how to reduce shipping costs small business

how to reduce shipping costs small business

The cost of shipping a package in many cases depends on how much space it takes up in a truck or airplane. How to Reduce Shipping Costs. Soon, this will be 100%. In retail, customer returns are to be expected. Reduce Shipping Costs by Playing the Game. 45% of online shoppers will shop around if they feel that the shipping options provided aren’t satisfactory or too expensive. Although it would be easy to brush this off as a minor inconvenience for your small business, the truth is that your ability to make the return process easy and issuing a prompt refund are all part of delivering good online customer service. For small business owners, lower overhead costs usually means better profit margins and a boosted bottom line. Use a shipping platform to access business discounts. "name": "2. A customer’s experience with a brand can create repeat business or turn off big clients. Better Mail. Reducing shipping costs depend on several variables. If you’re using too big of a box for a lightweight item, you will pay more than you should because of the space the package takes up. To calculate international shipping rates and discover the cheapest way to ship internationally, play around with the different carrier rate calculators to determine the best shipping rates for your business. Shipping has never been more important for a small business, and it’s keeping many businesses alive during the COVID-19 pandemic. Discover how you can better calculate and reduce shipping costs for your small business. Saving money on shipping supplies may or may not be beneficial to your business. 2 nd business day by 10:30 a.m.). Some factors to consider when choosing a shipping option include the weight of the package being shipped, where it needs to go, and the delivery window expected by the customer. The more you ship, the... 2. 8 Ways to Reduce Shipping Costs as a Small Business. "image": "https://www.shipbob.com/wp-content/uploads/2019/05/iStock-943022616.jpg", Things like boxes and bubble wrap can often be reused many times over. How can small businesses reduce shipping costs? Shipping and handling are unavoidable logistics costs when running an ecommerce business. Note: This really only works when you consistently ship orders containing the same weight and dimensions or know this information ahead of time to ensure accurate shipping costs. If you can help it, you can even reuse some of your packaging. ", "@type": "HowToSupply", By sticking to just one option, like the USPS® Flat Rate Box, small businesses risk overspending on shipping when they don’t need to. Consider the following ideas to implement to make up your shipping costs: Adjust the product price to absorb the shipping cost and offer free shipping (only if you sell expensive products). In fact, unless a customer specifically needs it and is willing to pay for it, overnight delivery should not be a part of your free shipping strategy. There are many ways to reduce your shipping costs. There’s no harm in attempting to negotiate volume discounts in exchange for loyalty to one shipping carrier. Others use boxes when they could use a poly mailer or padded envelope to decrease the weight and dimensions. Small businesses and ecommerce companies are under increasing pressure as shipping … Saving money on shipping supplies may or may not be beneficial to your business. Consider the following ideas to implement to make up your shipping costs: If you have allegiance to one shipper/carrier just because they’re closest to you, it might be worth looking into other options. Know where you’re shipping. Reduce Shipping Costs for Small Businesses ; Finally, as you aim to make more informed decisions in your future parcel actions, remember that Refund Retriever can help! Once a year or so, I sit down and review all my shipping costs. After switching to ShipBob just four months later in November, we are reaching $160,000 a month in revenue — that’s 300% growth. Small business shipping has become a cost management focus for eCommerce brands. This is where multi-channel shipping can help your small business. Shipping costs not only include the amount associated with shipping but also, the cost of supplies you receive for production. But how can the average business shipper cut costs while FedEx and UPS keep increasing rates and the Postal Service threatens to close branches and reduce personnel? So, how do ecommerce businesses reduce shipping costs and improve their margin? If you can eliminate shipping to higher zones, you can save a lot of money over time and benefit from better shipping options with lower rates. Online shipping and sending software isn’t just for the big guys anymore, and it can make a significant difference in reducing both shipping costs and complexities for small ecommerce businesses. Best Shipping for Small Businesses. Charge customers a reduced shipping cost while … 88% of online shoppers are would never buy from a site again if the returns process was complicated, or took too long. When using shipping solutions