Shipping Costs

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3 Easy Ways to Reduce Your Small Business's Shipping Costs

July 30, 2018 - 11:00 am

Consumers have come to expect low-cost or free shipping charges thanks to the boon of internet shopping and the rise of online retailers that can negotiate discounted shipping rates. Small business owners know they need to compete, but eating the cost of shipping puts a big dent in their margins. While you may not have the volume necessary to negotiate steep discounts, there are some steps you can take to reduce overall shipping costs.


Boost volume for increased discounts

Major carriers offer discounts on volume. Increased volume equals lower per-package cost. With this in mind, remember that shipping costs go both ways. You pay to send parcels to your customers, and your own suppliers tack shipping charges onto their invoices. You can increase your volume by giving your suppliers your carrier account number and having them ship on your dime rather than adding the cost to your bill. This increased volume on your account will make your business eligible for greater volume discounts.


Take advantage of flat rate shipping

The cost and maximum weight for flat rate shipping varies by carrier. Flat rate may not be the best option for very light packages, but if your parcels weigh several pounds, the flat rate option may be the best way to go. It is worth the time to calculate the breakeven point for each carrier. For example, if you regularly ship five-pound packages, calculate the cost based on both variable and flat rates to determine which is least expensive. Keep in mind that carriers provide free packaging for flat rate shipping, which is an additional savings for your business.


Packaging makes a difference

Weight is not the only figure carriers use to calculate costs. Packages are subject to a dimensional weight calculation. What does this mean? If your package is large, you may be subject to additional charges. To avoid this, ship your items in the smallest package possible. If merchandise doesn’t require the protection of a cardboard box, consider padded or Tyvek envelopes for shipping.


Many variables are worked into shipping rates. What you pay will depend on parcel size and weight as well as the package’s destination. The best way to determine which carrier will work best for your shipping needs is to contact carrier representatives and see what they can do for you.



This article was written by Gillian Burdett for Small Business Pulse