Shipping costs are a high expense for new business owners. High shipping costs eat into profits and deter potential customers. Here are five actionable tips reduce your business’s shipping costs and keep operations running efficiently.
1. Use Packaging Optimization To Decrease Weight and Size
Packaging plays a bigger role in shipping costs than you might think. Most carriers use dimensional weight pricing that encompasses the size and weight of your package.
To cut costs, evaluate your packaging and look for opportunities to reduce unnecessary bulk. Ship items in boxes that are just the right size and remove excess fillers. Consider lightweight yet durable materials, such as swapping heavy cardboard boxes for poly mailers for small, non-fragile items.
Maximize shipping pallets for shipping goods by calculating the weight and size of packaging and products to maximize durability. This small change saves money over time and leads to more productive shipping processes.
2. Leverage Multiple Carriers To Find the Best Shipping Rates
Sticking with one carrier might feel convenient, but it may not be the most cost-effective strategy. Shipping rates vary widely between carriers based on factors such as destination, package dimensions, and shipping speed. Compare quotes from different carriers and find the most favorable prices that meet the business’s demands.
Some businesses use tools like shipping rate calculators or third-party platforms that aggregate rates from multiple providers. Diversify carrier options to strategically choose the most economical solution for each shipment.
3. Implement Inventory Management for Swift Order Fulfillment
Poor inventory management leads to inefficiencies and increased shipping expenses. Businesses with disorganized inventory have to split orders into multiple shipments, incurring higher costs.
Streamline inventory management with software that tracks stock levels, optimizes warehouse organization, and stores items closer to their shipping destinations. For example, businesses that leverage multi-warehouse strategies ship products from the location closest to the customer, cutting down on time and transportation costs.
4. Offer Shipping Incentives To Encourage Large Orders
Shipping small orders adds up quickly. Consider implementing incentives that encourage customers to place larger orders. For example, offer free or discounted shipping for orders that exceed a specific spending threshold.
This approach reduces the amount of shipping supplies and increases the average order value to boost revenue. It’s a win-win scenario that works particularly well in e-commerce settings.
5. Explore Technology Solutions for Improved Shipping Efficiency
Technology tools are invaluable for reducing shipping costs while improving overall operational efficiency. Shipping software platforms like ShipStation or Easyship compare rates, automate labels, and optimize packaging selections.
Additionally, some tools provide advanced analytics to identify areas where you might be overspending. Automation features, such as batch label printing and scheduled pick-ups, can save time and decrease the chance of expensive errors.
Reducing shipping costs is critical for running a more profitable, competitive business. Start with one or two of these suggestions that resonate with the business’s existing challenges. From there, continue to improve the shipping process. The savings will add up over time and position your business for long-term success.
