Shipping costs are often overlooked by businesses until hard revenue facts are presented. This can be a disheartening moment for your business’ bottom line. These costs add up quick, whether shipping products to customers, returned product handling, and/or receiving products and supplies.
Did you know shipping can eat away at 25 percent of your operating budget? However, there are ways to reduce shipping costs. The most common way businesses cut down on shipping spend is to tighten the budget of another asset in the business.
But what if you can have your cake and eat it too? Here are X tips to effectively reduce shipping costs without changing the budget.
Most shipping companies have a flat rate shipping option, especially for businesses that do a lot of shipping like in the case of ecommerce. This can make a significant impact on shipping costs. Top shipping companies like UPS and FedEx have flat rate options you can check out.
These flat rates are normally set up by distance. This can get a bit confusing for a business owner new to flat rates. Be sure to get all the information via a rep for the shipping company to ensure you narrow down the price per distance.
There are a lot of shipping carriers out there, and they all know that competition is fierce. You can use that to your businesses advantage when it comes to shipping rates. For example, they definitely don’t want to lose a customer that does a lot of shipping week after week, so to get better rates, don’t be shy about expressing your concerns.
You will most likely have a carrier representative for your business, especially if you are shipping lots of products. Talk to your carrier rep and tell them that you have been getting offers to switch to a competitor carrier and see what they will offer to keep you business their business.
The cost of shipping isn’t always about the cost it actually takes to ship products from Point-A to Point-B. The cost of shipping material can also put a dent in your business budget. This makes managing your shipping supplies cost-effectively important.
For example, don’t be afraid to reuse boxes. Buying cardboard boxes is pretty expensive if you are doing plenty of shipping. Chances are, you are receiving shipments, like inventory and returns, so keep those boxes handy. You could save a pretty good amount just doing this.
Ditching air is also essential. Bubble wrap for example isn’t really necessary, and it is very costly. You can easily replace bubble wrap with recycled paper and make an environmental impact at the same time.
What does batching your accounts mean? Instead of sending out multiple packages to one client or customer, batch them together in one box. Amazon does this effectively on the products that are fulfilled by Amazon. If a customer buys three products that are fulfilled by Amazon, chances are you will get them all in one box.
By batching products for customers, you will cut down on shipping costs, and also reduce the amount of shipping material you’ll need to ship say multiple items. This can make an impact on your shipping budget.
You can do all of the above, but without having metrics in place to track and analyze data, you could be missing a few streamlining opportunities. The good news is that reducing shipping costs is easier than ever before.
There’s software platforms that can track, audit, and deliver detailed data on where your shipping budget is going, and how to improve your processes. This kind of service can even negotiate contracts with carriers for you in order to save a big percentage on shipping costs.
Shipping is not something to take lightly, especially if a big part of your business is getting products from your warehouse to customers. Business owners need to stop accepting shipping costs as a loss and streamline the process intelligently. The above tips can be a useful place to begin. How much is shipping costing your business?