Shipping is one of the biggest costs that e-commerce businesses must deal with. The customer covers some of that, but if you charge too much, you will drive people away. On the other hand, if you absorb high shipping costs, you’re cutting into your profit margins. That’s why online retailers must find ways to cut back on shipping costs. If you can achieve that, you increase your profit margins and you can cut costs for the customer too. These are some of the easiest ways for online businesses to slash shipping costs.
Cut Back on Packaging
Your deliveries are charged based on the size and weight of the package. So, if you have a lot of excess packaging, it will cost more to ship the item. This is a very common problem that often arises when companies just buy standard-sized boxes that aren’t quite right for their products. Pay more attention to the box sizes and pick ones that are just about large enough to fit the product and you will make some big savings. You should also look into custom boxes, although these can be more expensive, so you have to calculate whether the savings are worth it.
Use Less-Than-Load Shipping
If you ship small items, you’ll have a lot of trouble filling a large truck full. So, should you just send a half-empty truck? No, that’s a big waste of money because you’re paying for the whole truck, even though you don’t need it. That’s why you should use ltl freight shipping (less-than-load) instead. With LTL shipping, you don’t pay for the whole truck, you just pay for the items and they are loaded onto the truck with items from other deliveries too. The cost is shared by all companies that have items on the truck, so it’s much cheaper for everybody involved.
Negotiate with Couriers
Don’t just accept the first price you get from couriers, and keep an eye on the prices because they could increase over time. You can always negotiate with couriers and get a better price from them, especially if you ship a lot of items with them. It’s a good idea to get quotes from a few different couriers, so you can use this for leverage when negotiating. Don’t be afraid to switch suppliers regularly if it means you get a better price too.
Use Third-Party Insurance
Getting insurance through your courier usually pushes the price up quite a lot. It does make life a bit easier because you don’t have to sort it out separately, but it’s also an unnecessary waste of money. If you shop around for your third-party insurance, you have more control over the price and you can usually get it cheaper. You can also compare prices and switch every year to make sure that you’re always getting the best possible price.
These simple tricks can help you drastically reduce your shipping costs and make things better for you and the customer.