Let’s say you’re a small business who moves some product online. Business is great, and your product is flying out the door. Your customers are pleased with your product because it does exactly what it’s supposed to. Things are going pretty well! But then you get a bill from your shipping carrier and are shocked to see how far into your profit it cuts. This can be a backbreaker for your small business.
So what can you do?
Well, you can optimize your shipping process for starters. Shipping can account for a large portion of your overall costs, yet is one of the more overlooked expenses associated with a small business. It is a crucial piece of the pie, and one that will take careful time and consideration.
But you don’t need to go on a Google frenzy to learn all of the subtle nuances of the shipping world. No need at all! Because we’ve done the leg work for you.
In this guide, we will break down everything you need to know to trim down your shipping costs and bring back some of that profit you worked so hard to earn. For a small business, this can make all the difference in the world. Let’s dig right in!
9 ways to reduce shipping costs for small businesses
There are endless strategies you can try to implement to help save on your bottom line, but here, we are specifically going to focus on your shipping for small business costs. Shipping is a vital component of getting the product to your customers in a timely fashion, and you might be paying too much. Since you need to strike the perfect balance between savings for you and reliability and speed for your customers, here are a few things you can do.
1. Use technology to your advantage
The shipping industry continues to evolve along with technology, with advancements making the process easier and more convenient. You can now easily track your inbound and outbound shipments to forecast daily workloads, as well as letting your sales team know when new items will be in stock, gaining you more control over your inventory.
You can even send email and text alerts to your customers to let them know the status of their shipment. This gives you and your customers up-to-the-minute updates on the progress of their order, helping you to provide a superior customer experience as well.
2. Consider LTL shipping
LTL shipping (less-than truckload shipping) is a great shipping solution for small and medium-sized businesses. When you ship with Flock Freight, they use a hubless model when volume allows so that your shipment never gets unloaded from the truck until it reaches the final destination. With Flock Freight, you receive TL service at LTL prices.
3. Batch process your orders
You can save both time and money by batch processing as much as you possibly can. There are often discounts involved in sending packages out in bulk rather than a whole bunch individually. And think of the time you’ll save by not making so many separate trips.
You can also expedite your packaging process to make everything run more smoothly. You can buy stationery in bulk, create your own stamp and shipping labels, and keep making small changes to save a bit of time here and there, and ultimately, some money.
4. Have suppliers use your shipping account number
If you use outside suppliers, you can have them use your shipping account number when they send you your products. This has the twofold benefit of increasing your business’s shipping volume, while also deterring your suppliers from padding their shipping costs. You can even make this a requirement in your shipping order. Increasing your shipping volume can also lead to overall cheaper rates.
5. Use packaging & equipment provided by your carrier
Your products may be subject to additional “dimensional fees” if you have oddly-shaped packaging or if it exceeds size regulations set by your carrier. You can avoid these extra charges by using the packaging your carrier provides. This packaging won’t have any dimensional fees, which can help to cut down on your costs.
Major carriers will also often provide software and equipment for your small business to use, such as computers, printers, and scales. Sometimes, you can even get this equipment at no additional charge, depending what you are able to negotiate (see above).
6. Factor in all of your shipping fees before you bill your customers
Shipping carriers come with a wide array of special charges, including weekend delivery, fuel surcharges, and even a fee when a signature is required from the recipient. A good way to save on your end is to add these fees into your customer’s shipping costs, rather than absorbing them yourself. However, if you’ve offered free shipping, you may be on the hook for some of these fees. Do the math to make sure you aren’t putting yourself in a hole by making such promises.
7. Consolidate your accounts
Shipping rates are typically based on volume, which means it can greatly benefit you to ship as much product on your account as you possibly can. This also includes any incoming shipments of supplies or raw materials that you may have. If possible, you can even ask your vendors to ship product on your account. This has the added benefit of eliminating any markup that you might be paying on that shipping cost.
8. Reuse & Recycle Materials
If you can help it, you can even reuse some of your packaging. Things like boxes and bubble wrap can often be reused many times over. Any time something can’t be reused, recycle it to help your business become more eco-friendly.
These strategies and more are great ways for your small business to reduce shipping costs. When you are able to take everything into consideration and understand everything that goes into your shipping costs, you will surely be able to find ways to cut down on your expenses, which means more profits for your business!