A Small Business Guide To Reducing Ecommerce Shipping Costs
We’re all thinking it. When it comes to shipping, it should be free. At least when we’re on the customer side. But since you’re here right now, you’re not just a customer. You’re also a small to medium sized business looking for the best ways to compete with the likes of Amazon’s free, two-day shipping.
But the fact of the matter is that shipping costs can add up for your business and free shipping quickly becomes out of the question.
Carriers raise their shipping rates every year, and these rate increases affect everyone. In the recent year, demand in the ecommerce field has increased, and in turn created a shortage of shipping carrier manpower, carrier space and warehouse capacity.
Even with carrier delays, Amazon continued to deliver on-time and seemingly faster than any other carrier. As a result, shipping for small businesses has become more challenging. The bar has been set for faster, cheaper, and better shipping. But for small businesses, reaching this bar may seem impossible both logistically and financially. Especially when small businesses fulfill orders from home, a brick and mortar store or a small warehouse with limited staff and shipping resources.
So, how can you reduce ecommerce shipping costs for your small business while keeping up with the demand for faster, cheaper shipping? There are still a few tricks you can employ to combat these high shipping costs. Let’s dive into how to reduce your ecommerce shipping costs.
Weigh Your Items
First, you’ll want to make sure your items are weighed correctly. If you use an ecommerce platform like Shopify, BigCommerce or Squarespace, you most likely need to set up shipping within your platform. And you most likely need to enter in the weight of your products as part of this step.
The weight of your products is a factor that plays into the cost of shipping for your products. It may not hold as much weight (we meant to do that) as the size of your packaging -- we’ll get to this later -- but still plays an important role in what carriers charge for shipping.
If your product weights are inaccurate, shipping carriers may be charging you inaccurately. Re-weighing your items and adjusting the weights in your ecommerce platform may help you shave a few dollars off shipping costs for your customers.
Don’t have a reliable scale to weigh your products? You may be able to find an estimate online. Shopify has a comprehensive chart of common products and their weights you can use to jumpstart your process.
Measure Your Items
After weighing your items, you’ll want to make sure your packaging matches the weight and size of your product.
As you may already know, dimensional weight is the second factor that plays into your shipping costs.
Dimensional weight measures how much volume a shipping box holds. Shipping carriers rely on dimensional weight to maximize space on trucks and shipping containers. The more space your shipping box takes up on the truck, the more the cost associated with your box.
Ideally, you want your product to fit as snug inside your shipping box as possible for a few different reasons:
- Keep dimensional weight down
- Keep ecommerce shipping costs down
- Keep your product from breaking during transportation
To make sure your shipping box or container is the right size for your products, we recommend measuring your items.
Gather your products together as you would pack them in your shipping box. Include any additional items you ship with, including other products or marketing collateral. The goal is to recreate your fully packaged product outside of the shipping box.
Then, with your items assembled, measure the length, width and height of the bundle. Repeat this process for every combination of products you sell the most. You can find your most popular product bundles by looking through your order history.
After recording down your measurements, add one to two inches to the length, width and height each to account for packing materials. This new length, width and height should help you choose the correct box size for your products.
You may find that your products or items don’t require a shipping box. If you’re shipping light apparel, small pieces of jewelry or accessories in small quantities, you may be able to use bubble mailers to ship. Finding the right shipping box or shipping vessel can drastically help you reduce your ecommerce shipping costs.
Shop Around For Shipping Rates
If you’re on an ecommerce platform like Shopify, you’re most likely benefiting from negotiated shipping rates already. Big ecommerce platforms typically have teams in place to help negotiate reduced shipping costs with select carriers for all merchants on the platform.
If you’re not on an ecommerce platform with negotiated rates in place, don’t worry. There’s still a way to get reduced shipping rates, and you don’t have to negotiate with carriers yourself. Services such as Shippo, ShipWorks and Easyship are just a few examples of companies that help businesses get negotiated shipping rates with major carriers.
Shop around for the best possible discounts or reach out to your ecommerce platform’s shipping team to make sure you’re getting the best rates possible.
Rely On A Fulfillment Partner
If this is an option for your small business, outsourcing your shipping and fulfillment may end up helping you save on shipping costs.
With a third party shipping and fulfillment partner, you won’t have to worry about fulfilling orders yourself. This is especially helpful if your sales pick up drastically and you don’t have the time to shop for shipping rates, remeasure and reweigh your items.
While there are costs associated with setting up your fulfillment partner, the costs will be much lower than creating your own fulfillment center. Third party fulfillment partners also have the power to negotiate much lower shipping rates from shipping carriers since they ship in large quantities for several businesses. They can in turn pass these shipping savings on to you.
These are just a few steps you can take to reduce ecommerce shipping costs for your small business. Start reducing your shipping costs today!