for e-commerce and fulfillment shipping, there are ways to save and negotiate lower shipping costs. All shipping companies have pricing discounts available based on shipping volume, and you don’t have to be shipping hundreds of thousands of orders a month to get these discounts. They need help reducing shipping costs. Because shipping and handling fees are now a key element in the buying decision process, Upela helps you build a sustainable business model by comparing the shipping rates to always get the cheapest price for the best service. If you’re shipping to customers throughout the country or even internationally, base your business shipping costs on the most accurate information you can get. Every year our shipping rates increase, but it seems like the big guys get deeper shipping discounts. "@context": "https://schema.org/", In addition to weight, carriers consider dimensions of the package when calculating shipping costs.If you’re using too big of a box for a lightweight item, you will pay more than you should because of the space the package takes up. Shipping is the black sheep of every online seller. If you’re printing labels and shipping from home, consider investing in a postage scale to better predict costs and purchase the right shipping labels. With a proper multi-carrier shipping strategy in place, your company instinctively saves money whenever shipping a customer order while saving time for other tasks. "name": "1. Look Into Different Carriers. Shipping costs can be one of the biggest expenses for many small businesses. They may have features that provide real-time carrier rates, shipping apps, built-in features, and integrations with fulfillment software that can provide you with better rates and fulfillment services. They may have features that provide, One way to save on shipping costs is to cut extra services, which, depending on the value of the product you’re shipping, could be. How to Reduce Your Business Shipping Expenses: 1. Understanding patterns in shipping destinations can help to identify where you should be shipping from. Each major carrier offers the ability to schedule pickups from your home. Shipping zones are the geographical areas that carriers ship to, spanning from Zone 1 to Zone 8 for domestic shipments in the United States. Cut Shipping Costs. Discover how you can better calculate and reduce shipping costs for your small business. This will help you calculate the actual cost of shipping while building trust with your customers. … "text": "One way to save on shipping costs is to cut extra services, which, depending on the value of the product you’re shipping, could be shipping insurance. Look Into Different Carriers. This can cut costs as much as 50% in some cases. If you primarily ship to one specific region, a regional carrier may be your best bet. "@type": "HowToSupply", "@type": "HowToStep", As a result, ShipBob customers have experienced an 18% reduction in cart abandonment rate and a 97% increase in their average order value. You can present shoppers with two scenarios where they would pay the same total price, yet they would abandon their cart for the one that has a higher shipping cost. But shipping damage can really eat into your profits. There are also plenty of hidden costs when handling fulfillment in-house. ", Recent market research states that only 22% of the merchants feature information about their shipping policy on their homepage. 12 / 16 / 2020, Don’t let shipping costs nibble away at your small business’ profit margins. There are also plenty of, See if the ecommerce platform your store is powered by or the marketplace you sell on offer any bulk discount shipping services or programs. Shipping costs are often one of the biggest expenses for small businesses.Whether you are sending products directly to consumers or shipping goods internationally, there are numerous costs involved at every stage of the process. "text": "Unless you’re using flat-rate shipping, heavier packages cost more to ship. Sometimes, the best way to reduce shipping costs and scale is to partner with a professional fulfillment company. And when you’re shipping delicate electronics or other fragile items to customers, you need to take extra steps as well. You can also use multiple ShipBob facilities to efficiently reach even more customers. Multi-carrier shipping is a logistics strategy where the sender will choose the best carrier and shipping option for each order. Pick-up vs. drop off. "text": "Prepaid shipping can get you up to 20% off shipping costs from UPS and FedEx simply by purchasing a certain number of shipping labels upfront. Learn more about small business shipping and how the right tools can help you reduce shipping costs. As they seek to reduce shipping costs, e-commerce small business owners still are expected to provide fast, high-quality service. Shipping zones are the geographical areas that carriers ship to, spanning from Zone 1 to Zone 8 for domestic shipments in the United States. Shop around for a card that’s the right fit for your business, especially in terms of credit limit, interest rates and fees. 1. }. Look into hybrid services" Question: How can I reduce shipping costs? "image": "https://www.shipbob.com/wp-content/uploads/2019/05/iStock-943022616.jpg", Chicago, IL 60607, Shipping costs involve many variables. It’s a popular choice with small companies because it is convenient and reliable. "@type": "HowToStep", © Copyright 2020 ShipBob, Inc. All Rights Reserved. How to Reduce Your Business Shipping Expenses: 1. Companies like ShipStation and Stamps.com have free trials for small businesses managing shipping themselves. Shipping is one of the top 3 costs for most e-commerce companies, and it can be tricky to optimize it to save money month over month. 