7 Ways a Business Can Minimize Shipping Expenses
As a business owner, you know that running a company comes with many expenses. For many companies, one of the biggest costs is shipping goods.
Logistics is one of the main parts of B2B and B2C businesses, so it’s only natural that it comes with certain costs. But, of course, the goal of every business is to reduce expenses and increase profits. That includes finding ways to make shipping products to the end customer more affordable.
Not to worry, in this article, we will share a few things you can do to minimize your shipping expenses and allow your business to use that money for something better. Shipping doesn’t have to cost a fortune – keep reading to learn how to make it cheaper.
What Are E-Commerce Shipping Costs?
Before you can reduce shipping expenses, you need to understand what they are and how they work.
E-commerce shipping costs cover the entire delivery process, from packing to posting packages. These costs include transportation by a carrier (UPS, DHL, FedEx, etc.), surcharges and fuel charges, etc. Total shipping costs also depend on a few factors we’ll discuss later.
Some businesses choose to absorb all of the shipping costs, while others will pass on at least some of the charges to the customer. And then, there are businesses that offer free shipping but make up for it in other ways (higher product prices, for example).
It’s important to figure out what shipping strategy makes sense for your business and customers. There is no one-size-fits-all solution, so you’ll need to experiment a bit to see what works best. A good first step is finding a reliable logistics company such as Unival Logistics and partnering up with them. They will make it much easier to come to grips with shipping and logistics.
What Affects Shipping Prices?
There are four main factors that will determine how much it costs to ship your product: package weight, package dimensions (dim weight), zone distance, and fuel surcharges.
- Package Weight. The first factor is the most obvious one – the heavier your package, the more it will cost to ship because carriers charge by weight.
- Package Dimensions (Dim Weight). This simply means the size of your package – the larger it is, the more expensive it is to ship. This is because carriers have to use more resources to ship larger packages, so they charge more.
- Zone Distance. The third factor is zone distance, the distance your package travels to get to its destination. The further it has to go, the more it will cost to ship as carriers use more resources to ship packages over long distances.
- Fuel Surcharges. These are additional charges that carriers add to the cost of shipping, and they can vary depending on the current price of fuel. Fuel surcharges are subject to change, so they can fluctuate from one month to the next.
Now that you know the four main factors that affect shipping costs let’s look at a few ways to minimize those costs and save money on shipping.
Ways to Reduce Shipping Costs as a Business
There are a few different things you can do to reduce shipping costs as a business. We’ve listed some of the most effective methods below.
1. Use Right-Sized Packaging
One way to lower shipping costs is to use packaging that’s the right size for your product. This will minimize wasted space and ensure that your product is well-protected during shipping. Not only that but using packaging of the right size instead of unnecessary packing supplies is a more environmentally-friendly option.
It’s also important to use lightweight packaging materials whenever possible to minimize the weight of your package and, as a result, the shipping costs.
2. Use Flat Rate Shipping
Flat-rate shipping is another option that can help you reduce shipping expenses. With flat rate shipping, you pay a fixed price for shipping, no matter the weight or size of your package. This is an excellent option if you ship many small items because you’ll know exactly how much it will cost to ship each package.
3. Compare Different Carriers’ Offers
If you want to reduce shipping costs, we suggest comparing the rates of different carriers. This will help you find the shipping carrier that offers the best rates for your shipping needs. A few websites can help you compare carriers, such as ShipGooder and ShippingEasy.
While comparing different carriers’ rates, we advise you to do some additional research on these companies and make sure you’re making the right choice.
4. Negotiate with Carriers
One of the best ways of reducing shipping costs is to negotiate with carriers. Carriers are always looking for new customers, so they’re usually willing to negotiate their shipping fees. If you have a good relationship with a carrier, you may be able to get discounted shipping rates. You have nothing to lose and everything to gain, so it is worth a shot.
5. Use Packages Provided by Your Carrier
If you use a lot of packaging materials, you may be able to get a discount by using packages provided by your shipping company. For example, FedEx offers discounts on their boxes and packaging supplies. Unless you insist on having branded packaging, this is a great solution for your business to minimize shipping fees.
6. Find Discounted Packing Supplies
You can also find discounted packing supplies at some retailers, such as Office Depot and Staples. These stores often sell shipping supplies, so it’s worth checking them out if you want to save money on packing materials. Shipping carriers also often offer discounts when purchasing supplies in bulk so that you can save money this way.
7. Pay Shipping Expenses Online
Finally, you can save on shipping costs by paying your shipping expenses online. Many shipping companies offer discounts for customers who pay their bills online, a great way to minimize your shipping costs and save valuable time.
Find the Best Shipping Solutions for Your Business
By implementing these tips, you can minimize shipping costs and save money for your business. Shipping doesn’t have to be a burden on your budget—with some planning, and it can be affordable and accessible.
These are just some of the most common and straightforward ways of minimizing shipping expenses as a business. But now that you know more about how shipping costs work, you can even come up with solutions that work for your specific business model.