The shipping process is an unavoidable part of every business. We live in an increasingly global world, which means that not all of your customers can swing by your physical location to pick up their goods. This is a good thing. Globalization means more customers and, consequently, greater profit for your business.
However, it also means your business has to spend more up front to get products where they need to go. Shipping is an expense that can ultimately break your business’s budget. Luckily, there are plenty of ways to reduce the cost of shipping and save money. Here’s how to cut your business’s shipping costs.
Understand What’s Included in the Final Cost
What determines shipping cost in the first place? You should know if you want to reduce the overall cost of shipping goods. Shipping fees include:
- Courier and labor costs
- Import/export fees (for international shipping)
- The boxes and packaging materials you use
The first two are easy enough to calculate before shipping, but the last is a bit more complicated. Most carriers (USPS, FedEx, and UPS) use dimensional weight to determine the final cost of shipping. Essentially, this means that carriers will look at both the weight and size of your package and use the higher number between the two to calculate your final shipping cost. If you send out a lightweight item, the cost of shipping will depend on the size of the box, but if you send out a heavy item, the cost of shipping will depend on product weight.
How Can I Reduce Shipping Costs?
There are a few ways to cut your business’s shipping costs:
Choose the Right Boxes
Because of dimensional weight, you must choose the right box. In general, you want to use as small a box as possible. The smaller the box, the less it costs to ship. Measure your product first and then look for a box that’s slightly larger than its measurements.
Reduce Package Weight
You can’t magically make your product less heavy, but you can reduce overall package cost by using lightweight packaging material (such as bubble wrap and foam inserts) and corrugated boxes.
Use Flat-Rate Shipping
Flat-rate shipping means that every item, regardless of size, shape, and weight, costs the same to ship. This is very beneficial for businesses that frequently ship large, heavy products. Most carriers offer flat-rate and regional-rate shipping options, so make sure to check them out.