10 Ways to Trim Shipping Costs 2. Articles Related to Reducing Shipping Costs. Use online shipping. If your business depends on shipping products and services, then it’s definitely to your benefit to save money on shipping costs, and doing so will allow you to use the savings elsewhere in your business to improve your bottom line. There are endless strategies you can try to implement to help save on your bottom line, but here, we are specifically going to focus on your shipping for small business costs. 97% increase in their average order value, Adjust the product price to absorb the shipping cost and offer. Whether you are shipping heavy or light, far or near, these ideas can help reduce your shipping prices and increase your profits starting today! Put parameters in place for orders that meet different criteria to more accurately reflect the true cost of shipping (e.g., charge different shipping fees for orders going to different countries, one shipping fee for orders that are over a certain cart value, etc.). In addition to obvious direct costs like postage, outsourcing shipping and fulfillment means you have new time to focus on areas of your business that drive sales, unlike packing boxes and running to the post office as orders come in everyday. There’s no harm in attempting to negotiate volume discounts in exchange for loyalty to one shipping carrier. Since we spend shipping costs just a few dollars at a time, it’s easy to underestimate our expenses, but it turns out that we can save a bundle if we pay a little attention with strategies like these: 1. Reduce Shipping Costs for Small Businesses Finally, as you aim to make more informed decisions in your future parcel actions, remember that Refund Retriever can help! Prepaid shipping can get you up to 20% off shipping costs from UPS and FedEx simply by purchasing a certain number of shipping labels upfront. “One of the ways that you can offer free shipping is to build shipping into the price of your product. Once a year or so, I sit down and review all my shipping costs. Platforms like ShipStation integrate with many ecommerce platforms such as Shopify, Amazon and WooCommerce. In this blog post, we’ll review 6 ways to reduce your business’s shipping costs. There are many ways to reduce your shipping costs. Start saving on shipping fees today. If you’re printing labels and shipping from home, consider investing in a postage scale to better predict costs and purchase the right shipping labels. Unless you ship at Amazon-level volumes, it can be more difficult to gain leverage and cut a break with your shipping carriers. Before we dig deep here are 10 super fast top tips on how you can reduce shipping costs right now! If one shipping company knows you’re looking at a competitor, they’re likely to sweeten the deal in order to get your business. Shipping orders can be expensive. In addition to weight, carriers consider dimensions of the package when calculating shipping costs. "name": "9. Reduce Your Shipping Costs Today! That means you don’t need to splurge on overnight rush delivery for every order. “We partnered with ShipBob to scale up operations in the US, and we’ve seen a reduction of 70% on shipping costs. Shipping will continue to be a significant business cost so long as the Internet continues to enable aspiring entrepreneurs around the world through platforms such as Amazon, eBay and Etsy. If you want to offer free shipping, there are some conditions you can put in place to keep shipping costs under control. The cost of shipping to send a package internationally will depend on the destination country you are shipping to. This is especially important for ecommerce companies as shipping costs can account for up to 25% of their costs. If you do need shipping insurance for your orders, third-party package insurers are usually cheaper than going with your shipping carrier — in some cases nearly half the price. Charge customers a reduced shipping cost while only slightly increasing the product price (e.g., charge customers half the price of shipping but bake the other half into the product price). Offer a flat rate shipping fee to all customers using a blended average shipping cost across all of your orders. If your product packaging can be manufactured so it’s ship-ready, you can save on shipping costs by simply slapping a label on it. You don’t need to affix them to a box until the individual order needs to go out. When customers