06/17/16

4 Tips to Save on Your Shipping Costs

Nobody’s interested in talking about it, but everybody’s got to deal with it. In fact, shipping is one of the most challenging aspects of operation for many business owners.

Shipping costs can make or break your business in multiple ways. Don’t plan a strategy or spend too much and you could end up unprofitable. Choose the wrong shipping partner and your customers may suffer a poor experience. Many entrepreneurs and business owners either don’t give much thought to shipping or don’t understand the confusing and complex world of shipping.

The fact is, no one shipping vendor or shipping policy fits all. Much depends on the industry you’re in, the kinds of products you sell, the weight of the items you’re shipping, and your customers’ needs.

The goals here are simple. We want to demystify several steps and opportunities in the shipping process so business owners can save money.

Flat-Rate Shipping

All the major shipping companies offer flat-rate shipping options. Flat-rate boxes provide benefits to the company and therefore are often a very good deal for consumers. All the major carriers (USPS, FedEx, and UPS) provide flat-rate boxes for free. Business owners should order a couple of boxes of each size from each company and determine which are the best fit. Doing so could reduce your shipping costs by 15 percent and save you time down the road.

Negotiating Service Rates

Assuming you are currently using on of the major companies, a few phones calls to the competitor should net you a quote, which may provide significant savings compared with your current rates. Major carriers understand that once you begin using a specific company and method of shipping, you are likely to use it for a long time, so they are happy to provide incentives to switch over. Mentioning rates offered by your current provider is great leverage for negotiating a lower rate.

Understand Shipping Insurance

business shipping costsMost people try and ignore insurance until an item is lost or damaged and they have to file a claim. That’s when researching these options from the beginning proves to be worth it. Your business is about growing revenues, and lost, stolen or damaged goods eat away at your bottom line. Most carriers provide a basic insurance package but knowing the coverages in advance will help expedite a claim if it comes down to it. There are two basic types of shipping insurance:

Declared Value: is included by most major shipping carriers at up to $50 to $100 value. With this coverage, the shipper must prove the carrier’s negligence directly resulted in the loss of damage to the shipment.

Cargo Insurance pays regardless if the loss or damage was due to the carrier’s negligence.

The Good Olé Shipping Refund

This refund is rooted deep down in the policies that most shipping companies have. Both UPS and FedEx, along with other major carriers, offer an ample amount of money-back guarantees. Often this relates to the on-time shipment guarantees provided by these carriers. Roughly 2 to 10 percent of the time, depending on the method and time of year, major carriers are unable to meet their guarantees and you are entitled to a refund.

Understanding all the variables and evolving your shipping strategy with your business is vital to its long-term health and success. Keeping your customers happy and saving money at the same time will reinforce itself once achieved. Every business will have their own unique challenges they will need to work through and overcome to develop the best and most efficient shipping strategy. So, once you think you have it figured out, don’t let it go stale.

It takes a little cash to change the world.

So what are you waiting for?

About the author

Tyler Heaps
Tyler is a member of the Lendio marketing team. He is passionate about digital marketing, small business, and helping small business owners succeed. Tyler is an outdoorsman and loves spending time with his family.

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