When it comes to shipping, how can a small business compete with major players like Amazon?
Our shipping costs rise every year, while the big names appear to receive preferential treatment from carriers.
Each and every e-commerce business must deal with the not-so-glamorous but essential task of shipping. You want to do a good job, both for your own sake and for the sake of your customers, no matter how big or small your business is.
Okay, we get it. This manual will assist you in saving money on shipping so that you can better serve your customers and increase your profits.
Learn the fundamentals of shipping
Shipping presents a unique difficulty for every e-commerce business. Making, packing, and shipping your products after a sale has been made can be daunting. But once you’ve handed it off to the shipping company, you have no control over it anymore. The carrier is responsible for ensuring that your package arrives on time and undamaged.
A bad impression could be made on the customer if the package arrives broken or never arrives at all.
A customer is charged shipping costs when an item is shipped to them. Here are some of them:
- Cases, tape, labels, and stickers
- Costs incurred by sending something
- Price of shipping an item via courier
- International shipping costs that include import and export duties
- For online sales, it is your responsibility to calculate and list shipping costs for your customers. As a store owner, shipping questions will likely rank among the most frequent you field.
To counter this, businesses should have a shipping policy in place that informs customers of what they can expect in terms of shipping costs and times. It’s also useful when clients have issues or inquiries about their purchases.
How much it costs to ship your goods to a customer is a major factor in determining whether or not they will make a purchase.
Almost half of all online shoppers, according to the Baymard Institute, end up not completing their purchases due to unexpected costs (such as shipping and taxes). Although you have no control over local sales tax, there are ways to lower shipping costs in your e-commerce store.
Tips on how a small company can save money on shipping
After a brief review of shipping costs, we can move on to simple strategies for cutting those costs in your own store.
- Lighten the load of shipping
- Pick containers that are appropriately sized
- Take advantage of flat-rate shipping options whenever possible.
- Reduce your shipping expenses by using Shopify’s shipping features.
- Keep up with fluctuating costs Provide on-demand regional shipping or pick-up
- Lighten the load of shipping
- Weight is crucially important when shipping packages to customers. The shipping cost will increase in proportion to the package’s actual weight or dimensional weight.
While this may only add up to a few cents per package, multiply that by hundreds and you’ll see the true cost. This is why it’s beneficial to use lightweight packaging; it lowers shipping costs and boosts profits.
Among the many techniques for lightening shipping containers are:
Use corrugated cardboard boxes when shipping goods. If you’re looking for a more sturdy and lightweight option for shipping items for online purchases, consider purchasing corrugated boxes. Between the inner and outer layers of the box are a series of tiny grooves filled with air.
Pack your belongings with lightweight material. Different kinds of packaging material have different weights. Air pillows, packing paper, bubble wrap, foam inserts, Versa Pak wadding rolls, and excelsior are some lightweight options to consider. The point is to minimize space used and weight of the load.
Make up a custom shipping crate. You can save money on packing materials by using fewer of them if the shape and size of your shipping container are similar to those of your items. Investing in a custom container can be costly, but the added value could quickly outweigh the additional shipping costs if you have a product that sells in large quantities.
If you need to ship something very heavy, you may want to see what the rates would be like if you used the Flat Rate packaging offered by your shipping company. No matter how much money you spend on a package, the price stays the same.
When shipping, you can save some weight by using lightweight packing techniques. Long-term, this strategy has the potential to increase your profit margins significantly and provide a solid return on your investment of time and energy.
Pick containers that are appropriately sized
One way to reduce shipping costs is to use different packaging.
Shipping materials can be purchased or obtained that are slightly larger than the contents. Poly mailers and padded envelopes are two alternatives to using a box when sending packages.
You’ll have to pay more for shipping if your package is significantly larger or heavier than average. Lightening the load wherever possible is a strategic advantage when working with cardboard.
If you are the one footing the bill for the packaging, then doing some investigation could help you save money. These days, it’s common for shippers to provide free boxes.
When you ship using certain USPS mail classes, for instance, you can get free packaging in a variety of sizes. Free packaging is also provided by UPS and DHL Express.
Discovering the most common package sizes and styles can help you save money whether you receive your packaging for free or order it in bulk from a supplier.
You should begin by counting how many of your products you usually ship and measuring them. It will show you how often certain orders are placed and what size packages are optimal for sending them. Looking at past orders can help you determine if you’re selling one or more items at once, so you can order packaging that is consistent with your typical orders.
Take advantage of flat-rate shipping options whenever possible.
The shape and cost of shipping containers is volatile and unlikely to improve your bottom line. Keeping up with the rapid pace of change may be challenging.
Just for the year of 2022:
UPS raised their prices by an average of 4.9%, with even higher increases for oversized and heavy packages.
A size-dependent increase in USPS rates from 2% to 4.95% or more has been implemented.
FedEx has raised the price of freight shipping from $0.10 to $0.35.
Flat-rate shipping is being considered by many online retailers as a way to combat recent rate increases.
Shipping costs are a flat rate no matter the size, shape, or weight of the package. The most noticeable advantage of flat-rate shipping is the reduction of overall costs due to the elimination of pricing fluctuations. You can calculate the total cost to ship ten items within the allowed weight range in advance.
Shopify’s checkout system allows you to configure shipping rates for customers.
For all orders placed within a given shipping zone or within a given price or weight range, you can establish flat shipping rates. One could set a flat rate of $5 for shipments within the United States and another flat rate of $3 for shipments to the same zone on orders totaling more than $50. You can decide how much a customer will be charged.
Reduce your shipping expenses by using Shopify’s shipping features.
To simplify and speed up the process of shipping, Shopify was created. Shopify makes it easy to purchase and print multiple shipping labels at once, so you can get orders out the door quickly. U.S. businesses can reduce their international shipping costs by as much as 88%.
Our company expanded thanks to Shopify Shipping. Now that our order volume has decreased, we can devote more time to planning for the future of our company.
The Shopify Shipping app, developed by Uchenna Ngwudo of Cee Cee’s Closet in New York City, provides you with special rates from shipping partners like:
Delivery Service Sendle USPS FedEx UPS DHL Express
What’s even better? There is no need to commit to an expensive shipping service that charges you every month. You can manage your products, customers, inventory, and shipments with Shopify Shipping, which is already a part of your dashboard.
Benefit from Shopify Shipping’s volume discounts to simplify your shipping strategy and provide customers with free or flat-rate shipping options at Checkout. Shipping discounts and customs forms are generated automatically, making it simple to reach out to customers around the world.
Allow for nearby shipping and pickup
Not using a carrier is one way to save money on shipping. As a result of the COVID-19 pandemic, there has been a recent shift toward patronizing small, locally owned businesses. Nearly a third of shoppers report making an online purchase with in-country delivery sometime during the pandemic, per our analysis of consumer trends.
If you run an online store, you can expand your market by offering local delivery so that customers can have their purchases sent directly to their homes. Customers can choose to have their online purchases held for in-store pickup. You can save money on shipping costs by forgoing the services of a third-party logistics provider and instead opting for local delivery or pickup.
Providing delivery services in the immediate area also benefits you in the following ways:
Maintain local ties by making purchasing your product or service more accessible to locals.
Reduce shipping times and costs for a better customer experience.
Boost revenue by rounding out purchases and increasing average order value by 25%
Providing customers with the option of local delivery can increase conversion rates and boost sales, ultimately improving your bottom line. It’s a great way to save money on shipping while simultaneously gaining loyal customers.