How Small Businesses Can Save On Shipping Costs
Shipping costs are a major expense for many small businesses. Every dollar you waste on shipping is money that can’t go to the bottom line. Even worse is the cumulative effect, since overpaying a little here and there is multiplied by thousands of packages or more shipped per year.
Let’s look at how small businesses can save on shipping costs regardless of what you ship and how much you send out.
Shop Around
You may be using a major carrier because they once offered you a good deal. However, there may be cheaper options out there. Furthermore, your business may have scaled up its shipping, and now you qualify for better shipping rates with other carriers. Take the time to shop around and try to negotiate better rates with multiple carriers. You may even save money with the current carrier because they know that someone else is vying for your business.
Another option is investigating regional carriers. They’re often cheaper than the national brands, though you need to know that their network isn’t as broad. Be careful, too, about dividing your business between too many carriers or you’ll lose your bargaining power.
Don’t forget to shop around on insurance. Carriers charge just under a dollar for every $100 of insurance. Yet there are third party companies that charge up to half that on insurance for your packages. These savings really add up if you’re often shipping expensive items.
Ask About Discounts
One way to save money is to ask about discounts. These discounts could come from associations that your business is a member of, or a volume discount if you agree to send them a lot of business. Services like Unishippers allow you to take advantage of group buying power when seeking quotes from shipping services. They offer discounts on everything from domestic and international shipping to insurance.
Ask Suppliers to Use Your Shipping Number
Instead of having suppliers ship your product and bill you for it, find out if they can use your shipping number with your suppliers. This increases the shipping volume you have with the carrier, possibly leading to a greater volume discount. It also prevents shippers from charging you more for shipping than they actually paid. Then there’s the fact that it streamlines the administrative oversight of shipping, since everything is on your account and visible to you. You can make using your shipping number a requirement on your purchase order to force suppliers to use it.
Use Automated Tools
Use online shipping to print out postage and generate tracking numbers. This allows businesses to save a lot over being serviced at the counter. You could also access the shippers’ services like scheduling free pickup, getting delivery notifications automatically, and online payment for services.
You should consider investing in a label printer as well. A label printer will allow you to accelerate fulfillment times and save on packaging slips.
Consider Using Shippers’ Packaging
One of the downsides of using your own packaging is that it may not fit nice and neat in the shippers’ system. This can result in additional dimension fees, especially if your packages are larger than their standard sizes. Try to use packaging provided by the shipper. Note that this isn’t necessarily an either/or situation. You may be able to put your existing smaller package inside the shipper’s packaging, allowing you to ship at a lower rate while providing more protection for the goods you’re shipping.
Reuse Packaging
If you’re a budding e-commerce business, you may already know how expensive packaging can get. One of the ways you can save on packaging is by simply reusing some of the packaging you get through the mail. Things like boxes, bubble wrap, and packing peanuts can make a dent in your budget over time, so any occasion you get to reuse any packaging will allow you to save.
Opt for First Class Mail when Possible
There are multiple ways to ship items, and the best option will depend on the shape, weight, and size of what you’ll be sending. If you ship tangible items, then you will usually have the choice between USPS First Class and Priority Mail. In most cases, First Class will be cheaper, so consider the option if your items qualify.
Invest in Prepaid Shipping
Prepaid shipping can be an investment. You could get a discount of up to twenty percent by buying shipping labels in advance. This is a good deal if you’re sending out packages of the same size and weight on a regular basis, so you know the shipping cost in advance.
Make Sure Customers Pay for the Services They Receive
Make sure your customers are paying for the shipping service instead of charging a flat rate even though the customer may be asking for the more expensive weekend delivery option. Factor in extra fees like fuel surcharges, priority shipping or requiring a signature. Ensure that they’re paying more when asking to have something shipped overseas. If you don’t make them pay for these extra services, it will come off your bottom line.
Use Zone Skipping
This is a very good way to save on shipping if you have to constantly ship heavy items or items with high dimensional weight across the country. Zone shipping allows you to consolidate your packages in one LTL shipment going to a distant area. Your packages will then be sent to a consolidator in the region where the items will have to be distributed.
The consolidator will then ship the packages to different addresses from their distribution center. This will allow you to save more money than sending individual packages. However, note that this won’t work for express packages, but it could eventually help you save more money and make up for the costs of express shipping when it is required.
Small businesses have more ways to save on shipping costs than they realize. And implementing best practices can save businesses of any size a significant amount of money.