Reducing shipping costs, you’ve thought about it, likely time and time again. As you already know, shipping isn’t cheap.
In fact, all major carriers raise their shipping rates every single year. With high demand growing in ecommerce sectors, it often leads to a shortage of everything; warehouses and truck drivers particularly. With the post-pandemic and inflation, shipping costs are at record highs. Ouch! Still, thanks to retail companies like Amazon, small business shipping is a constant challenge as the retail giant has raised the bar for faster free shipping. If you’re fulfilling orders from home, how in the world do you compete? And more so, even larger retailers struggle with shipping costs.
The elephant in the room, how can ecommerce businesses reduce shipping costs and improve margins?
(1) Weigh Packages And Reduce Dimensions
Heavier packages cost more to ship, the only way it doesn’t is if you’re using flat-rate shipping. If you do all your printing labels and shipping from home, we’d recommend investing in a postage scale, this will allow to estimate costs more accurately and help you purchase the proper shipping labels. Weight is always a factor in costs, but carriers also consider dimensions of the package when calculating shipping costs.
You always want to be sure you’re aware of your dimensional weight. If you’re using a box that is too large for a lightweight item, you’ll pay more than you should because the package size is a factor in determining shipping costs. Larger boxes can lead to larger dimensional weight, which in turn will lead to more expensive shipping costs for you.
You need to make sure your shipping box is the exact size you need.
(2) Decrease Shipping Distances
A lot of companies pay high shipping fees because they ship to destinations that are far away. Shipping zones are the geographical areas that carriers ship too, there’s 8 total Zones for domestic shipments in the United States alone. These zones measure the distance a shipment travels, the point of origin is located in Zone 1.
The farther away the shipping destination is, the higher the zone number and the more expensive the shipment becomes. If you can eliminate shipping to higher zones, you can save a lot of money over time and benefit from better shipping options with lower rates, we’ll discuss partnering with companies that have multiple fulfillment centers later in this article.
(3) Find Discounted Supplies
Many of the major shipping companies (USPS, UPS, and FedEx) may provide small businesses with special boxes and envelopes for free or at least at a discount for certain packing supplies. You can also purchase packing supplies;
- Bubble wrap
- Poly mailers
- Dunnage
- Boxes
- Tape
While it could be a higher investment to pay now, it can help you reduce your average per-shipment cost.
(4) Discounted Shipping Rates
Discounted shipping rates are always an option if you’re shipping large volumes. While most merchants think you have to be shipping thousands of orders every day to take advantage of bulk shipping discounts, that’s not always the case. There’s nothing wrong with negotiating volume discounts in exchange for your loyalty to a particular shipping carrier. Sure, the more you’re shipping, the higher the probability you’ll have discounts available. However, even if you’re only shipping a few dozen products a day, discounts opportunities may be available, so speak up and ask.
Ecommerce store owners should seek lower shipping costs, as long as the service for the lower costs does not affect the shipping solutions or extend delivery times.
(5) Platforms Has Opportunities
(6) Try The Prepaid Route
Did you know that prepaid shipping can get you up to 20 percent off shipping costs from carries such as UPS and FedEx? It’s true, all you have to do is purchase a certain number of shipping labels upfront. You don’t need to affix them to a box until the individual order needs to go out. This not only saves costs but time as well.
This strategy only works when you consistently ship orders containing the same weight and dimensions or know this information ahead of time to ensure accurate shipping costs.
(7) Insure With Third Parties
(8) Consider Using A Hybrid Services
Hybrid shipping services may be a good route to take, services like UPS SurePost and FedEx SmartPost pick up your orders and then work with other carriers like USPS to transport your packages to a sorting facility or post office location. From there, it’s then shipped to a residential area for last-mile delivery. This could cut your shipping costs by as much as 50 percent in some cases. However, there is a tradeoff, this method takes longer to deliver your shipments to customers.
It may be worth exploring and testing, certain scenarios may call for it and others will likely not.
(9) Start Using Poly Mailers
If you sell small, non-fragile products like clothing, shipping orders in a mailer envelope or poly bag can be far more cost-effective than boxes. The dimensions are smaller, taking up less room on a delivery truck, and using them also requires less packing supplies like tape and bubble wrap to save even more money.
If your orders contain different combinations of products, you could consider using different sized poly mailers. There’s no question about it, if you can use poly mailers, it can save you some money on shipping expenses.
(10) Outsourcing Your Fulfillment To Thill And Lower Shipping Costs
In some cases, the best way to reduce shipping costs and scale is to partner with a professional fulfillment company. Thill provides inventory management, warehousing, and other ecommerce fulfillment services, and also helps brands compete with big retailers.
While we can’t speak for other 3PL fulfillment companies, here at Thill, our clients are able to reduce shipping costs because of our network and partners. We may be able to help you save too, just use our contact form or call 1-920-967-9201.
Optimize Fulfillment Locations
Thill helps ecommerce sellers choose the best location in the US to store their inventory closest to the most customers using shipping destinations from their sales history. By cutting down the distance an order has to travel, it can be delivered quicker and at less cost.
You can also use multiple Thill facilities to efficiently reach even more customers.
Bulk Shipping Discounts
With thousands of customers, Thill is able to negotiate bulk discounts from shipping companies such as UPS, USPS, FedEx, and DHL to provide better rates to customers for shipping.
In Closing On Reducing Shipping Costs
If you truly want to reduce shipping costs, it’s possible. If you follow the tips in this guide, these strategies can work.
Shipping and handling are unavoidable logistics costs when running an ecommerce business. Having the right strategy in place helps you reduce shipping costs and ultimately grow your business. This is where Thill Inc. can help, our clients save a lot of money on shipping costs thanks to our massive fulfillment network and strategically placed fulfillment centers across America.
Request a pricing quote from Thill to learn more and see how we can help.
