Shipping costs can be one the largest expenses for small businesses—resourceful entrepreneurs are finding ways to reduce the hurt. With the recent changes at UPS and FedEx it is important to understand which carrier is right for you. (See this article for more information on recent changes).
While looking for other ways to cut shipping costs we came up with these 7 tips that every business owner should consider when running a product based business. My two top recommendations are using free packaging supplied by USPS and using an online shipping service like Ship Station. Keep reading for more information.
- Use Free Packaging
If you use your own packaging, you might face higher dimensional rates if your box exceeds the size regulations set by UPS and FedEx. To avoid those extra charges, consider using the packaging provided by your carrier or consider shipping with USPS. Using USPS’s standard shipping boxes can help you mitigate your shipping supplies cost as USPS offers free packaging if you use their service. Click here for more information on ordering free boxes.
- Consider Alternative Online Shipping Companies
One way to save on USPS costs is to pay for your shipping online or to sign-up for a service through Stamps.com or my favorite Ship Station (which allows you to have a free Stamps.com account if you sign up for their service). Some customers report savings over 50% on express mail when they book it online. You also get to print out the labels on your home or office computer, saving you time at the drop off locations.
- Negotiate With Your Carriers
Shipping companies have pricing schedules based on volume—the more you ship, the lower your rate. But small businesses often don’t realize they also may have power to negotiate. If you ship large numbers of packages, compare prices and try to convenience carriers to offer lower rates. “If UPS knows FedEx is vying for your business, you’ve got some negotiating leverage,” says Sharon Wilson founder of 4th Way Fulfillment.
- Ask Your Suppliers To Use Your Shipping Account Number
Persuade suppliers to ship products on your own FedEx account number. This not only increases his business’s shipping volume, which can lead to cheaper rates, but it also helps prevent suppliers from padding their shipping costs. Not all vendors will agree, but the bump you get in volume might lead to helping you negotiate better rates.
- Enlist Prepaid Shipping
To alleviate UPS and FedEx costs, consider prepaid shipping. You could receive a discount rate of up to twenty percent. The way it works is that you buy a substantial quantity of shipping labels upfront and affix them to packages as needed rather than pay for each package when you send it out. Prepaid shipping works best when you send the same weights and box sizes—many of us have popular products that we ship the most and using prepaid labels can help reduce our costs.
- Factor In All Shipping Costs Before Billing
Shipping companies have more than one hundred special charges that can be added to the base cost of a package—some examples include fuel surcharges, signature charges, Saturday delivery—if your customers pay for shipping, make sure to include all these extra costs in their invoice so you don’t end up absorbing them yourself.
- Explore Hybrid Shipping Services.
Hybrid shipping services like SurePost by UPS and SmartPost by FedEx can cost half as much as standard UPS and FedEx delivery options. These services pick up packages at your business and ship them by UPS or FedEx to the local post office closest to your customer’s destination. The local mailman then makes the final delivery—this extra step can quell delivery time, but it can substantially reduce your cost. Read this article on the pros and cons of using these services.
Interested in letting someone else do your shipping and fulfillment? Check out 4th Way Fulfillment in Oxnard, California.