How to Save Money on Shipping Rates (It’s Easier Than You Think!)
There’s no doubt that for online retailers, shipping costs are one of the biggest expenses. And with oil prices rising, they’re not getting any cheaper. But that doesn’t mean there isn’t money for you to save. You just need to be a little creative! Cutting costs on shipping rates is more than just the price you’re paying to UPS or FedEx. There are plenty of other factors involved, and every part of the shipping process should be looked at carefully.
Ways to cut costs
Shipping containers - Could you be using lighter, smaller boxes, or for smaller items, padded envelopes instead of boxes? Heavy boxes add weight and weight adds cost. Many times, switching boxes is just enough to lower your rate down to the next level! Also, shop around for prices on shipping containers to see if you are getting the best rate possible. If you haven’t compared costs in a while, chances are you’re paying too much!
Reshipper boxes - Are some of the products in your inventory already packaged in reshippable boxes? If so, then they don’t need an outer box to ship in - unless a customer ordered multiple items. Over time, that alone could save you a substantial amount of money - both in materials and shipping costs!
Packing materials - Is your warehouse staff stuffing every order with packing materials - whether or not the items are fragile or breakable? There have been plenty of stories of customers receiving T-shirts or pillows packed in a box full of packing peanuts. If that’s the case, then you’re throwing money away. Only delicate or easily damaged items need packing material. You should have your inventory broken down into what needs packing material when shipped and what doesn’t. Doing that could prove to be a big money saver!
Shipping rates - It’s possible that just a quick call to UPS, FedEx or DHL could lower your shipping rates significantly. Give each of them a call to see if you can negotiate better rates! Be sure to match their rates against the USPS to see what works best for your company. You might decide to use different shippers, depending on which region a customer is in. It might just save you a considerable amount of money!
Inventory - Making sure you are always in stock means never having to split up an order and take the hit on two shipments. Having an up-to-date inventory system should do the trick. They’re easy to find and inexpensive too!
Be on top of your expenses
It pays to be aware of your shipping rates and shipments. Otherwise, you might unknowingly be paying several dollars extra for a shipment - each and every time! Make a spreadsheet that divides up the different shipping companies with the different regions of the U.S. and the other countries you ship to. Price out your average shipments to each of the regions. Most companies are surprised to see the difference in prices from shipper to shipper, region to region. You might decide to use different shippers for different regions, or ask one shipper to match another’s rates.
Posted on December 18th, 2007 in Finance and Accounting, Starting a Business |