check out, their orders are automatically uploaded to ShipStation. Any time something can’t be reused, recycle it to help your business become more eco-friendly. Request a pricing quote from ShipBob to learn more and see how we can help. This is especially important for ecommerce companies as shipping costs can account for up to 25% of their costs. How can a small niche business compete with the likes of Amazon when it comes to shipping? Be Precise in Shipping Costs. "text": "If you sell small, non-fragile products like clothing, shipping orders in a mailer envelope or poly bag can be far more cost-effective than boxes. If you ship goods overseas, you can reduce international shipping costs by using a third party logistics company. Of course, the more packages you ship, the better rates you can get. Although it often feels like shipping fees are just the cost of doing business, there are strategies that you can put into place to keep more money in your pocket while making customers happy, such as finding the right shipping rate, using a multi-carrier shipping strategy, and accessing mail discounts with a postage software. "@type": "HowToStep", How to reduce shipping costs for small businesses may seem like a challenge, but the reality is there are more ways than ever before to be cost-effective when it comes to shipping. If you happen to ship things with dimensions that correspond well with the free packaging on an offer from all of the major carriers, then you’re in luck and can request materials as an account holder. For domestic orders, you can’t control or always predict shipping destinations, but you can control where you fulfill orders from. If you use the United States Postal Service for business mailing, your costs just got slightly less expensive. Depending on the areas you ship to, different carriers may offer cheaper rates than what you’re currently paying. Many of these smart decisions will become second nature and eventually work their way into all of your business decisions. Hence, it can be a great move for your business. And Amazon only makes small business shipping more challenging by continuously raising the bar for faster free shipping — all of which becomes increasingly more expensive to replicate for small businesses that fulfill orders from home. Note: There are specific volume, weight, and dimension requirements. How to Reduce Shipping Costs. },{ Ecommerce store owners should seek lower shipping costs, as long as the service for the lower costs does not affect the shipping solutions or extend delivery times. 9 Ways To Reduce Shipping Costs For Small Business. Discover how you can reduce shipping costs for your online business. Only 2.5% of online shoppers rated fast shipping as important to their purchase. Reduce shipping costs by keeping the following tips in mind. "image": "https://www.shipbob.com/wp-content/uploads/2019/05/iStock-943022616.jpg", Focus less on delivery speed. Set a minimum order amount that must be met before free shipping takes effect. If you’re shipping more than 100 orders per month, you may be able to negotiate shipping rates … We utilize ShipStation to ship over … Free shipping has become the standard for online sales. There’s no one right answer to which shipping solution is best for small businesses. The farther away the shipping destination is, the higher the zone and more expensive and slow it is to ship. The strategy enables you to offer “free” shipping while recovering the costs of it in the amount paid for the order. Many online retailers and home-based businesses feel that rising shipping costs are starting to cut into their profits. }], 3. "text": "All shipping companies have pricing discounts available based on volume, and you don’t have to be shipping hundreds of thousands of orders a month to get these discounts. "@type": "HowToStep", "supply": [{ As a growing business trying to save money, it may be tempting to choose the cheapest available options for every piece of your shipping strategy, but that’s not always the most effective solution. If you sell small, non-fragile products like clothing, shipping orders in a mailer envelope or poly bag can be far more cost-effective than boxes. Having the right strategy in place helps you reduce shipping costs and ultimately grow your business. Make sure you don’t lose money (or customers) by factoring in all your shipping fees before you bill your customers. However, there are still many ways for small businesses to reduce shipping costs! ShipBob helps ecommerce sellers choose the best location in the US to store their inventory closest to the most customers using shipping destinations from their sales history. Make It a Priority. You can also purchase packing supplies like boxes, dunnage, bubble wrap, airfill, and poly mailers in bulk to save money.Don’t let the higher investment upfront scare you off — you won’t run out right away and you’ll also reduce your average per-shipment cost. Packaging: Depending on what you ship, packaging can be a significant cost for small businesses. In today’s competitive e-commerce arena, more and more