Carriers increase their shipping rates every year. This makes shipping costs a major expense for any e-commerce business. You need to put much effort and spend a lot of time when you are buying your labels at the post office. Although shipping can be challenging, it should not limit your online business from thriving. You can spend less time determining how to lower the shipping costs and spend more time focusing on the growth of your business. Here are ways to reduce eCommerce shipping costs and increase your profit margins.
Combining Shipping Costs with Products
Majority of customers prefer to purchase their products on websites that offer free shipping. You can find ways to offer free shipping to your customers as an online seller, and still optimize your profit margins without spending much money. You can achieve this by injecting the shipping costs into the product prices. Carriers have up to 75 special charges such as fuel surcharges, or Saturday delivery fees. If customers pay for shipping, include all the extra charges in their bills to avoid incurring those extra costs. If you are shipping items that are small and cheaper to ship, you can slightly increase their prices. This will then help in covering the cost of free shipping of items to the customers.
Another aspect to consider is to research your competitors. Check how they handle their shipping costs. The cheapest cost may be the better option. However, if you cannot go too low, find how to spin the prices positively. At this point, shipping software can be helpful. For instance, USPS First Class Mail typically takes 3-5 business days to make a delivery. You can offer same day shipping for all the orders that the customers make. This means you will ship the products on the same day when the customers placed their order. Instantship calculator will help you to calculate USPS shipping rates instantly, and print labels from anywhere. This will help you in identifying cheaper and faster shipping option.
Shipping with Multiple Carriers
Shipping with multiple carriers can help you find the best possible rates by giving you a broader variety of rates. Using multiple carriers to ship can also give you an advantage in negotiating your rates. For example, if you mostly ship your items with FedEx, you may consider shifting up to 30% of your shipping volume to USPS or UPS. Carriers want the volume of the products you ship with them to increase. Therefore, they will negotiate lower rates with you. Your goal is to maximize your profit margins and do enough business with a carrier you prefer. You also get into business with other carriers to show what you could do with the carriers you prefer. This gives you an opportunity to negotiate with carriers such as FedEx or USPS.
Using an Online Shipping Platform
Using online shipping platforms like UPS is another way of reducing eCommerce shipping costs. The retail prices you pay at a post office may significantly differ from the commercial base rates you pay through an online shipping software. The software saves you time, allowing you can focus on other areas of your business that may need more attention. If you are shipping several packages in a week, you can offset the shipping software cost through the money you save on postal fees. You can also get priority mail delivery confirmation, free pick up services and shipping supplies when you use online shipping.
Shipping software offers you a platform to learn how effectively you can grow your eCommerce business. Using FedEx or UPS shipping services gives you that opportunity to keep running your business. You can use shipping software to compare the services of different carriers and choose the better option. Instantship calculator enables you to compare calculated UPS shipping rates and USPS shipping rates to find a suitable shipping method for your items. If you have a package that weighs about 2 lbs. and want it shipped to Seattle, you can use a Priority Mail Regional Rate Box A. This is a better option than the post office where they upsell you a Priority Mail Flat Rate, which may not necessarily mean it is the best option for shipping your package.
Reusing boxes for packaging is a great way to reduce the cost of shipping. Packaging boxes may experience wear and tear over time. However, the consumer will not know if the box was from a shipment return that you may have repurposed. The contents within the box should be safe and reach the customer in good shape. You should not ship a package in the manufacturer’s box to avoid the package getting stolen. In fact, many insurance providers refuse to accept claims for shipments in a manufacturer’s box. With the only option being to package with your own boxes, you can save a great deal of money by re-using them.
Using Packaging Provided by A Carrier
If you use your own packaging, you may face additional cost for the dimension of the box if it exceeds the size regulations set by UPS, USPS or FedEx. Consider using packaging provided by your carrier to avoid these extra charges. Carriers often offer incentives such as complimentary packaging to customers for their premium services. If you receive a Priority Mail Flat Rate envelope as a complimentary envelope, do not use them with First Class Mail when shipping to avoid them getting returned to you.
Using a Cost-Effective Cushioning Method
Brown paper fill is a packing material that is affordable and effective to use. Its malleable nature makes it easier to work well, and it is cheap. You can stuff the brown paper fill around the fragile items in the box to make sure the items do not collide. Cushioning the products is safe and affordable to ensure the goods are shipped to the customers in one piece. Some business owners avoid doing this because it leads to heavier and larger packaging that may slightly increase the shipping rates. However, you may prefer using this technique for fragile merchandise than paying for a return label due to the contents in the boxes breaking.