eCommerce Tips

Three Ways to Save on Shipping Costs

By Zoey Partner on March, 21 2019

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If you ship with FedEx or UPS, chances are you know about the rate increases both carriers impose each year—2019 included. With upwards of 10% of revenue going toward shipping expenses, e-commerce and B2B merchants are constantly looking for ways to offset this ever growing shipping cost, which is no small feat.

With the new rates now in effect, merchants are again faced with the decision of absorbing the extra expense to finding other ways to minimize the negative impact on their business. How can you offset the increase?

Know Which Triggers Can Provide Additional Savings

While shipping expenses can add up quickly, but there are ways to find additional discounts without radically changing your shipping operation. For example, using a certified shipping system can enable you to determine the right criteria before creating your shipping labels. Most carriers offer added incentives, in the range of 2-10% for using these automated systems. Using a certified shipping system will help you to avoid unnecessary errors that can result in higher shipping costs.

Shipment consolidation can also help. Shipments weighing between 150 and 20,000 pounds, typically referred to as less-than-truckload (LTL) shipments, may be a great fit (pun intended) for freight consolidation. Instead of paying higher LTL fees, freight consolidation companies combine your shipment with other merchants to create a full truckload, saving you money in the long run.

In some cases, you may be able to get additional incentives by shipping a weekly minimum volume. Check with your carrier rep to get your most updated terms.

Take Advantage of Volume-Based Discounts

An advantage of knowing your anticipated inventory is that you likely know your packaging needs. This allows an opportunity to buy your supplies in bulk; doing so typically reduces the cost per unit. Look for vendor who offer bulk discounts for bulk orders and ensure you have the space needed to store the supplies.

Small businesses in particular can also benefit by enrolling in a group savings program. There are several types to consider—general shipping, freight/LTL, and imports, to name a few—that enable you to leverage group buying power and access lower-than-usual rates for your shipping needs.

Understand Your Shipping Metrics

Every year, more than $2B in shipping refunds are left unclaimed. (Let that sink in.) That’s because, regardless of size, most businesses don’t know that if your shipment is late—even by one minute—you’re entitled to a full refund of the cost of the shipment. Late deliveries happen every day, but most companies don’t have the time (or the resources) to determine whether each individual shipment arrived an hour behind schedule.

Shipping auditing companies like 71lbs automatically check for late shipments, process claims and work on your behalf to get your due refunds. (Here’s how it works.) The right solution should include an easy-to-use analytics dashboard that provides a clear view into how your shipping activity. Combined with a team of shipping advocates, you can use insights to identify even small changes that can optimize your overall shipping spend.

Find a auditing solution that doesn’t require a lengthy process to get started or an upfront cost. The idea is to save both your money and your time, not the reverse. Rate increases can be tough on your bottom line, but these tips and more can help mitigate the negative impact they have on your business. You have a head start to plan ahead for this season, so your smart shipping choices today can help your shipping costs tomorrow and beyond.

Jose Li serves as the founder and CEO of 71lbs, a company dedicated to helping businesses optimize their shipping spend. Solutions include late delivery refunds, invoice auditing and lost and damaged claims to manage supply-chain expenses, as well as shipping insurance and contract negotiations.

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