As a small business owner, you already know every year there are shipping rate increases. This year being no different. You can deal with this, one of two ways. You can eat the increase, which eats into your profits, or you can pass the increase on to the customer. Let's assume you pass these costs on to your customer. At some point, it becomes cost prohibitive to ship certain products, and cheaper for the customer to purchase the same item locally, or decide that they really do not need your item because of the high shipping rates. Both hurt your companies sales and cuts into your bottom line. You can potentially delay or stop this from happening by evaluating your shipping process, for each and every product that you ship, and making changes where needed.
1-Negotiate Better Shipping Rates:
Negotiate better rates and discounts with the major shipping carriers from small parcel delivery companies to the LTL Freight Truck Lines. With a little negotiation you can get a discount off of the "list" rate. Usually the more packages you ship, the better discount you can get. Call the different shipping companies you would like to ship with, and just ask to meet with a Sales Representative from each company. Then let the negotiating begin!
2-Cut Shipping Costs:
Re-evaluate your shipping practices. Does your company ship everything from that 2 ounce thimble to the 80 pound weight bench by the same shipping carrier? If you are, you are leaving a lot of money on the table. For example any product weighing less than 13 ounces can ship via First Class Mail for from $2.04 to $3.63, even to a (2015 Rates) Residential address. The same item via another ground Shipping service to a residential address may cost you $10.00, or more! You need to evaluate all of the different services offered by the competing delivery companies.
Here is a small list of Low Cost, non-expeditied delivery shipping options you should compare rates on, each has it's own pros and cons:
*UPS: Ground , Surepost
*FedEx Ground, Smartpost
*Regional Couriers
*USPS, First Class, Priority Mail, Flat Rate Boxes, Regional Rate Boxes, etc
*Freight Brokers, often get better rates than you can even negotiate directly with a trucking company
3-Purchase Shipping Supplies at Wholesale Prices:
We, here at Fastpack Packaging, offer Shipping Supplies at Wholesale prices. We offer over 10,000 different Shipping Supplies & Packaging Supplies, and if we do not have the item you need, we can probably get it! We offer Corrugated Cardboard Shipping Boxes, Bubble Wrap®, Bubble Mailers, Carton Sealing Tape, Tissue Paper, Kraft Paper Rolls, Poly Bags, Poly Courier Mailers, Clear Plastic Mailing Tubes, Cardboard Mailing Tubes, Stretch Wrap and so much more all at wholesale pricing. No Minimum order required to get the great wholesale pricing!
4- Use Proper Size Packaging:
A box that is too large, not only costs more than a smaller, proper size box, it weighs more adding to your shipping cost, and it could also be costing you more due to dimensional weight. What is dimensional weight? Long story short, a pillow that weighs 1 lb, and ships in a 12"x12"x12" box may cost you the 11lb rate if shipped through certain shipping companies, due to the size of the box. So make sure to use the proper / smallest size box that you can.
5-Combine Shipping:
Combine as many products into as few packages as possible. For example, we sell cases of Carton Sealing Tape. We just had a customer that purchased 25 cases of tape. If we were to ship them 25 single cases, our cost (passed to the customer) would be $10.35 per case, x 25 cases = $258.75. BUT we can put 5 of those cases into a larger master carton box, and it costs $22.91, x 5 master cartons = $114.55 / 25 cases = $4.59 per case! That is a $144.20 savings on shipping! Needless to say, the customer is happy, and we are happy! :)
6- Take Advantage of your Discount:
Get suppliers that ship to you or drop ship to your customer, to use your Shipping Account #, to take advantage of your shipping discount. Otherwise they may just charge you the list rate or their potential lesser discounted rate. Ask them to combine into as few packages as possible, see Tip #5 above.. Attention: Information is just coming out that UPS is rolling out what is being called by some a "Drop Ship" fee. From what we know, it sounds like UPS will start charging a 2.5% fee when you use your account # and ship from another address than your own. We do not have all the details, make sure to research this and take it into account when using your shipping account # to ship products from suppliers. Also do you research if you ship via FedEx, they have not announced a "Drop Ship" fee, but always be researching so you will not be caught by surprise!
7-Audit Your Invoices:
Hey, we all make mistakes right? So do the shipping carriers. Also, some carriers offer a money back guarantee if your shipment is not delivered on time. Audit your bills for errors. Get refunds!
8-Expedited Shipping:
Compare delivery times before shipping. Our Corporate Headquarters is located in Florida. We can ship a package from this location in North Florida to Miami by FedEx Ground and it be there the next day. Ground costs a lot less than Next Day Shipping. A package from Florida to Florida is a 1 day / next Day delivery, via the lower priced ground shipping rate. This only works for small area's, but you can save your company large amounts of cash by shipping these packages by ground service. Always check multiple shipping methods before just doing what you have always done.
9-Take Advantage of Free Supplies:
Shipping via USPS Priority Mail? See if they offer a free box that will fit your product.
10- Offer Local Delivery:
You can often deliver a package locally, in a company vehicle cheaper than having a third party shipping company do it for you. Especially if you have multiple packages going to the same address. You will spend the same amount of money in gas to deliver one package as 100 packages to the same address. Why pay a per package rate through a delivery courier or service that is going to the same address?