When it comes to shipping costs, small businesses sometimes find themselves paying more most of the time, especially when trying to compete with powerhouses like Amazon. With ever-increasing fees, how is a small business expected to survive? It might seem obvious to simply cut and lower shipping costs, but that assumption would be a mistake.
With the growth of the internet and advancements in technology in recent years, there are now more resources available than ever before. Discover six ways you could lower the shipping costs for your small business.
Table of Contents
1. Compare Overall Costs
This may seem like a no-brainer, but it should still be addressed. First and foremost, find a carrier that offers the lowest overall cost without sacrificing the quality of service or deal-breaker features. While this may seem simple, it oftentimes proves to be the opposite—companies will attempt to showcase how paying more gets you more. It can be easy to forget that you need to stick to your tight budget when the deal you’re getting sounds tough to beat. While sometimes it is worth it to pay more for additional benefits and promotional deals, if you’re worried about shipping costs being too pricey, stick to your budget.
2. Negotiate Rates
There is a common misconception that small businesses cannot negotiate due to their size, but that is not the case. You can (and should) negotiate to get what’s best for your company. In many cases, rates are based on the volume of shipments. If you are shipping a high volume of shipments, you may be able to negotiate for a lower rate. Likewise, the length of time you’ve been with that carrier may help you negotiate a better price as well.
In those situations where you’ve been a long-time customer of your carrier, your success may begin to affect theirs. If lowering your rates helps you grow and expand, then this could, in turn, lead to the growth and expansion of your carrier. This is why it never hurts to try.
3. Use Provided Packaging
Whenever possible, try and use the packaging provided by your carrier. Most carriers now offer various packaging options with some being standard boxes without the carrier logo on them.
The main reason for using their packaging materials is to avoid accruing any additional fees for boxes that don’t meet your carrier’s requirements. Remember that size, weight, and dimensions all factor into shipping costs.
Using your carrier’s packaging material ensures that you are compliant with their requirements, which saves you time, money and any concerns about compliance.
4. Outsource Your Shipping Carrier
One of the easiest ways to cut down on shipping costs is to hire a 3PL or third-party logistics provider. They can efficiently handle all of your order fulfillment, inventory management, and shipping needs.
3PLs can optimize your supply chain system which will, in turn, provide customers with a smooth and enjoyable experience. By using 3PLs, you will be able to save money on warehouse costs, transportation costs, standard carrier costs from big-name brands such as FedEx and UPS, and training costs.
3PLs are especially beneficial if you’re shipping hazardous materials. They will know all of the laws, understand safety regulations, and have the equipment necessary to be compliant.
Additionally, if you choose to outsource a 3PL, you will also find yourself free to focus on other pressing matters concerning your business, such as training or management issues.
5. Make Sure Pick-Ups and Deliveries Are Included
Some carriers will offer a free pick-up and delivery service. This is a great way to cut down on overall shipping costs. Having a carrier pick up your shipments and drop off any returns for free will keep you from spending money on return shipping labels and other postal costs.
Depending on the sizes of your items, handling drop-offs and pick-ups on your own could result in costs like vehicle rentals for larger items, personnel costs, and time.
By ensuring this service is offered within your carrier package, you can eliminate any stress potential high costs of returns.
6. Understanding Where Your Business Currently Stands
While the goal of every business is to grow and expand, you may need to be realistic. While your current carrier may provide you with the ability to ship items one-day internationally, you should ask yourself if that is something your business truly needs right now.
Where are you shipping to? If it’s the local area, try to find a local carrier that meets your needs but at a lower cost.
Whenever possible, leave room for growth and expansion but don’t over-extend your company’s finances to do so. Your company still has to be around in order for growth and expansion to take place.
Beat Back the Shipping Costs
Simply understanding where your money is going and where you can cut costs is enough in and of itself to help lower your shipping costs. Choosing carriers with cheaper plans that still meet your needs is a great step as well, and it should not be overlooked.
As a small business, it’s crucial to keep your costs low, especially your shipping costs. With these money-saving tactics in mind, you can feel confident in choosing a shipping carrier that best suits your company’s needs. Just because you are classified as a small business does not mean you are at the mercy of any company in any industry. Amazon may not have your shipping cost problems, but they probably once did. If they can do it, your business can too.
