by selecting a shipping company that offers pickup and delivery services. You can plan a pickup straight from your company to avoid having to drop off packages at a carrier site, saving you time and money on transportation. 

Furthermore, delivery service providers can provide your customers with more practical and affordable shipping options, such as next-day or two-day delivery possibilities. You will improve customer satisfaction and save money on shipping costs by selecting a provider with pickup and delivery services.

10. Pass on the charges to customers

For small firms, shipping costs represent a considerable expense. Consumers frequently refuse to pay for shipping, and sometimes passing on the shipping charges to customers can be detrimental. There are, however, ways to incorporate delivery fees into your products.

One choice is to increase the product price to cover the cost of shipping and provide free shipment. However, this strategy works best for companies that sell high-priced goods. Another choice is to raise the price of the product a little bit while charging clients a lower shipping fee. You may, for instance, charge buyers for half the cost of shipping and include the other half in the cost of the item.

Another choice is to charge all customers a flat delivery price based on the average shipping cost of all of your orders. For free or quick shipment, you can also set a minimum purchase threshold on your website.

You may determine whether it's reasonable to require customers to pay return shipping fees by keeping an eye on the sentiments of your customers. You can monitor your social media handles for this. Angry customers normally vent their anger here, and you can take swift action if you see that your new shipping policy is not working.  

11. Partner with a third-party logistic service provider

For small businesses, partnering with a third-party logistics (3PL) service provider can be a wonderful method to cut shipping expenses. Businesses can benefit from the warehousing, transportation, and fulfillment services provided by 3PLs since they are experts in logistics and supply chain management.

Small firms can take advantage of economies of scale by collaborating with a 3PL, as the 3PL can negotiate reduced shipping rates due to their bigger shipping volumes. In order to cut shipping expenses, 3PLs can also assist firms in streamlining their delivery routes and consolidating shipments.

Small businesses can free up time and money by outsourcing shipping and fulfillment to a 3PL, allowing them to concentrate on their core skills and expand their operations.

When choosing a 3PL service, it's crucial for small firms to exercise due diligence. They have to search for a supplier who can satisfy their particular shipping and fulfillment requirements and has a reputation for dependability and customer service.

Wrap up

A company's bottom line may take a hit due to high shipping costs, but there are many resourceful ways to cut back on these expenditures. Small businesses may take charge of their shipping costs and boost their bottom line by doing things like negotiating cheaper rates and using multi-carrier methods. Companies can save money while still satisfying their clients by adopting some or all of the practices that we mentioned in this blog. 

Keep in mind that in ecommerce, every dollar counts, so don't be afraid to try different approaches and make adjustments as necessary to reduce shipping expenses.