Running a small business means that you often have to think about your budget. There is not an infinite source of funds that you can work with, so you often have to compromise on your marketing strategy or some other aspect as you want to focus on developing your products and services and meeting your customers’ needs. With that in mind, you’re probably looking for a way to cut shipping costs as well. Take the following tips into account.
Seeing as how you’re working with a limited budget, you want to understand all the expenses that are related to shipping. For starters, packaging supplies like bubble wrap, boxes, tape, and stickers all need to be covered. Then, you cannot overlook the labor hours that it takes to fulfill an order and the costs of the carrier that will deliver the items. While you can handle delivery on your own, it’s much more affordable for a small business to outsource this part of shipping. Finally, if you ship internationally, you cannot disregard the import and export fees. When looking to reduce your costs, these are the areas that you should be thinking about.
Think about adding the shipping costs to the upfront price
Some businesses use the strategy of only showing the costs of shipping once a customer reaches the checkout page. If the costs are too high, the potential buyer will simply leave and look for another solution. To keep the customers on your side, you can consider showing the shipping fee alongside the upfront price. Or, if the shipping is free over a certain amount, make it visible. That being said, you should understand how higher prices could affect your sales before you start doing this.
Pay attention to the packaging dimensions
Something that you need to pay attention to is the size of your packaging. As large and heavy packages cost more, you want to use boxes that fit your products just right so that you don’t have to pay extra. Instead of opting for only one size of boxes, use several sizes to better fit your products and lower your expenses. Moreover, you can also completely get rid of boxes and use poly mailer bags or mailer envelopes, depending on what you ship.
Offer in-store pickups
An option you can consider for local customers is offering in-store pickups. They can place their order online or over the phone and pick it up from the store within the next few days. That way, you don’t have to think about developing your own delivery system or outsourcing. Plus, this way, you can get to know your customers a bit better and connect with your community.
Try to negotiate the shipping rates with your carriers
One tip you can use to your advantage is negotiating with your carriers and seeing if you can get a discount. While carriers typically apply discounted shipping rates to businesses that see high volumes of shipping, you can still get some benefits as a small business. Furthermore, even if you aren’t able to lower the price, you can still check the rates of other carriers and opt for an alternative that is more affordable. What is more, you can also find companies that include services like logistical distribution into the offer, which can make your job much easier.
Work with several fulfillment centers
Reducing the shipping distance can also help you cut costs. For this, you don’t need to have warehouses in different places so that you can reach customers faster. What you can do is work with a few fulfillment centers, which will ensure you’re covering a wider territory and delivering your packages faster, thus cutting your shipping expenses.
Look into prepaying your shipping
In certain cases, it makes more sense to prepay for shipping as some shipping companies actually offer discounts to businesses that do this. By buying a set amount of shipping labels beforehand and attaching them to packages as you receive orders, you are saving both time and money. However, for this to work, you will need to know how many orders you can expect on a monthly basis, their weight and dimension, and other shipping costs.
Consider third-party shipping insurance
Finally, depending on what your company does, it’s probably best to look into insurance to make sure your products are safe at all times. You should first check the insurance your shipping company offers to decide whether you should look into third-party insurance. Sometimes the shipping company can overcharge this service and when looking to save money, this is not something you want. With that in mind, look for the option that suits you best.
For a small business, every cent counts. You want to take these tips into consideration and work on lowering your shipping costs.