Posted on March 26, 2019 by Matt Morelli
Shipping can be expensive. And in the hyper-competitive e-tail environment, customers demand the best and fastest shipping solution for the least amount of money - or no money at all. The cost of shipping can quickly become a major expense for an ecommerce company. Left unchecked, it can whittle away at profits before you know it.
Here are 5 tips to help reduce your ecommerce shipping expenses.
Shipping platforms are kind of a big deal right now. Companies like ShipStation, DesktopShipper, and Endicia offer simple to use solutions that allow you to print labels with discounted shipping rates across multiple carriers, including all major US carriers. Not only will you save money, but you will also save time and energy.
USPS, DHL, FedEx, and UPS are the household names of the shipping industry. But did you know that there are several smaller regional carriers who are just as reliable, and may offer even lower rates? Take some time to study up on carriers like OnTrac, LSO, Spee-Dee Delivery, PITT OHIO, LaserShip, Courier Express, GSO, and Dicom. In addition to perhaps offering lower rates, they sometimes offer faster shipping options as well.
Surprise, surprise! 3rd party shipping insurance can be far less expensive than carrier shipping insurance, and can provide you with a much simpler, less headache-inducing claims experience. Hypothetically, insuring a package worth $100 may cost $2.80 through the USPS, and $.65 though U-PIC Shipping Insurance. Whether you eat the cost of shipping insurance, or pass it along to your customers inside of shipping and handling fees, reducing shipping insurance costs is a benefit to both parties.
Shipping carriers use dimensional weight to begin pricing out a delivery. Per WikiPedia, “Dimensional weight, also known as volumetric weight, is a pricing technique for commercial freight transport (including courier and postal services), which uses an estimated weight that is calculated from the length, width and height of a package.” If you are shipping a pair of shoes to a customer, the outer packaging should not be much larger in volume than the box that the shoes come in.
In a bid to help shippers combat shipping expenses, and retain market share, some carriers offer free packaging if you utilize their services. Furthermore, by sticking with the carrier’s packaging, you can avoid increased dimensional fee assessments that one may find when shipping boxes that are outside of a particular carrier’s size regulations. Purchasing boxes can be quite an expense, so this may go a long way for many ecommerce companies.
Shipping costs and methods really are an often overlooked black hole in ecommerce companies. Like car insurance, or your mobile phone plan...it pays to do a deep dive every six months or so, to see if there are ways to cut your expenses. But how many people really take the time to do that? Set aside a couple of hours every other quarter to research the latest and greatest that the shipping world has to offer, and it’s highly likely that you will find ways to save money and increase profits for your company.