Shipping can be the trickiest part of running a small business, and it can also be the most pricey. If you’re looking for a way to cut down on business costs, the best way is to rehaul your shipping system, from vendors to customers. Read on to find out more about shipping solutions and the best small business shipping services!
Shipping doesn’t start with sending products - it starts with buying supplies, which is why it’s important to choose the right vendors.
To choose the right vendor, you can use these simple steps:
The best way to compare vendor options is to create a scoring system based on the traits you need and want from a vendor. Using your scoring system, you can give each vendor a numerical grade in each area of concern, total their scores, and see which vendors have the highest score.
Finding the right shipping partner is critical for several reasons. A single reliable, trustworthy shipping partner will save you time, stress, and money.
Your customers hold you accountable for good shipping, which can make or break your business. Shipping fees can also eat up your profits if you don’t balance service with affordability.
There are 8 main types of small business shipping services.
Full truckload is when an entire vehicle (or several) is used to drive a shipment from a distribution point to the destination. This can be a reliable, fast delivery method for large shipments, especially for perishable items.
Less than truckload is when a vehicle carries shipments for several companies at a time. This is cheaper than a full truckload but is slower due to multiple destinations.
Flatbed shipping is when a flatbed carries shipments that aren’t in an enclosure. This is good for shipments that aren’t easily packaged or need to be lifted by a crane.
Intermodal shipping is when a shipment is transported by 2 or more of the 3 shipping modes: air, water, and land. This is typical for international shipments.
Rail service shipping is when a shipment is transported by rail. This is good for large shipments, slow delivery, and cheap rates.
Airfreight is when a shipment is transported by airplane. This is fast but expensive.
Ocean freight is when a shipment is transported by ship. This can take the form of sea containers or tankers that transport liquids and gases.
Milk run shipping is when a shipment is delivered from a central warehouse. It is good for repetitive, regular deliveries.
We have 10 main tips for managing costs for small business shipping!
Before you do anything, you need to crunch the numbers to understand what exactly you need from small business shipping services.
Here are some ways you can spot what can save you money:
You may like your current carriers, but it’s good to explore other small business shipping services to see if there are any cheaper providers who are just as trustworthy.
Here are some tips for exploring your shipping options:
Another way you can save money is by packing intelligently since some shipping services charge based on the packaging and not the actual product.
Here are some ways you can package intelligently:
Now that you’ve built your foundation, it’s time to plan your shipping strategy.
Make sure to include these factors in your strategy:
If you’ll use a 3PL, provide them with your list of desired shipper traits and let them do the work.
Once you’ve established rapport with small business shipping services, try to negotiate for lower fees using 2 main strategies: benchmarking and cross-modeling.
Benchmarking consists of looking at a company with similar products, prices, and shipping volumes, then using their shipping fees as a benchmark for negotiations.
Cross-modeling consists of learning where your carrier has the highest profit margin, finding ways to boost their profit margins even more, and using this leverage to negotiate for lower costs.
If you handle high volumes of orders, you can save yourself time (and thus, money) by automating with shipping software.
There are many free or cheap shipping software that can:
This may sound counterintuitive, but you can actually save on shipping costs if you motivate customers with free shipping.
If it doesn’t increase your prices too much, you can include the average cost of shipping in every product’s base price. This maintains your profit margin, covers shipping, and delights customers since they only have to pay for a set price.
If it does, you can offer free shipping for orders in a certain price range. This motivates customers to buy more to reach the price minimum, increasing your profit margin even with shipping included.
If you often take out insurance on your shipments, you can save money by insuring deliveries with third-party companies.
Compared to insuring through carriers, third-party companies often charge half as much.
If your shipping costs are still too high, you can cut down on expenses by limiting your shipping distance.
The farther the distance a shipment has to travel, the more you have to pay. Check your carriers’ shipping zones and see which zones you can afford to cover for your customers.
Finally, you can use a freight shipping marketplace like GoShip to easily compare freight carriers, their services, and their prices.
Visit GoShip.com today and find the most affordable carriers that are right for your business!