Introduction
eCommerce companies, particularly small businesses, can boost their profits by reducing delivery costs. Free delivery may improve customer satisfaction and increase profit margins.
Since 83% of consumers value expediency more, companies must offer dependable, quick, and reasonably priced delivery choices. This helps small businesses draw customers and keep online shoppers from abandoning their carts.
Therefore, to reduce shipping costs, businesses can address several factors. These factors can make it difficult for small businesses to compete and offer low rates or free shipping.
This post will explore some of the tips and best practices that can help small companies save on shipping charges—
How To Bring Down Shipping Charges?
Given below are some of the most important methods to bring down shipping charges for small businesses—
1. Negotiate Shipping Rates
Discounted shipping rates are not limited to large retailers like Amazon. Even small businesses can benefit from comparing prices and negotiating lower rates.
Share sales projections with different shipping companies if you anticipate increased orders due to seasonality, demand, or growth.
Get quotes from multiple carriers and consider switching if you find a company offering lower rates or fees.
Carriers such as FedEx and UPS can be negotiated to offer reduced rates to volume shippers. If your eCommerce business is large enough, you may secure discounted prices.
Even small businesses and startups can benefit from carrier discounts.
Check if your orders are eligible for lower rates through an eCommerce platform and ask if your fulfillment provider can pass the savings on to you.
2. Use Fuel Cards
Fuel cards are a cost-effective solution for shipping and delivery logistics. They allow drivers to save money on fuel each time they refuel. A fuel card can help your business in the following manner:
- Increase payment access with more vendors.
- Help smaller businesses build credit.
- Customers can pay for associated costs like insurance, car maintenance, and tolls.
- Streamline internal operations and administration.
Businesses can budget, reimburse, and monitor expenses all from within one workspace with the help of certain fuel cards that integrate with payroll management systems. Therefore, you can do a fuel card comparison before getting one.
Secured fuel cards may also make businesses eligible for fuel discounts, such as AtoB’s.
Moreover, these cards provide logistical flexibility and financial savings, making them a valuable tool for businesses focusing on local deliveries or integrating into the global shipping chain.
Therefore, whether your business is focused on local deliveries or global integration, fuel cards can help keep you competitive.
3. Reduce Your Package Weight
To reduce product weight, consider using bags instead of boxes and light cardboard boxes for shipping.
Follow the steps below to bring down your package weight—
- Match the box to the product to minimize infill.
- Air-filled pillows are also recommended.
- Assess the weight of a typical order using various infill options to find the lightest option.
Minimize product packaging to reduce weight and bulk while still conveying branding. Creative ways to convey branding without adding bulk can save eCommerce shipping costs.
Invest in a postage scale to predict costs and purchase the right shipping labels. Carriers consider package dimensions when calculating shipping costs, so using a box that is too big for lightweight items can result in higher costs.
Create custom packaging with smaller dimensions, use “ships in own container” packaging, and reuse old boxes. Avoid shipping more air than necessary to avoid increased costs.
4. Implement Flat Rates For Shipping
Flat-rate shipping is a cost-effective and straightforward option. It splits shipping costs into the following factors:
- Size.
- Weight.
- Destination categories.
Therefore, it makes it more predictable and cost-effective.
It reduces uncertainty at checkout and reduces the chances of abandoned carts. Carriers like USPS and UPS offer pre-determined prices for specific box sizes, making estimating and budgeting shipping costs easier.
Flat rate shipping is one of several types of shipping rates that can be charged at checkout using Shopify.
You can create flat shipping rates for any order within a shipping zone, price, or weight range. For instance, you could set a domestic flat rate of £5 and another at £3 for orders exceeding £50.
5. Put Policies & Strategies In Place
A clear shipping policy makes customers feel supported and informed about shipping costs. It should cover costs, delivery expectations, return policies, and customer notification methods.
While it doesn’t directly lower shipping costs, it indirectly contributes to savings. Strategies can promote transparent communication, efficient order processing, and reduced return expenses.
A robust shipping strategy is crucial for streamlined delivery and shipping processes. It should cover the business’s location through a website, online marketplaces, or multi-channel approach.
The chosen route impacts shipping processes, and a multi-channel approach should incorporate the shipping requirements for each channel.
Selling on multiple channels can increase sales. However, managing marketplace requirements like Amazon, Walmart, and eBay is essential.
Therefore, when working with multiple carriers, such as Priority Mail for smaller packages and UPS 2nd Day Air for expedited shipping, provide your customers with the best options.
Outsourcing Shipping Vs. Fulfillment Management Services
Small business owners often need help with shipping and fulfillment, which can be time-consuming and resource-intensive.
Therefore, outsourcing this process can save time and resources using third-party logistics (3PL) and drop shipping.
A reliable third-party logistics provider like Fulfillment by Amazon (FBA) can handle the entire process for businesses, working for orders made through Amazon and other selling channels.
Carrier shipping fees are based on package weight, size, speed, volume, destination, and services. Frequent shipping can lower rates, but commercial deliveries may cost more.
Carriers can help calculate shipping costs and other expenses like materials, labor, and import and export fees.
Outsourcing shipping and fulfillment management can save time and resources while ensuring product safety and efficiency.
How To Deal Increase In Shipping Charges?
Shipping is crucial for any company, and high costs can turn off buyers, with 48% of abandoned carts linked to high fees.
However, to keep consumers satisfied, you can absorb shipping costs. Next, you can pass the rest to the consumer. Subsequently, the average increase in shipping costs can raise product rates, or the product price can be kept the same and shipment costs raised.
46% of consumers prefer free shipping, and 46% have chosen longer shipping to reduce costs. Small business shipping requires diligence, planning, and attention to customer satisfaction.
Moreover, as shipping rates rise, businesses can pass costs on to the consumer, leverage flat-rate shipping, use cost-cutting best practices, and leverage technology to offer the best prices.
By focusing on fluctuating shipping costs, businesses can sustain profit margins without driving away customers with abrupt price increases.
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