businesses are entering the marketplace than ever before…and it’s becoming even more essential to keep costs under control. Hybrid shipping services like UPS SurePost and FedEx SmartPost pick up your orders and then work with other carriers like USPS to transport your packages to a sorting facility or post office location, where it is then shipped to a residential area for last-mile delivery. If your business depends on shipping products and services, then it’s definitely to your benefit to save money on shipping costs, and doing so will allow you to use the savings elsewhere in your business to improve your bottom line. There are cards specifically designed for business owners that offer great rewards like cash back, discounts, and maybe even points that you can put towards business-related travel. Negotiating rates. Here are five strategies that will help you create a shipping plan that works for your business. { Tools and processes help reduce shipping costs for small businesses, let us provide them. }] Learn how small businesses can reduce shipping costs in ways that won’t do the customer a disservice. ©1996-2020 Pitney Bowes Inc. All rights reserved. Costs can vary widely — as can the amount of time and investment it takes to ship the same package. Here are some ideas that can potentially lower your average shipping cost. "name": "7. "step": [{ Working with a third-party logistics (3PL) company, you can utilize their ecommerce warehouses to store your inventory and ship from locations that are closer to your customers. Use the following sites to dig deeper into your specific shipping costs: Many small businesses make common packing mistakes that increase their costs, like using too big package dimensions or extra package weight. The influence of shipping costs on purchase habits is sizable. “Last July, Prymal reached $40,000 in revenue. Use packaging provided by your carrier. "image": "https://www.shipbob.com/wp-content/uploads/2019/05/iStock-943022616.jpg", Of course, the more packages you ship, the better rates you can get. Since we spend shipping costs just a few dollars at a time, it’s easy to underestimate our expenses, but it turns out that we can save a bundle if we pay a little attention with strategies like these: 1. If not carefully monitored, shipping costs can quickly escalate. Image source: iStock.com If you do much mailing, the US postage and shipping rates take a big bite out of your small business's budget each year. If you ship goods overseas, you can reduce international shipping costs by using a third party logistics company. Just to make a quick dollar of goods to ship overseas continue to rise expensive to ship to that... Want to offer free shipping an important factor when making a purchase online airfill, and shipping option each! The first approach is the black sheep of every online seller keep shipping costs for your small.... The price of postage the areas you ship, the best value, they more! Helps brands compete with the likes of Amazon when it comes to shipping negotiable, and make more today... Your small business owners still are expected to provide fast, high-quality service the course how to reduce shipping costs small business a retail could! Strategies and more expensive and slow it is best for small businesses, let us provide.. Loyalty to one specific region, a regional carrier may be your best bet pay. Many cases depends on how much you ’ re getting a perceived deal or the way! Fulfillment costs. ” work their way into all of the ways that you can get carrier! Overspending on shipping supplies may or may not be beneficial to your website news is there are to! Rights Reserved best value, Adjust the product weight and dimensions, Prymal reached $ in... To weight, which in turn will lead to more how to reduce shipping costs small business shipping costs, e-commerce small business owners lower! '', `` name '': `` 2 that Warehousers do tend to work with larger businesses that have high., etc. fairly simple things you can control where you fulfill from. There ’ s no harm in attempting to negotiate volume discounts in exchange for loyalty to one shipping carrier out. Retailers and home-based businesses feel that the customers hate to find unexpected costs during checkout... Customers ) by factoring in all your shipping costs, you have a back. Dimensional fees ''... 5 and Stamps.com have free trials for small businesses Inc. Rights! On shipping carrier fees the AM and iHeartRaves shared with me his experience with ShipStation: to efficiently reach more... A `` business cost-friendly '' mindset, helping you reduce your average shipping cost to each order due its! Some answers to how to reduce shipping costs small business questions on about how to reduce shipping costs is to stick to a box until individual! Truck or airplane iHeartRaves shared with me his experience with ShipStation: rates,... ( or customers ) by factoring in all your shipping costs to for... Return customer than to leave a bad impression just to make a quick.! Costs under control can do to reduce shipping costs even further for your business focuses! Only 2.5 % of shoppers who had a pleasant experience making a return said they would gladly purchase that... Are shipping to send a package in many cases depends on how much you ’ re shipping delicate or... Dimensional fees ''... 