For many businesses, shipping costs are one of their most significant expenditures. Fortunately, there are ways to reduce costs.
For most of us, every dollar counts, so you will enjoy the following 14 tips to help you save on shipping costs, money which you can in turn reinvest in your marketing, human resources, or customer service.
1. Whenever possible, use ground shipping
Must your packages be delivered within 24 hours? If not, send by ground shipping whenever possible.
However, make sure your customer is well aware of the delivery timeline and accepts it.
2. Include all surcharges for special shipments in your rates
If your customers are paying for shipping, make sure all supplementary costs are included so you don’t end up paying for them.
If you have a flat rate for shipping, make sure to include surcharges for international or expedited shipments, and indicate them as being at the customer’s expense. Check for fuel surcharges, signature upon delivery fees, or weekend delivery fees before making your customers pay.
3. Optimize your packaging
The bulkier and heavier your package is, the more your shipping costs increase. Your objective should be to package your products in the most efficient and compact way possible without skimping on protection.
Do you really need to pack in a box? Could your products fit in a smaller or lighter packaging?
For more tips on the best choices in terms of packaging and packaging material, take a look at our Practical Guide to Packaging – Part I.
4. Save your packaging material
Why not save the packaging that came with the products you ordered and reuse it to ship your orders? Save the boxes, bubble wrap, and packing material that you could reuse. As an additional bonus, it’s a small contribution to the environment!
For more tips on inventory management, read our Practical Guide to Packaging – Part II.
5. Purchase your packing material in bulk
You can reduce your shipping expenditures by buying in large quantities. This way you can negotiate a much lower price for your material.
6. Go digital as much as possible
If you sell gift certificates or send some to your customers, favour a digital format rather than on paper. You will of course save on shipping, and less pollution!
7. Deal with several carriers
Just as you would shop around for products, it should be the same for services. You should not hesitate to use different carriers depending on the destination, delivery time, and type of product. Rate can differ greatly from one carrier to another based on weight, package size, and final destination.
8. Negotiate with carriers
Carriers have price lists based on volume, so the more you ship out, the lower your rates should be. Why should you pay the regular price when you ship a high volume of packages?
Problem is many small businesses don’t think they have any leverage in negotiating rates and so it is not uncommon to see two merchants shipping out the same number of packages pay two totally different prices. The difference is one of the two was able to negotiate his pricing.
Go ahead, compare prices and then try to convince carriers to offer better rates. If FedEx knows that UPS is offering a better price, you are in a position to negotiate!
Yes, carriers want and need to ship as many parcels as possible, so if you start giving some of your business with a competing carrier, it will keep your main supplier on his toes if he doesn’t want to lose all your business! It’s only fair.
Another side point, but extremely important when trying to get better rates with your carrier: NEVER accept to forfeit the on-time delivery guarantee! Yes, this guarantee gives you the opportunity to save even more by receiving refunds for shipping fees on parcels delivered late. Moreover, this contributes to a high quality customer service.
If you were to forfeit this guarantee it would be like putting the carrier’s rep’s bonus ahead of customer satisfaction. Your rep has targets to meet and when you avail yourself of this on-time delivery guarantee, he has to work harder to meet his objectives and get his bonus. You can wonder what your rep or his manager’s real preoccupation is if he pressures you to forfeit the guarantee or tries to prevent you from claiming refunds.
9. Don’t pay surcharges for residential deliveries
Good to know, Canada Post does not apply a surcharge for deliveries in residential areas. Check with other carriers you deal with to see if they have this type of surcharge. You could be in line for more savings…
10. Make sure to follow your carrier’s packaging guidelines
Carriers define the standard for package sizes, so make sure you stay within those limits. To avoid surcharges, ask your carrier if they can supply you with their own packaging and if so, calculate to see if it would be advantageous for you to use it.
11. Use your platform’s shipping service
If you sell on a marketplace such as Etsy, you can print a shipping label directly from their site. Shopify also offers this service when sending a tracking number directly to your customer.
12. Don’t pay for insurance
When selecting shipping options, it’s important to calculate the cost of insurance. True, insurance may be necessary in some circumstances, however, the probability that a parcel will be lost or stolen is fairly low and it may be more advantageous for you to absorb the costs yourself in case of loss or theft rather than paying for insurance on a parcel of small value.
13. Offer different types of shipping
By offering free shipping starting at a certain purchase amount, you will encourage your customers to increase the value of their order to benefit from the free shipping. This will contribute to increasing the average amount of your orders. In contrast, customers who want a better delivery service will be willing to pay more to get their order sooner. The ‘free shipping’ orders can be amortized on these types of ‘premium’ orders.
14. Sign up with Buster Fetcher
By signing up with busterfetcher.com, you can easily save on shipping costs. Buster Fetcher tracks all your parcels for you, finds the ones delivered late, and claims refunds for these with your carriers. Signing up is free, so all you really have to lose is money if you don’t sign up! No matter how many parcels you ship out, no doubt there is money to get back!
The golden rule is to choose your carriers wisely. Also, take the time to look at your shipping history on a regular basis and reassess your needs and rates with your current carrier. Yes, shipping costs are one of the most significant expenditures of many e-commerce businesses, but savvy entrepreneurs always find a way to pay the best prices. And Buster Fetcher is always there to help you get back the money you are entitled to. Don’t miss out!