Why is Shipping So Expensive: A Helpful Guide to Reducing Shipping Costs
Every business should reduce its shipping costs. However, many businesses don’t have the time or insight to make it happen.
Thankfully, we here at Box Genie are shipping experts who can help:
Tip 1: Know Your Customers and Products
The first step to reducing your shipping costs involves knowing your customers and products. Here are some questions you need to ask about your customers so that you can begin developing an effective cost-cutting strategy:
- Where are your customers located?
- How fast do your customers need your items?
- What types of packaging appeal to your customers?
Here are some questions you need to ask about your products so that you can ship them in a cost-efficient and time-efficient manner:
- Do your products need special handling or protective packaging?
- Can your products be better arranged or designed to maximize the space within a package?
- Can your product packaging be better designed to minimize weight and space within a package?
Tip 2: Comparison Shop Different Carriers
Next, you need to comparison shop different carriers as they likely all charge different rates. If you’ve been using a single carrier without considering costs, you’re likely losing money.
For starters, check out some of the big carriers, including FedEx, UPS, and even USPS. Many of these carriers have their rates posted online, so it’s easy to locate the information you need to make a decision.
In addition, many of these carriers offer special business services and discounts that could prove to be extremely beneficial.
Tip 3: Consider Regional or Hybrid Services
While checking out national and international carriers, you may also want to consider regional or hybrid shipping services. If you primarily ship to a specific region, then using a regional carrier could help you lower your shipping costs. For instance, regional carriers focus on the East Coast, the West Coast, the South, etc.
On the other hand, larger carriers like UPS and FedEx offer hybrid services termed “SurePost” and “SmartPost,” respectively. These services involve arranging for order pick up so that your packages can be sent to a nearby sorting facility and finally put on a truck for last-mile delivery.
But while these services may be cheaper, they may also be slower — so this is why knowing your customer and their expectations are important.
Tip 4: Don’t Be Afraid to Negotiate
Even with these rates in mind, you may have more power to negotiate than you think. If you can get multiple carriers to compete for your business, you might be able to get a great deal. When attempting to negotiate, make sure to know all the details about your shipping operations, including your package volume, package dimensions, package weight, and more.
High volumes are particularly useful for negotiating shipping costs, so try to leverage your volumes the best you can.
Tip 5: Reduce Package Weight and Size
One of the most obvious but challenging ways to reduce your shipping costs is to reduce the weight and size of your packages. In theory, this seems easy, but in reality, it’s easier said than done — especially if you have already established your packaging products.
You may want to consider using different packaging altogether. For instance, if you’re currently using cardboard boxes, you might want to consider switching to cheaper and lighter poly mailers instead. If you’re unable to switch your packaging type, you may want to consider changing the size of your packaging. Perhaps you’re using boxes that are too large for the average order.
If you’re having trouble finding the right type and size packaging for your shipping needs, feel free to reach out to the packaging experts at Box Genie for personalized assistance. Box Genie also offers customized branded packaging to establish your brand image and boost your brand awareness simultaneously.
Tip 6: Use Packages From Your Carrier
On the other hand, you may want to consider using packages provided directly by your carrier. Many carriers offer flat-rate shipping fees for different types of envelopes and boxes. So instead of paying based on different sizes and weights, you can potentially get a better deal.
Check out some of the different prices for these shipping options from USPS and choose the most cost-effective option for your business:
- Flat rate envelope with dimensions of 12 ½” x 9 ½” costs $6.95 at the commercial base rate or $7.35 at the post office
- Small flat rate box with dimensions of 8 11/16” x 5 7/16” x 1 ¾” costs $7.50 at the commercial base rate or $7.90 at the post office
- Medium flat rate box (top loading) with dimensions of 11 ¼” x 8 ¾” x 6” costs $12.80 at the commercial base rate or $14.35 at the post office
- Medium flat rate box (sideloading) with dimensions of 14” x 12” x 3 ½” costs $12.80 at the commercial base rate or $14.35 at the post office
- Large flat rate box with dimensions of 12 ¼” x 12 ¼” x 6” costs $17.60 at the commercial base rate or $19.95 at the post office
Tip 7: Print Your Postage Online in Advance
If you’re unable or unwilling to use flat rate shipping products from your carrier, you can still cut costs by printing your postage online and paying for postage in advance. Paying for shipping online can save 16% on USPS priority mail orders. Prepaying for your shipping can save up to 20%.
Tip 8: Ship From Multiple Locations
Now that you know your customers and shipping operations better, you should consider shipping from multiple locations to reduce shipping distance and cut down costs. This means putting your products in multiple warehouse locations and routing orders and fulfillment to the closest warehouse location. For instance, you may want to have a warehouse closer to the East Coast and another warehouse closer to the West Coast.
Tip 9: Outsource Fulfillment
On the other hand, if you’re not crazy about finding warehouses and managing these logistics on your own, you should consider outsourcing your fulfillment to a third-party logistics provider.
Also known as a 3PL, these companies can handle as much or as little of your shipping operations as you need. They can handle storage, picking, packing, returns, and more.
Tip 10: Use Third-Party Shipping Insurance
The last thing you can do to reduce shipping costs is utilize third-party shipping insurance instead of the shipping insurance offered directly by carriers. Shipping insurance is important, but you don’t have to spend a fortune on it.
Carriers typically charge around $0.85 for every $100 of shipping, whereas third-party companies charge around $0.55 for every $100. Based on 100 orders under $100, you can easily save $30!
The Final Rundown on Reducing Shipping Costs
With these valuable tips, you’ll be able to reduce your shipping costs without sacrificing speed or service, helping you grow your business. For more shipping and packaging insights to help you save money or start designing your packaging today, check out our online resources.
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