You’re probably aware that shipping isn’t cheap.
Carriers raise their shipping fees on an annual basis. In the ecommerce business, there is a scarcity of everything from truck drivers to storage space. Amazon only makes small-business shipping more difficult by continuously raising the bar for faster free delivery, which becomes increasingly expensive for tiny companies that fill orders from home to replicate.
So, how can ecommerce firms decrease shipping expenses and increase their margin?
9 ways ecommerce stores can reduce shipping costs right now
Shipping costs are complicated. There are several additional expenses involved with in-house fulfillment. Here are some ways to potentially decrease your shipping cost.
1. Reduce the distance between you and your customers
When companies transport goods to distant locations, they typically charge high shipping costs. The locations where carriers deliver packages in the United States are called shipping zones. Domestic shipments are delivered from Zone 1 to Zone 8 in the United States. Zones refer to the distance a package travels, with zonal origins located at Zones 1 and 2.
The zone is determined by the delivery destination, which costs more and takes longer to transport as it is farther away. If you can get rid of shipping to higher zones, you’ll save money over time and be able to utilize cheaper shipping options with faster delivery times — more on collaborating with firms that have many fulfillment centers soon!
2. Reduce the dimensions of your shipments and compare their weights
If you’re not using flat-rate shipping, however, heavier items will incur a higher cost. Consider investing in a postage scale if you’re printing labels and sending from home to better predict costs and get the correct shipping labels. When determining shipping costs, carriers take into account package dimensions as well.
If you’re shipping a lightweight item in a large box, you’ll pay more than necessary because of the room it takes up. Larger boxes can result in higher dimensional weight, which will cause shipping costs to rise.
3. Find reduced-cost items
Small companies may get small quantities of packing supplies from shipping firms such as USPS, UPS, and FedEx for free or at a discount. You may save money by purchasing packing materials such as boxes, dunnage, bubble wrap, airfill, and poly mailers in bulk.
Don’t be scared away by the higher upfront investment — you won’t run out of cash right away, and you’ll also lower your per-shipment cost. You could even get some free shipping supplies if you look hard enough.
4. Start getting discounted shipping rates
You don’t have to be shipping hundreds of thousands of orders a month to take advantage of shipping volume pricing discounts from several delivery companies. There’s no need to be afraid to ask for quantity discounts in exchange for loyalty to a specific shipping service. Of course, the greater number of packages you send, the better your rates will be.
Ecommerce sellers who have warehouses can save money on shipping by obtaining cheaper rates. If the lower-cost service doesn’t alter their shipping options or cause delays, they should seek them out.
5. Check out offers from the platform(s) or marketplace(s) you sell on
Check to see if your ecommerce platform or marketplace offers any bulk shipping services or programs. They may include features such as real-time carrier rates, shipping applications, built-in capabilities, and integrations with fulfillment software that can help you save money and improve your delivery options.
6. Third parties can help you save money on your policy
Cutting extras is one approach to save money on shipping fees, which, depending on the goods you’re sending, might be covered by shipping insurance. If you do want shipment insurance for your packages, third-party package insurances are frequently less expensive than using your shipping service. Of course, this is most relevant to high-value products.
7. Go prepaid
Prepaid shipping from UPS and FedEx can save you up to 20% on delivery fees if you buy a certain number of shipping labels ahead of time. You don’t have to apply them to a box until an item in the batch needs to be sent out. This not only saves money, but it also reduces transit time.
This may only work if you ship orders with the same weight and dimensions on a regular basis, or if you know this information ahead of time to ensure accurate rates.
8. Change from boxes to poly mailers
If you offer tiny, non-fragile goods like apparel, sending orders in a mailer envelope or poly bag is frequently more cost-effective than using boxes. They’re smaller in terms of size and take up less room on a delivery truck, which means they require fewer packing materials like tape and bubble wrap to save even more money.
Consider using various-sized poly mailers if your purchases include different combinations of items.
9. Take a look at hybrid services
UPS SurePost and FedEx SmartPost collect your goods and then connect them to other carriers like the USPS for transportation to a sorting facility or post office location, where they are subsequently sent to a residential area for last-mile delivery. In many scenarios, the total cost of production drops by as much as 50%. However, in many cases, the delivery is delayed.
There are a number of restrictions when it comes to storage containers.