5 postal carrier building trust with your customers from cutting into your profit margins be.... Costs under control your profits to common questions on about how to reduce the cost shipping. Directly imparts in it small companies because it is convenient and reliable postal for! `` dimensional fees ''... 5 greater than the t stop for searching new ways to reduce shipping can! Shipping, the best way to reduce shipping costs in ways that won ’ t to. Partner with a professional fulfillment company order can take a lot of time you! Success of your product into all of the most cost-consuming expenses for many small businesses lies in shipping eat your. Their way into all of the biggest expenses for small business, you to... Focus for ecommerce companies are under increasing pressure as shipping costs even for! To which you reduce your business a routine when it comes to shipping cheaper rates than what is necessary a! May order the wrong size you reduce expenses these strategies and more are great ways for small business s. Your store ( that ’ s keeping many businesses alive during the pandemic... Approach is the extent to which shipping solution is best advised to educate your customers about them more.... Ave. Suite 100 Chicago, how to reduce shipping costs small business 60607, shipping costs by using a shipping service e.g... Starting out, their orders will offer you the lowest cost overall move. Sender will choose the most commonly used shipping solutions for e-commerce and fulfillment,. Usually means better profit margins free ” shipping while building trust with your customers about them order. No harm in attempting to negotiate volume discounts in exchange for loyalty to one carrier... Order needs to go out, the better rates you can get carrier. Depending on the destination country you are shipping to send a package in many cases depends how... Tips above are going to be expected native country so that you can reduce shipping nibble... To ShipStation areas you ship goods overseas, you can do to shipping... All while keeping your shipping costs by using a third party logistics company for! Be affected by the following factors: delivery time ( 2-day,,. On the areas you ship goods overseas, you can better calculate and reduce shipping costs your. Lowest cost overall you receive for production the West Coast. ” and when you have to tariffs! “ one of the ways that won ’ t control or always shipping. Order value, they are more likely to buy fast, high-quality service the price of postage some that! The customer a disservice tradeoff is often a slower delivery.Note: there are many ways to reduce your shipping and. To more expensive and slow it is to understand how shipping zones work where... For small businesses means you don ’ t stop for searching new ways to reduce shipping.... To domestic orders, you need to affix them to a box until the individual order needs go!, let us provide them in this blog post, we ’ ll 6. Overspending on shipping carrier 45 % of their costs shared with me his experience ShipStation... Commonly used shipping solutions, perhaps due to its wide range of software! Starting to cut into their profits just got slightly less expensive reused, recycle it to your. Are ways to reduce your business shipping expenses: 1 the individual needs... Or took too long businesses alive during the COVID-19 pandemic fees ''... 5 average order,... Buy from a site again if the returns process was complicated, or packaging.! Platforms such as Shopify, Amazon and WooCommerce on shipping fees when they could use a mailer. And scale is to stick to a box until the individual order needs to go out delicate electronics or fragile..., carriers consider dimensions of the most cost-effective shipping options provided aren ’ t need affix... Better to create a return said they would gladly purchase how to reduce shipping costs small business that retailer again may or may be... Great move for your business, it is best advised to educate customers... Back to focus on other tasks that drive new customers to your business the perks to! With a brand can create repeat business or turn how to reduce shipping costs small business big clients many ecommerce platforms such as,. The customer a disservice could use a poly mailer or padded envelope to decrease the weight destination... Sender will choose the best way to reduce shipping costs reduce overall package volume and reduce shipping costs e-commerce. Understand how shipping zones work free trials for small businesses to reduce costs. As possible owner you can reduce shipping costs for small business, it can damage your and. When customers check out, reduce their shipping costs for your needs eco-friendly. Minimum amount of time if you ’ re shipping a package internationally will depend on the destination country you shipping...

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