Updated : Feb 5, 2024
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8 Ways to Reduce Shipping Costs Strategically and Boost Your Savings

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Drashti bhadesiya
reduce shipping costs

8 Ways to Reduce Shipping Costs Strategically and Boost Your Savings

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Are you aware that a business’s total expenditure can include up to a quarter of just shipping costs? That’s a pretty big bite out of your profits, isn’t it?

As someone who runs a business, you’re always on the lookout for ways to cut costs and pump up your savings. In an e-commerce business, it is important to reduce shipping costs to save the maximum money and time, shipping is one area that’s brimming with chances to save. We’re going to walk you through some smart ways to cut these costs while still delivering the excellent service your customers are used to.

Brace yourself for uncovering hidden savings in your shipping process.

Key Takeaways

Did you know that shipping costs can swallow up to a quarter of a business’s total expenses? Yes, it’s quite a dent in your earnings, right?

  1. Negotiate with Multiple Carriers: Don’t settle for the first shipping rate you get. Negotiate with several carriers to find the best rates. Volume discounts can significantly lower costs if you ship in bulk.
  2. Use Hybrid Shipping Services: Consider using hybrid services that combine the efforts of major carriers with local postal services for the last-mile delivery. This can be cost-effective for small to medium-sized packages.
  3. Optimize Packaging: Use the smallest possible packaging that protects your product adequately. This can save on dimensional weight charges, which are based on package size and weight.
  4. Prepay Shipping: Many carriers offer a discount for prepaid shipping. If you have a predictable shipping volume, prepaying can offer substantial savings.
  5. Consider Third-Party Insurance: Carrier insurance rates can be higher than third-party options. Shop around for insurance to find cheaper rates, especially if you ship high-value items.
  6. Use Shipping Software: Shipping software can compare rates across carriers in real-time, offer discounted shipping labels, and manage tracking. This automation saves time and money.
  7. Optimize Fulfillment Locations: If you ship nationwide or internationally, having fulfillment centers in strategic locations can reduce delivery distances and costs.
  8. Offer Consolidated Shipping: For customers who make multiple purchases, offer the option to consolidate orders into one shipment. This reduces costs and packaging use.
  9. Audit Shipping Invoices: Regularly auditing your shipping invoices can help you catch overcharges and errors. Carriers can make mistakes, and these can add up over time.
  10. Educate Customers on Shipping Choices: Offer various shipping options and educate customers on the cost vs. speed trade-off. Some customers are willing to wait longer for a lower shipping cost.
  11. Implement a Shipping Policy: A clear shipping policy can help manage customer expectations and reduce expedited shipping requests. Offering free shipping with a minimum order value can also increase the average order size.
  12. Analyze and Adjust Regularly: Regularly review your shipping data to identify trends, inefficiencies, and opportunities for further savings.

Get ready to find some unexpected savings in your shipping process.

Know your Shipping basics

To get the hang of shipping, you need to get your head around the basics first. For instance, have you ever thought about the importance of shipping zones? Understanding their role and how you can adjust them could save you a pretty penny. Once you’ve got the basic shipping stuff down, you’re in a good position to start cutting costs.

First off, let’s talk about shipping zones. Picture them as different areas on a map that shipping companies use to work out their rates. The further the zone, the more you’ll have to pay. So, if you’re keen on reducing your shipping costs, it’s worth exploring ways to avoid shipping to those far-off zones. One way to do that could be to team up with fulfilment centres that are positioned in closer zones.

Then, there’s the topic of custom packaging and Ships in Own Container (SIOC) methods. These are handy for optimizing dimensional weight, which is a fancy term for a pricing method that takes into account the weight and size of your package. Shrink the size of your packages, and voila, your shipping costs can also shrink.

How to reduce shipping costs? [8 Best Ways to Implement]

If you’re looking to trim down your shipping expenses, you’ve got a few great options.

First things first, try to keep your packages as light as possible. Less weight means less money spent.

Also, be mindful of your packaging size. If it’s too big, you could end up shelling out more than necessary.

And of course, keep an eye out for those sweet discounted shipping rates and special offers from marketplaces.

