6 Ways to Reduce Shipping Costs for Small Businesses

For small businesses, especially in the e-commerce field, shipping costs may be a sizable expense. Whether it’s local or international order fulfillment, we believe that reducing the costs of shipping can greatly increase your overall bottom line. In this article, we will share some tips for shipping for small business owners that can help you decrease costs while still providing great service and product quality.

1. Understand Your Shipping Needs

How can small businesses reduce shipping costs? Before looking for ways to reduce costs, it is important to first know your shipping needs. This includes how orders are coming in, what the size and weight of packages you typically send are, and where the packages go. To effectively determine how to maximize savings, you must understand these parameters in order to customize shipping strategy and find the cheapest solution.

2. Compare Various Shipping Carriers' Shipping Costs

When exploring options to minimize small business shipping costs, the most effective method is to compare the quotes of different carriers. Each of the major carriers (FedEx, USPS, and UPS) has a unique pricing schedule, and their quotes will vary depending on the weight, dimensions, and distance of the packages you are sending.

For example, USPS may be the most cost-effective option for the smallest, lightest packages, while FedEx or UPS may offer better rates for larger packages or heavier-weight shipments. Make sure to utilize the comparison tools to give you the best opportunity to find the best rates for all your shipments.

You can also research discounts and shipping programs that many carriers offer to appeal to the small business clientele. If you are uncertain about how to calculate shipping costs for a USPS small business, it appears from the USPS website that you can simply calculate the shipping total using their online shipping calculator for an accurate estimate for each order.

How to Calculate USPS Shipping Costs?

Shipping costs with USPS can vary based on certain factors, including the weight, dimensions, and destination of the package. You are able to use their USPS Price Calculator to determine the price you will be looking at based on those factors. One factor you should always remember when determining shipping costs is that USPS has the flat-rate option, and this option can save you money on heavier items as well!

3. Optimize Your Packaging

Packaging properly will allow you to spend less on shipping. When it comes to packaging, don't use a big box, or you will be charged over-dimensional rates, based on dimensional weight. Instead, use light and sized-appropriate packaging, so it is fitted closely around the product and allows for little or no space.

For example, bubble mailers and poly mailers are perfect for lightweight, smaller products. Using light accessories under a small amount of bubble wrap protects your items but does not raise your shipping costs. At Jiaropack, you can buy poly mailers or bubble mailers in bulk with assorted sizes.

When you package correctly, you are able to avoid excess shipping weight as well. Not only does this improve your cost-effective strategy, it also reduces your products' chances of being damaged in transit and improves your customers' satisfaction.

4. Negotiate Rates with Carriers

If you have a practice of shipping products, you could be eligible to negotiate discounted shipping rates with carriers. Many carriers are open to providing small businesses with discounts if they can ship a certain volume or if they enter a long-term contract.

If you do discuss the options with the carrier, you should emphasize the value of shipping volume consistency and request shipping rates/pricing structure that meets your shipping needs. You can also ask about volume shipping discounts, seasonal discounts, or even special offers that help lower your shipping rate even more.

5. Consider Third-Party Logistics (3PL)

Another option to lower your shipping costs is by outsourcing your shipping through a third-party logistics provider (3PL). A 3PL manages the entire logistics process, including final packaging, warehousing, and shipping for your products.

3PLs usually have rates and discounts for shipping, given their shipping volume. Using a 3PL may also help simplify the product shipping process, as well. Whether you are looking for a local 3PL option or an international partner, the 3PL logistics service sector can be a viable and economical solution for small business shipping.

What is the Average Shipping Cost for a Small Business?

There is likely no singular average shipping cost for small businesses, as it largely depends on the size, weight, and shipping methods for the products being shipped, as well as where the products are going. On average, small businesses can expect to pay around $5 on the low end to $10 on the high end when it comes to domestic shipping costs per package.

But if you are looking at international shipping costs or utilizing expedited shipping services, those costs can exponentially increase. With that being said, it's crucial to track your costs associated with shipping and to also evaluate things like volumetric rate vs dimensional rate; as well as track your shipping costs, keep those costs down, look at optimizing packaging, and even consider the potential to negotiate rates.

6. Track and Analyze Shipping Costs

If you want to consistently drive down average shipping costs for small businesses, it's vital for you to track and analyze shipping costs. The best way to keep track of shipping costs is to utilize shipping platforms or shipping software that allows you to see how much each order actually costs you. This means that you'll be able to view your shipping costs and establish trends, along with determining which carriers are the best, and you'll also be able to see if you need to change packaging or if a shipping carrier isn't worth the higher price.

If you're looking for the right packaging solutions to potentially reduce shipping costs, check out bubble mailers, poly mailers, or any other products from Jiaropack to see if this will work for you!

FAQs

How can I reduce shipping costs without compromising customer satisfaction?

Look at your packaging and concentrate on trying different carriers to minimize costs. You also might take advantage of a reputable 3PL (third-party logistics) to tap into their discounted rates and still get your customers their orders in a timely manner. 

Can I negotiate shipping rates with carriers?

Most likely yes, many carriers offer discounted rates to businesses that routinely ship products. Don't be shy and ask for volume discounts and negotiate for your rates, especially if you ship high volumes.

Is it worth using a 3PL for shipping?

If your business is growing or you need help with logistics, yes, using a 3PL could be very beneficial. They have negotiated shipping discounts and can help speed up your fulfilment process, thus saving you time and money.

What is FedEx small business shipping costs?

The cost for FedEx to ship will change based on weight, size of your package, and the service level you choose. FedEx has lots of options, including ground and expedited service. FedEx even has programs for small business discounts, so compare service levels to maximize your shipping discounts.

Conclusion

For small businesses, reducing shipping costs is a critical part of ensuring profitability and growth. Through carrier comparisons, right-sizing packaging, rate negotiations, and looking into 3PL services, you can eliminate excess costs and add efficiency. Get started on making your shipping more cost-effective today!