10 Tips You can Use to Reduce Your Shipping Cost

Alfonzo Starkey
Jan 24, 2018 · 3 min read
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If you are the owner of a small business, you may find that one of your heftiest expenses is your shipping cost. Because these costs can easily dig into your profit margins, you may need to find different ways to eliminate the added cost of sending your products to local places and around the world. Having said that, here are 10 effective ways of reducing the amount that you spend.

1. Negotiate the Prices for your spending with Several Different Carriers

Before getting started with your new shipping plan, it is important that you know that shipping prices vary based on several different factors. One in factor in specific is based on the volume shipped.

2. Make Sure Your Suppliers are using your shipping account number

Most small businesses have different shipping suppliers that they use on a regular basis. Even though the suppliers are from a diversity of entities, small businesses can still take advantage of bulk shipping prices. To ensure your company gets credit for their volume shipping, you should make sure that all of them use one shipping account number. For instance, if suppliers use Fedex to ship packages, they can get the bulk discount that they need to reduce their cost if the same account number is used every time.

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3. Only use the Shipping Boxes Provided by Your Carrier

To save money, you should use the packaging provided by the carrier at all times. By using packaging with the standard dimensions, your company will not be charged extra fees for added dimensions in the company packaging.

4. Try to Use Regional Carriers

Regional carriers can help to reduce shipping cost since they can supply the same services as UPS and FedEx. The only downside to using a regional carrier is the limitations in delivery networks.

5. Utilize Online Shipping

Another key to saving more on shipping cost is to pay for the items online. By using this method of payment, you can save as much 16 percent on mail that is considered to be a priority and as much as 60 percent on the mail that is sent express.

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6. Make an Investment in Prepaid Shipping

Some carriers are offering discounted rates to the customers if they prepay their shipping in advance. For instance, when you use FEDEX and UPS for your shipping, you can take advantage of discounts that may add up to as much as 20 percent.

7. Purchase Third Party Insurance

Savings can easily add up when you know when and how to buy insurance for the packages that you ship. So, you should know how to buy the right type of insurance for your packages that you ship before sending them out. For instance, some of the top carriers like FedEx and UPS may charge .80 per every $100 to cover the cost the shipping, while third-party insurance may charge only .45 per every $100. Therefore, if you are doing a lot high volume heavy weight shipping, this is an excellent way to reduce these costs.

8. Before Billing a customer for a package — Include Shipping cost

To keep from absorbing the cost of a customer shipping, you should make sure that each item already covers the cost of shipping.

9. Consider Using Hybrid Services

Hybrid services is also a great way to save money on the shipping prices for a small business. Specifically, since the price for shipping can be cut in half. Hybrid shipping is sending the package to its destination by 2 carriers (i.e. Fedex and the post office).

10. Talk to Carriers about Association Discounts

It is not uncommon for a professional in a certain industry to patronage a specific carrier in exchange for a discount rate. To take advantage of these rates, you should know which associations have these benefits.

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