Six Ways to Lower Shipping Costs for Small Businesses
Shipping rates rise each year, but big brands seem to get better shipping discounts.
That’s what we get. This guide will help reduce shipping costs so that you can offer a better customer experience, and make more profit for your business.
Learn about shipping basics
Shipping is a challenge that every online shop faces. Shipping can seem daunting. You have to pack and ship your products after a sale. Once you give it to a shipping company, it is out of your control. It is the responsibility of the shipping carrier to deliver your package in perfect condition and on time.
Your customer could be disappointed if the package arrives damaged or not at all.
Shipping fees are charges that are used to ship an item to a customer. These fees include:
- Packaging, tape and stickers
- Labor required to send an item
- Transport costs to collect and deliver the item
- Shipping internationally requires import/export fees
You, as a merchant must disclose your shipping costs on the website. Shipping is one of the most frequent questions that store owners will have.
Merchants have created a shipping policy to address this issue. It sets expectations for customers regarding shipping costs and times. Customers can also use this as a resource when they have questions or complaints about their order.
Shipping costs can influence whether or not a customer purchases your products.
The Baymard Institute ecommerce research group found that almost half of online shoppers abandon their carts due to extra shipping costs. Although you cannot change the local sales tax for your product, there are ways to reduce shipping costs in an online store.
If you are still not sure of your shipping strategy, please read Shipping Strategy: Deliver Packages to Customers Without Cutting Into Your Bottom Line.
How to lower shipping costs for small businesses
Let’s take a look at easy ways to lower shipping costs in your store now that you have a basic understanding of shipping costs.
- Packages lighter
- Select the right-sized packaging
- Flat-rate Shipping when Possible
- Shopify Shipping to reduce carrier costs
- Learn when rates change
- Local delivery and pickup
Reduce the package’s weight
Although it might only cost a few cents per box, that is still a lot of money for hundreds of packages. Lightweight packaging can help reduce shipping costs and improve profit margins.
There are several ways to reduce the weight of your package.
- Use corrugated boxes to pack your products.Corrugated boxes can be used as a form of packaging.Ecommerce packagingIt’s lighter and stronger than regular cardboard boxes. Between the outer and inner layers of the box, there are rows of air-filled grooves.
- Use lightweight packing materialThere are many packaging materials to choose from. Some are heavier than others. You can also try air pillows, bubble wrap, bubble wrap and foam inserts as lightweight options.Versa Pak wadding rolls and Excelsior. It is important to pack items tightly and reduce their weight.
- Create a custom shipping box.You will need less packaging material if your shipping container is close to the size and shape of your items. A custom container can be a cost-saving option for products that are high in volume.
You should check the Flat Rate Packaging rates provided by your carrier if you need to ship heavy items. No matter the item’s value, it offers the same rate.
You can save a few ounces on each shipment by using light-weight packaging. This can lead to significant profits and a return on your investment of time and resources.
Pick the right packaging
If you want to reduce shipping costs, there are a few things that you can do.
It is easy to get or buy packaging that is slightly larger than the actual item you are sending. If you require more protection, you can use a poly mailing envelope instead of a cardboard box.
Shipping costs depend on the dimensions and weight of your package. Cardboard is heavy so if you can reduce its weight, you will win.
If you are paying for packaging, doing some research can help you save money. Many carriers offer free packaging.
The USPS, for example, offers free packaging in various sizes if you order shipping within certain mail classes. UPS and DHL Express offer complimentary packaging.
You can save money by knowing which types and sizes you use the most.
Measure your products to determine how many you send each week. This will allow you to determine the size of packaging that will be most suitable for the orders you send. You can see your order history and choose packaging that will work with your regular orders if you are selling just one item.
Flat-rate shipping is best
Shipping container pricing and geometry are constantly changing. This is not good for your bottom line. Sometimes it can be difficult to keep up with all these changes.
- UPS rates have increased by an average 4.9%. Larger increases are available for heavy and oversized packages.
- The rates for the United States Postal Service ( USPS), have increased by 2% to 4.95% depending on your size.
- Fedex freight rates increased from $0.10 to $0.35
Online brands are turning to flat-rate shipping in an effort to reduce shipping costs due to rising rates.
Flat-rate shipping is when shipping costs are one rate regardless of weight, shape or size. Flat-rate shipping converts variable costs into fixed costs. If you have 10 items to ship within the given weight range, you can know upfront how much it will cost.
In your Shopify store, you can set shipping rates for customers.
Flat shipping rates can be set for orders within a particular shipping zone, or orders that are within a certain price range or weight. In the United States, for example, you can set a flat rate at $5 for orders under $50 and another flat rate at $3 for orders above $50. You can control what the customer pays at checkout.
Shopify Shipping can help you reduce your carrier costs
Shopify Shipping makes ordering faster and easier. Shopify allows you to purchase shipping labels, print multiple labels at once, and ship orders quickly. Shopify merchants can save up 88% on shipping costs to the U.S., and ship products all over the globe with confidence.
Shopify Shipping has helped our business grow. We don’t get bogged down in fulfilling orders. Instead, we can focus on what our business can do long-term.
Shopify Shipping offers you pre-negotiated discounts from shipping companies like:
- DHL Express
- Canada Post
The best thing? The best part? You don’t have to pay a monthly fee for shipping solutions. Shopify Shipping is already in your dashboard so that you can manage customers, products, inventory, shipping, and more all from one place.
Shopify Shipping offers discounts that make it easy to offer flat-rate or free shipping to your customers at Checkout. International customers can be reached easily using automatically generated customs forms.
This free shipping calculator will help you calculate your shipping costs.
Use our Shopify Shipping Calculator to calculate your shipping costs. This will allow you to create a strategy that increases sales while making it easy on your bottom line.
Find out when rates change
Keep up to date with pricing changes so that they don’t impact your bottom line. Shipping companies review their pricing every year and adjust rates to reflect higher fuel costs. Every January, new prices are introduced. However, they can also be implemented throughout the year.
Local delivery and pickup available
You can reduce shipping costs by not using any carrier. People are increasingly shopping locally and independently after the COVID-19 pandemic. Our consumer trends data shows that nearly a third (33%) of buyers have purchased something online and had it shipped locally during the pandemic.
Local Delivery allows customers to order products online and have them delivered to their homes. Customers could also be able to pick up their order online from your store. Local delivery and pickup can be cheaper than shipping with a carrier.
Local delivery services are also available to you
- Get connected to your local communityLocals will be more likely to shop for your brand if you make it easy for them
- Customer experience improvedSay goodbye to shipping delays, variable costs and other inconveniences
- Sales increaseThroughCart sizes up to 25%Average order value
Customers have the option of local delivery, which reduces barriers to purchase and can impact your bottom line. This gives you the opportunity to reduce shipping costs and increase customer loyalty.
How to create cost-effective shipping strategies in your ecommerce store
It’s obvious that shipping costs can quickly eat into profit margins.
These cost-effective tips will help you reduce shipping costs for your business. Shopify Shipping is the best way to save money on shipping, domestically or internationally. Also, try to offer local delivery whenever possible. This will create a better shopping experience for customers, reduce delivery costs and time frames, and increase your revenue.