When the bulk of your business funds go to packaging and deliveries, it might be time to reconsider reducing shipping costs to improve your profit margin. Calculating the costs of shipping expenses can be overwhelming. Businesses need to consider:
- Shipping zones
- Weight and dimensions
- Delivery insurance
- Delivery speed
Fortunately, we’ve got some tips for eCommerce and small business owners to reduce shipping expenses and improve profit!
Tip 1: Choose Affordable or Free Packaging
Investing in packaging materials to keep fragile products safe is necessary, but expenses can quickly add up. While getting branded packaging is an excellent business and marketing tactic, it shouldn’t compromise your profit margin. Consider choosing generic or free packaging and shipping supplies from carriers. Aside from saving money spent on packaging, you also avoid up to 20% on additional dimensional fees with this tip.
Tip 2: Check Your Third-Party Insurance
Most major carriers overcharge customers for shipping insurance costs. Especially if you’re shipping valuable products, shipping can quickly become pricey. Consider third-party freight shipping insurance companies that offer full freight insurance for a fraction of the cost.
Tip 3: Keep Track of Dimensional Weight
Most carriers consider dimensional weight when shipping packages. This means that you need to be extra mindful when shipping large yet light items. If your oversized packages weigh less than their dimensional weight, consider looking for a carrier that doesn’t compute for dimensional weight.
Tip 4: Account for All Shipping Expenses
When calculating shipping costs, make sure that you factor in all special charges, including weekend delivery fees, signature fees, fuel surcharges, among others. While offering your customers affordable rates can be tempting, you might not notice that you’re taking the blow with this pricing structure.
Tip 5: Increase Product Prices
Selling your products at a higher price will give you leeway to offer more affordable shipping rates. If you can afford it, you can even consider offering free shipping. While this method seems counterproductive, research shows that customers find free shipping more appealing than purchase discounts. The simplicity of free shipping is highly attractive to customers.
Tip 6: Consider Multiple Carriers
By negotiating with different carriers, you’ll be able to keep up with the best services and rates, even if carriers don’t offer those packages upfront. By going with multiple carriers, you will eventually find the best carriers for every type of shipment type. Especially if you’re planning to expand your business, you should start looking into less-than-truckload and full-truckload carriers for your delivery options.
Tip 7: Get Online Freight Quotes
Finding affordable and reputable shipping carriers is arguably the most challenging aspect of reducing shipping costs. Thanks to online freight shipping marketplaces like GoShip.com, it’s possible to find the best deals from the major local freight companies in your area.
GoShip.com is a self-service platform that’s designed to offer free online quoting, easy booking, and customer support for your shipping needs. Find the best shipping rates in your area without the complicated process of haggling with a freight broker.