When it comes to running a successful business, packaging and shipping costs are unavoidable. Learning how to cope with this necessary expenditure is the first big step in accepting the highs and lows of a business, as well as taking responsibility for the everyday necessities every business demands.
Coping does not mean putting up with high prices. However, in this situation, coping means understanding that costs exist and then working to minimize them. There are ways to save money when it comes to shipping costs, and we have outlined some of them for you here.
1) Use the right box
Straight, simple and to the point: If you do not need to use a large box, don’t. Use the smallest packaging option possible so that when the bills come in, you are getting the best possible deal. The ideal box is one that can fit the product being shipped with enough packing material to keep it secure.
According to UPS, packages are charged on either on shipping weight or dimensional weight—whichever is greater. Don’t give your shipping company the option to charge you more by being careless with your packaging options. This also means possibly paying out of pocket for a smaller box if a recycled box from a previous shipment is too large. Remember that the small up-front payment for this swap will help save money in the long haul.
2) Choose the right shipping company
Understand your unique shipping needs when you approach the question of which shipping company to choose for your business. If your needs center around overnight or same-day shipping, it might be best to consider one of the powerhouse shipping companies like FedEx or UPS. If this is not the case, then the tried-and-true USPS might be your best option.
But don’t think your options stop there: All across the nation, there are myriad shipping companies — some of which specialize in local delivery — that may be able to offer you better prices or options depending on your needs and their business model. Again, figure out exactly what you are going to need in terms of shipping, then shop around rather than settling for the first choice you find. Shipping is a competitive market, and your money is the big talker in this situation, so make it count.
3) Pack once, ship once
The idea of properly packaging a product seems so obvious that it is incredibly easy to overlook important details. In the struggle to find affordable packaging options, you might think that the cheapest packing material is the best option, especially if you’re shipping a lot of items. Wrap your product in some plastic, throw it in the box and ship it away. Done and done.
But there’s a good chance that your item will be returned, box dented and product damaged. Even worse, a customer who receives a damaged item will lose trust in your business’s ability to provide quality products and will likely search elsewhere for their e-commerce needs. Instead of allowing this to happen, plan ahead to use proper packaging materials — such as Styrofoam peanuts, air pillows, or bubble wrap — and make sure from the start that your products will arrive at their destination intact.
4) Be proactive and aware
Once you decide which shipping business to go with, do not just hand off the contract and call matters done. Make connections within the shipping company — if you are a small business owner, definitely make sure to contact the shipping company’s small business specialist — and keep up on what they are doing, how their prices might be fluctuating, if there are better options for shipping and so on.
According to Tompkins Associates, a supply chain and distribution operations consulting firm out of Raleigh, NC, “Businesses that don’t work with their carrier to map out shipping criteria can spend as much as 40 percent more in fees than those that do.”
Shipping is a complex business that involves consistently changing methods and prices depending on the market and the product being shipped. Keep up with these changes within your chosen shipping company to help reduce costs and maintain efficiency within your own business.
Along this same train of thought, it is a good idea to keep track of your shipping company’s performance, including package pickup, delivery, customer service, customer access to shipment tracking information, tracking accuracy and meeting deadlines. If your carrier is lacking in these areas — particularly with anything having to do with customer service — the negative backlash will reflect on your business.
Customers will most likely assume your business is to blame for late packages or incorrect information and thus be less likely to continue using your business. Remember, the shipping company that you choose is working for you, and just like any employee, the occasional performance review is required to keep the flow of your business on track.
5) International shipping warehouses
If you are looking to start expanding your business overseas, you can save a lot of money on shipping costs by employing a third party to oversee a warehouse wherever you are looking to send a lot of product. While this option is definitely designed for larger-scale businesses with greater volumes of products, smaller businesses can still benefit if they can find the right warehouse liaison to work with.
The essential idea behind an international warehouse goes hand in hand with the idea that shipping in bulk or all at once is generally more cost-effective than shipping items one at a time. If your business is selling a high volume of goods in, say, India, the upfront cost of hiring the third-party warehouse company will save you time and money in the long run by cutting down on shipping labels and distance. Send your bulk items overseas to the warehouse, and from there, items can be directly sent to their final destination.
The old adage “work smarter not harder” is the goal of finding affordable and efficient packaging and shipping options for your business. Pack smart, educate yourself on the many different shipping options available to you and always keep up with where your products are going, how fast they get there and how the customer was treated. Truly, the most important lesson is to make sure you remain aware of what is going on in your business as well as the businesses you partner with so you’ll know you are always getting the best prices and the service.