Companies have many costs to meet in keeping the business running. Among them are shipping costs. Shipping fees don’t come cheap, and each year, carriers raise the rates. Several variables come into play when setting shipping fees, but resourceful entrepreneurs are actively finding ways to reduce the sting.
Here’s how to save money on shipping costs.
Reduce the Shipping Distance
Most shipping fees go up because of the shipment distance. The local shipment distance depends on shipping zones, which fall from Zone 1 to Zone 8. The zones refer to the geographical areas where carriers send parcels and the charges for each.
The bigger the distance, the higher the shipment costs a business incurs. If companies can eliminate shipping to higher zones, they can save a considerable amount of money.
In the same breath, consider doing business with regional carriers. They provide the same quality services as UPS and FedEx but at much lower costs.
Negotiate with Multiple Suppliers
All shipping companies base their pricing schedules on the volume of the cargo to ship. The larger the volume, the lower the rate goes. Unfortunately, most small businesses don’t realize this, and they also lack negotiating power.
If a business has a large volume of packages to ship, it should compare prices and persuade carriers to offer more favorable rates. There are several online resources where they can learn more about how to do this successfully.
Reduce the Dimensions of Packages
Shipping heavier and larger items can cost a lot more unless the carrier charges a flat-rate shipping fee. To reduce the cost in this perspective, consider investing in a postage scale to help predict prices and also buy the right shipping labels.
It’s also recommendable to use the packaging materials provided by the carrier. Using non-standard packaging can cost more in dimensional fees if it exceeds the set size regulations by FedEx and UPS.
Consider Prepaid Shipping
You can cut FedEx and UPS shipping costs by entering into a prepaid shipping agreement. This can earn you a discount rate of as much as 2%. Buying a large quantity of shipping labels upfront eliminates the need to pay for each package when sending it out.
However, this arrangement only works well when a business knows that it’ll consistently send out the same weight packages. Remember, the structure works well only when the shipping costs can be determined in advance.
Check Out Offers on Marketplaces
The eCommerce platform a business uses to power its store may offer bulk discount shipping services or programs. Some features that provide such discounts are built-in features, integrations with fulfillment software, shipping apps, and real-time carrier rates. This way, a business gets better rates and fulfillment services.
Insure with Third Parties
Consider cutting extra services like insurance to reduce the service cost. Depending on the price of the product you’re shipping, third-party insurance can work just fine. This arrangement is cheaper than insuring with the shipping carrier.
Shipping costs are unavoidable business costs for eCommerce businesses. However, having the right shipping strategy can help reduce shipping costs. With the savings made from the reduced fees, a company can ultimately invest in growing the business.