Mixing and matching services could also help you save a pretty penny.

✅ Reduce the weight of packages

Let’s chat about how to make your packages lighter. Trust me, this can save you a pretty penny on shipping costs.

Have you thought about getting a postage scale? It’s a super handy tool that gives you the exact weight of your package, helping you cut unnecessary shipping costs.

Did you know that packaging custom-made to fit your product can also help reduce weight? It’s like a bespoke suit, but for your items! Plus, it adds a charming personal touch to your business’s shipping. Cool, right?

Here’s another tip: Don’t throw away your old boxes and packing materials. Repurpose them! Not only does it help you cut down on the weight of your packages, but it’s also a great way to be green.

And, have you heard about ‘Ship in Own Container’ (SIOC) packaging? It’s a game-changer. You can scrap the need for extra boxes, which in turn, lightens your package weight and cuts down on shipping costs.

✅ Choose the right packaging size

Choosing the perfect packaging size can help you trim down shipping costs significantly. This is especially beneficial for small businesses where every single dollar matters.

Let’s talk more about this:

  1. Custom packaging: This is about crafting packaging that perfectly fits your product dimensions. It may require a bit more effort, but it can help you steer clear of additional dimensional weight charges and ultimately save on shipping costs.
  2. Smaller is better: Always aim for the smallest box that comfortably houses your items. Not only will this bring down the dimensional weight, but it also eliminates the cost of shipping space.
  3. Lightweight materials: Choosing packaging materials that are light but sturdy can help lower the overall weight of the package, leading to further cost savings.

✅ Grab the discounted shipping rates

Reducing your shipping costs can be a real game-changer, right? And one of the best ways to do this is to take advantage of discounted rates. You see, many shipping companies offer some pretty sweet discounts based on how much you ship. The more you ship, the less you pay per item. It’s a win-win situation.

What you need to do is sit down and have a chat with your shipping providers. Negotiate these discounts and you’ll see your shipping costs plummet. You’ll be amazed at how much you can save over time. But remember, it’s not just about saving money. You also need to make sure your shipping stays efficient and reliable.

Finding the best shipping rates doesn’t mean you have to sacrifice delivery times or your customers’ happiness. So, make sure you keep an eye on these discounted rates and take advantage when you can. It’s a clever way to save money and keep your business competitive.

✅ Checkout offers from multiple marketplaces

Looking to slash your shipping costs? Have you considered shopping around on different ecommerce sites and marketplaces? Here’s a little advice for you:

  1. Why not take a look at shipping rates from various marketplaces? You could stumble upon a much better deal that could make a big difference to your shipping expenses, especially if you’re running a small business.
  2. Have you compared shipping services on different platforms? Some might’ve bulk discount shipping services that could be a perfect fit for your business shipping needs.
  3. Don’t underestimate the potential of ecommerce platforms. A lot of them have real-time carrier rates and shipping integrations that could give you more options to save on shipping.

✅ Look for hybrid services

Did you know that hybrid shipping services, such as UPS SurePost and FedEx SmartPost, can help cut your shipping costs by as much as half? It’s pretty impressive, right? These services collaborate with other carriers to deliver your packages to sorting facilities or post offices for the final leg of their journey. It’s a smart way to manage your shipping costs effectively.

But keep in mind, while saving money is great, you can’t compromise on delivery speed. You have to ensure that the service you choose aligns with the volume, weight, and size of your shipments. If you play your cards right and use these hybrid services wisely, you could see a significant reduction in your shipping rates.

It’s a bit like solving a puzzle – find the right pieces that fit your business, and you could uncover substantial savings and efficiency. Just remember, it requires careful thought and analysis. But once you crack it, you can find the perfect balance for your business needs.

✅ Stay on top of shipping carriers’ pricing changes

Keeping tabs on the ever-changing pricing of shipping carriers is key to better managing your shipping costs. These yearly adjustments can have a pretty big impact on your small business, so it’s important to stay in the loop.

  1. Keep an eye on yearly rate hikes: The big carriers usually up their rates by about 5% each year.
  2. Be ready for extra fees: Carriers often sneak in additional costs like large package fees and signature-required charges.
  3. Re-evaluate your shipping rates: You might need to adjust your shipping fees to cover these rate hikes and extra charges or think outside the box to balance these costs.

