You’ve already spent quite a bit of money creating a product that your customers will love and packaging it safely. However, you still have one more cost to consider – shipping. 

Both sellers and buyers know firsthand how expensive shipping can be. While bigger companies offer customers two-day or even free shipping, smaller companies often can’t provide these options. Unfortunately, customers have begun to expect these options and leave items in their cart if the shipping choices aren’t what they were hoping for. 

Since carriers set the shipping rates, you might feel helpless when it comes to lowering shipping costs. Fortunately, there are things you can do to cut the costs associated with shipping and negotiate lower rates. 

Let BoxGenie guide you through how to save money on shipping costs. 

Shipping Costs

You’ve probably noticed that the costs of shipping seem to be increasing, particularly for shipping services continually. Why is this?

As online shopping rises in popularity, shipping services are in high demand. This drives the price up – the principle of supply and demand at work. 

Before we talk about reducing shipping costs, it is important to understand what the costs of shipping actually are. We define shipping costs as the direct costs to your company to transport an item from your company’s warehouse to a customer’s residence. Let’s look at the different direct costs to your business associated with shipping:

  • Packaging costs – tape, boxes, filler, labels
  • Warehouse costs – paying workers to pick, pack, and dispatch goods 
  • Carrier costs – pickup and delivery of your package 
  • International shipping fees – import and export fees
  • Additional fees – insurance, handling

Each of these costs is associated with an important step in getting items to your customer. Cutting out even just one of these costs entirely is most likely not an option. However, you can lower the costs of the items and services. 

Reducing Shipping Costs 

Now that you know what costs are associated with shipping let’s look at how we can lower them to save you and your customers money. 

Reduce Package Dimensions

Using a box that is too big for your items costs you more money for shipping than needed. In that case, you are essentially paying to ship air. Also, be mindful of the weight of your package. Avoid shipping more weight than is necessary, particularly when it comes to packing materials. 

Use Lighter Packaging Materials

Modern innovation has given us packaging materials that offer protection to fragile items but weigh very little. Opt for these materials, like packing peanuts or lightweight shredded paper, to reduce the weight of your package without compromising protection. 

Evaluate Your Decorative Packaging

Evaluate the decorative packaging you ship your items in. A decorative metal tin or handmade wooden box seems like a great selling point, but it may not offer enough value to justify the higher cost of shipping. Instead, consider creating a custom mailer box to incorporate your branding elements while not weighing down your shipping budget. 

Purchase Packing Supplies in Bulk

Many suppliers offer discounts on boxes, bubble wrap, and packing peanuts when purchased in bulk. The larger investment upfront will pay off in the long run, and your stock will last for a long time.

Reduce Extra Services

Extra services like shipping insurance and fragile handling increase shipping costs and often aren’t necessary. If your item is lower in value, shipping insurance may not be worth the investment. Instead of paying extra for your item to receive special handling, package the items more securely. Paying the fee doesn’t guarantee that it will be treated gently. 

Use a Third Party

Use shipping insurance if shipping high-value items. If you are shipping items that are higher in value, compare costs for shipping insurance. Purchasing insurance from a third-party company can be cheaper than purchasing a policy from the carrier.

Consider Using Flat-rate Shipping

If your company is shipping out the same items on a regular basis, evaluate if flat-rate shipping boxes could work for you. This keeps the costs of shipping predictable and makes budgeting for a given amount of time easier. 

Use Prepaid Shipping Labels

If shipping out items of the same size and weight consistently, consider buying prepaid shipping labels. This saves time weighing packages at the carrier’s office, and time is money. 

Use Poly Mailers

If the items you are shipping are smaller in size, use poly mailers. Poly mailers take up less space and contribute less weight, so they cost less to ship than a box. Also, there is no need to purchase packing material with poly mailers since the packaging material is built into the envelope.

User Slower Shipping

Using slower shipping costs less in exchange for taking more time. While not ideal for every order, make use of this for monthly subscription boxes with a set delivery date. Plan ahead and ship the box at a slower speed to arrive by the date promised.

Use Hybrid Services

Hybrid services combine the services of different carriers for package pickup, sorting, and last-mile delivery. While hybrid services are slower, they do cost less and save money. 

Customize Packaging

Customizing packaging allows you to find the right size box for your items. This avoids packing items in too large of a box and paying to ship air. While customizing might sound like it costs more, it is a one-time cost. It will pay for itself with savings in shipping costs.

Negotiate a Lower Rate

If your business uses the same carrier for all your shipping, consider asking for a discount. Carriers occasionally give discounts to loyal customers of their services. Even if it’s just a small discount, it will add up to big savings over time. 

Explore Other Carriers

On the other hand, consider looking at other carriers if you’ve been using the same carrier for a long time. A different carrier might have better rates for the services you need. Do some research, and ask for some quotes. You might be pleasantly surprised at what you find. 

Don’t Reduce Quality 

An important point to note is that, in your efforts to reduce shipping costs, do not reduce quality. Your products still need to arrive at your customer promptly. Shipping services are an important part of the customer experience, so provide your customers with the best quality shipping you can afford. 

Failing to do so may lose your business in the long run. 

Enjoy Your Shipping Savings

Shipping costs can add up quickly, but thankfully there are ways to save money on shipping. Take time to evaluate your company’s needs and where you can cut costs, not corners. Researching the solutions above helps lower shipping costs. Implement the ones that work best for your business and your customers.

This might look like swapping out your packaging, limiting what goes in the box, or switching to a different carrier. Evaluate your customer’s needs and what you are financially able to offer. With a little extra research, creativity, and planning, your business can reduce the cost of shipping and have more money to allocate elsewhere. 

These changes will pay off financially for your business in the long run. For more shipping advice, visit Box Genie.

 

Sources:

  1. Creative e-Commerce Shipping | Tagg Logistics 
  2. Priority Mail | USPS 
  3. Shipping Label: How to Create, Print & Manage | FedEx 

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