How Your eCommerce Business Can Reduce Shipping Costs

You may not realize it, but opting for multiple carrier rates can make all the difference for your eCommerce business.

The trick is to evaluate different shipping rates and services that cater to your eCommerce business. Select multiple shipping carriers, like USPS, UPS, DHL, and FedEx. Throughout the selection process, make sure to define the shipping profile, frequency of shipping destination, average volume of packages, mode of delivery, and delivery speed.

This can be done effectively and efficiently in the early stages of operation by using a service like ShipStation that lets you enter your package details and quickly evaluate several carriers’ services, speeds, and pricing all at once.

In the early stages of operation, it is important to evaluate the pricing and delivery times of several carriers to determine which is best for your specific shipment needs. Once this has been evaluated, however,

you should be aware that you can negotiate with the carrier(s) of your choice.

The pricing schedules of most shipping carriers come down to volume. With extensive and consistent shipping, you can expect lower rates. Keep this in mind as you form your shipping strategy because the more shipments you can show on your account associated with your selected carrier(s), the more bargaining power you have when it comes time to negotiate for better prices.

Speaking of volume, let’s make sure your shipments are connected to your carrier account and thus recognized by your carrier when it is time to negotiate.

Early in operations, make sure you create accounts with various carriers like UPS, FedEx, and DHL. Then strategically plan to get every shipment you can associated with those accounts. This should be done through your shipping software, like ShipStation, to ensure all your outbound shipments are recorded on your carrier account.

Also, many suppliers offer the option to ship through your business’s account number. As a result, you will have increased shipping volume via inbound shipments of inventory as well!

Remember, it is important to use perfectly sized boxes for each shipment. You can estimate the shipping rate from major carriers like UPS and FedEx.

When you ship goods to many customers, the last thing you want to do is overlook the weight of the products, which can impact shipping costs.

What’s the solution?

Attempt to find alternate, lighter products and make product design changes to reduce overall shipping weight. For example, say you’re shipping 11 oz. mugs, which are a standard item available from many suppliers. In this case, the mug available from Supplier A weighs 11.5 oz. while Supplier B offers the same style mug with a weight of 12.1 oz. This difference is critical because after packaging, mug A may still fall under 15.9 oz, allowing for economical USPS First Class shipping, whereas mug B would weigh just over 16 oz, forcing you to use USPS Priority Mail and costing an additional $3.

Everything else being equal, and even if mug A costs a bit more than mug B, your product choice could make a huge difference to your bottom line across a large volume of orders.

Next, evaluate your packaging in the same manner. Your goal is to cut down every inch of wasted volume.

Are you a low price point light bulk wholesaler? Or are you selling one-offs to the end consumer? Either way, what does your typical order look like, and how can you avoid the void?

By reducing the size of your package, you cut down on costly weight in the form of extra boxing and void fill/packaging material.

It’s high time that eCommerce businesses make the switch from traditional boxes to modern-day poly bags, which are a practical and economical choice for a wide range of non-breakable or small items.

Unlike boxes, poly bags have small dimensions and take up less space in delivery vehicles. As a bonus, once you start to use poly bags, you’ll need fewer packaging supplies, such as tape and bubble wrap. In a fast-paced eCommerce marketplace, a permanent switch to poly bags for small and non-breakable products is a win-win strategy to save money.

And finally, the use of poly bags increases efficiency by reducing the amount of labor required for packaging. Instead of having to tape up a box, add the items, add packaging material, close the box, and do a shake test, you simply place the item in the bag and seal it tight. This can save valuable minutes that add up considerably across large order volumes.

From expensive returns to unreliable deliveries to complications with international taxes and customs, the headaches of overseas shipping are enough to keep many business owners out of the international arena altogether.

However, if your shipping strategy is optimized, opening up to international orders can be a great way to improve your bottom line. One of the best ways to reduce international shipping costs is to work with a service like Ascendia, which obtains highly discounted (at times as high as 50% off) rates by consolidating shipments into large groups.

To make the most of this option, plan to ship around 15 to 20 lbs. of products to one of their distribution centers. For lower-volume sellers, this can be done by holding your international shipments for a few days to a week and then shipping all of them at once to Ascendia, which will forward them to their international destination.

When it comes to shipping to distant and remote locations, most brands pay a high shipping cost. Carriers use from 1 to 8 shipping zones for U.S. shipments based on geographical areas. Technically, zones measure the total distance of a traveled shipment from the origin point.

In layman’s terms, the farther the destination, the higher the zone level. The higher the zone level, the slower and more expensive the shipment. If you’re able to strategically choose fulfillment centers, be sure to keep shipping zones in mind.

Of course, inventory held at fulfillment centers creates a physical nexus in most states, so you will need to consider the costs of tax registration and filing in a new state against the savings on shorter-distance shipments.

Every carrier provides selective discounts based on volume and product type. For instance, the USPS offers a wide range of shipping discounts on books and electronic items. Check to see if your products qualify for discount rates from any carriers.

If you deliver a lot of products to customers’ homes, you may have to adopt a hybrid approach to lower shipping costs. You can look into a USPS and FedEx collaboration to get considerable discounts on your shipping costs.

In recent years, the hybrid strategy has worked wonders for many small and medium eCommerce businesses.

Sure, it may be a lot of fun to pop bubble wrap, but most consumers are generally less concerned with what their item is packaged in than that it arrives quickly and safely.

In fact, there are several eco-friendly and affordable options for packaging. For instance, brown paper fills are malleable and inexpensive. Conversely, void fill is crucial for fragile items. (Yes, this type of packaging is heavier and increases shipping rates, but it’s a bargain compared to what a broken item will cost you.)

In some cases, major shipping carriers like UPS, USPS, and FedEx offer boxes and envelopes to small eCommerce businesses at a discounted rate or even free to be used with specific shipping services.

If you’re shipping something very dense and heavy, like dumb bells or workout plates, you may find the free, flat-rate priority mail boxes offered by USPS to be a much cheaper alternative to buying your own boxes!

Most carriers like UPS, FedEx, and USPS are highly reliable, with signature and delivery confirmations assuring safe delivery on the vast majority of shipments. This should be considered because lower-value shipments likely do not require insurance at all.

However, for high-value shipments, in large volumes, consider using third-party insurers. These companies can reduce insurance rates by up to half the cost of major shipping carriers.

If your shipping orders are consistent in dimensions and weight, you can usually get prepaid discounts from your carriers. With FedEx and UPS, you can get discounts of 20% or more by using prepaid shipping. You just need to buy shipping labels from your carrier upfront.

Unfortunately, most carrier-related inconsistencies and errors tend to go unnoticed. Many eCommerce businesses lose a significant amount of money by overpaying. Keep an eye out for billing discrepancies and carrier errors. If you spot errors, ask for money-back services from DHL, UPS, and FedEx.