Staying in the know can help you make smart choices to cut down on shipping costs and save some extra cash.

✅ Encourage your customers to place orders early

Here’s a handy tip to help keep your ecommerce business’s shipping costs down – encourage your customers to order early! This is a particularly useful approach during busy times or when you’re expecting a high volume of orders.

Letting your customers know the last order dates gives them the chance to get their orders in early. Not only does this ensure their orders arrive on time, but it also means you won’t need to fork out for pricey rush shipping.

Just bear in mind that things like labour shortages, bad weather, and public holidays can affect these deadlines.

If you line up your schedule with your logistics companies, you can make some big savings on shipping. So, don’t forget, getting orders in early is a great way to keep shipping costs down.

✅ Use Packages Given by Your Carrier

You know, there’s a smart way to save a pretty penny on your shipping costs. A lot of shipping carriers supply packaging materials at no cost. If you plan it right, you could shave off a good chunk of your shipping expenses and keep your budget happy.

Here are a few handy hints:

  1. Choose the packages your carrier gives out that are just right for your product size. This way, you can cut down the dimensional weight and, in turn, the cost.
  2. Don’t hesitate to snap up any free or low-cost packing materials carriers offer. Every little bit helps to keep your expenses down.
  3. If you’re shipping heavier items, check out the flat-rate shipping boxes your carrier provides. It could be a pretty cost-effective way to go.

✅ Look for Discounted Supplies

Looking for ways to cut down on shipping costs? Here’s a little tip – check out if shipping companies have any discounted, or even free, packing supplies. This could be a clever way to chip away at your expenses.

After all, as a small business owner, every saving counts, right? These deals are often part of the company’s customer service, and it’s a savvy method to keep your costs in check.

Another smart move is to buy your packing supplies in bulk – the savings can add up. Try checking out online platforms or markets that could offer you a better deal and fulfilment services. Tools like real-time carrier rates and shipping apps might also help you find these bargains.

Making thoughtful choices like these can help cut your shipping costs, and that’s good news for your bottom line.

✅ Pay for Shipping Online

If you run an online store, you know how shipping costs can eat into your profits. But did you know there are several smart ways to cut down on these expenses? Let’s chat about some of them.

First off, think about prepaid shipping labels. By paying for your shipping upfront, you could save up to 20%! How does it work? You buy a bunch of labels and stick them on your packages as and when you need them. It’s an easy way to keep costs in check.

Next up, consider using poly mailers instead of boxes for items that aren’t breakable. These lightweight, space-savvy mailers are a wallet-friendly alternative to traditional packaging.

And have you heard about hybrid shipping services? They could cut your shipping costs by up to half! Services like UPS SurePost and FedEx SmartPost team up with USPS to make deliveries more efficient.

✅ Choose Prepaid Shipping

Opting for prepaid shipping can be a savvy business move that could help you cut down your shipping costs by around 20%. How does it work?

Well, you buy a bunch of shipping labels upfront and stick them onto your packages when you need to send off an order. As you already know the weight and size of your packages, you can work out your shipping costs in advance.

This is particularly useful for small businesses looking to keep their costs down. Plus, it saves you time as you’re not scrambling to sort out shipping at the last minute.

If you team up with a company that has various fulfilment centres, you can also fine-tune your shipping options and strategically lower your shipping zones and costs. So, all in all, going the prepaid shipping route is a smart move when you’re figuring out how to minimize your shipping costs.

5 questions that can help save money on shipping

Want to save some cash on your shipping costs? Well, it’s all about knowing what questions to ask.

You might want to think about how much you’re charging for shipping right now. Is there another shipping company that could offer you a better deal?

What about the way you package your items – could this be improved?

It’s also worth considering where most of your orders are headed. Maybe a shipping or fulfilment partner could help you save some extra money.

Now, that’s worth thinking about, isn’t it?

1. How are you charging for shipping?

Let’s take a moment to chat about your shipping charges. It’s an area where there’s often a lot of room for improvement. Are you charging too much or too little? Getting it right is key. If it’s too high, customers might be put off, while too little can eat into your profits.

So, what’s the best approach?

  1. Flat Rate or Real-Time Rates? How about offering flat-rate shipping for certain products or orders? It’s a great way to cut down on shipping expenses. On the other hand, real-time carrier rates could be a game-changer, letting you choose the most affordable option for each shipment.
  2. Packaging Choices: Let’s think outside the box… literally. If you’re shipping small, sturdy products, consider swapping out boxes for poly mailers. It’s a simple way to trim down those shipping costs.
  3. Hybrid Shipping Services: Have you ever thought about using hybrid shipping services like UPS SurePost or FedEx SmartPost? They could help you slash your expenses by as much as 50%.

2. Have you tried another carrier?

Ever thought about changing your shipping carrier? You might be surprised by the savings you could make. It’s worth looking into other carriers and haggling for better rates based on how much you ship. This could significantly cut down your shipping costs.

Have you heard about the benefits of using carriers like FedEx and UPS? They offer prepaid labels and partnership programs which can be a real money-saver for small businesses. Plus, they’ve flat-rate shipping, which can be a cost-effective option, especially during busy times.

And that’s not all. You can use shipping platforms that work seamlessly with e-commerce platforms. These offer discounted rates and make the shipping process run more smoothly.

3. Are you using the right packaging?

You know, how you package your items can make a big difference to your shipping costs and profits. It’s a pretty straightforward way to trim those costs down.

Firstly, let’s talk about the package itself. It needs to fit your product like a glove. Shipping little items in big boxes is just asking for extra costs. If your items aren’t breakable, why not try a poly mailer or a padded envelope?

Secondly, recycling isn’t just for home, you know. If you’ve got boxes in good nick, don’t toss them out, use them again for shipping your items.

Lastly, let’s make sure we’re not paying more than we need to for labels and shipping. No point in paying for features we don’t need, right?

Making smart choices with your packaging is about more than just saving you money. It’s also about making sure your customers get their purchases safe and sound, and on time. It’s a win-win!

4. Where are your orders shipping to?

Have you ever really thought about where most of your orders are being shipped? It’s a detail that could help you plan better, not to mention save you a fair bit of cash on shipping. Notice any patterns? Like, are there certain places where you’re always spending more on shipping? If that’s the case, you might want to think about grouping your shipments to cut down on the number of different shipping zones you’re dealing with.

What’s a shipping zone, you ask? It’s the areas that shipping companies deliver within, and each one has its own set of rates. If you’re sending orders to zones that are a long way from where you are, you’re going to find your shipping costs adding up pretty quickly.

One way to deal with this is to team up with companies that have lots of fulfilment centres. This way, you can make sure your orders are being shipped from the closest possible location, which should help keep costs down.

5. Have you tried using a shipping or fulfilment partner?

Considering partnering up with a shipping or fulfillment firm to reduce your shipping costs? It’s a brilliant idea that many small businesses are adopting.

  1. Think About Teaming Up for More Efficient Shipping: Companies that operate numerous fulfilment centres often offer cheaper shipping choices.
  2. Consider Custom Packaging to Cut Costs: Tailoring your packaging to fit your products perfectly can help lower your shipping expenses. A shipping or fulfilment partner can provide some helpful advice on this.
  3. Don’t Forget About Recycling Packaging Material: Reusing old boxes isn’t just eco-friendly, it can also save you some money.

Conclusion: Save your Shipping Costs Right Away!

In the Ecommerce business, shipment and logistic costs are going to be there no matter what. It is one of the important expenses that comes as a part and parcel of any e-commerce business.

Running a successful Ecommerce business is equivalent to the cost that is cut off or saved and the profit made is considered to be the real business tactic in the e-commerce business to see as profitable of course!

Get your shipment sorted and get started with the implementation right away!

Gaurav Nagani
Gaurav Nagani
As Founder & CEO of Desku.io, Gaurav has made a distinct mark in the customer support and ai bot field. His commitment to AI-enhanced solutions and his industry experience have been instrumental in modernizing customer service.

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