Blog

How to reduce shipping costs

I have a small online e-commerce shop – how can I reduce my shipping costs?

shipping costs

There is no quick and simple answer on how to reduce your shipping costs, but by following these tips, you might be able to decrease your shipping costs, and thus, increase your sales. As an e-commerce seller, you have to know that buyers are easily put-off by high shipping costs. Personally speaking, every single time when I shop online, I always search for sellers that offer the cheapest (or free) shipping.

It’s a bit difficult to offer free shipping, especially on cheap items, since this will cut into your profits. But here’s a trick, if you sell an item for £20 and shipping costs £3, just put the price of the product as £23 and offer FREE shipping, customers are attracted by this. By following this rule of the thumb and highlighting the fact that you offer FREE shipping, you may attract more customers.

However, this won’t always work, and sometimes you will have to find ways to decrease shipping costs. Here are some of your recommendations on how to reduce shipping costs for your customers:

-Try to offer a really clear flat rate for shipping, like £5 domestic shipping. This will help your customers know what to expect when they hit checkout.

-As previously mentioned, try to include (part of) the shipping cost into the product price. So, instead of £50+ £5 shipping, have the price as £55+ FREE shipping, or £52+ £3 shipping. The idea here is to lower the shipping cost as much as possible, as a high shipping cost can make you lose some sales.

Other ways of reducing shipping costs?

shipping cost

If you want to trim down on costs to help make your shipping more affordable for you and your customers, there’s one big thing that’s within your control – packaging.

It’s really easy to buy and use packaging that is a lot bigger than the product you’re selling. While this can be bad for the safety of the product during transportation, it is also bad for business. Why spend extra on a larger box, when a smaller, cheaper box would have achieved the same result? Often, sellers run out of small or medium-sized boxes, so they just use whatever they have, such as large boxes. That’s bad business. As such, always make sure you have all sizes of boxes in stock, readily available.

Also, if you’re currently paying for your packaging, you should know that some courier services offer packaging or free, especially for customers that send out hundreds of orders per day.

Whether you’re getting your packaging for free, or ordering custom packaging to level up your unboxing experience, knowing what types and sizes of packages you use most often can also save you money.

Start by measuring your products, and figure out how many you typically send at one time. That will help you figure out what sizes will fit for the orders that you ship most often. So if you’re selling one item at a time, versus several, just look at your order history to figure it out and order packaging that would fit with your normal orders.

If you sell small, non-fragile products like clothing, shipping orders in a mailer envelope or poly bag can be far more cost-effective than boxes. The dimensions are smaller, taking up less room on a delivery truck. Also, using them requires less packing supplies like tape and bubble wrap to save even more money. These are small gains, but when you send out hundreds of packages per day, it will add up.

If you insist on using branded boxes, make sure they don’t have dimensions that fall outside of standard box sizes major carriers use, or you may face additional fees.

If your product packaging can be manufactured so it’s ship-ready, you can save on shipping costs by simply slapping a label on it.

Negotiate!

All shipping companies have pricing schedules based on volume: The more you ship, the lower your rate. But small businesses often don’t realize they also may have negotiating power. If you ship large numbers of packages, compare prices and try to persuade carriers to offer lower rates.

As such, try to get the shipping company that you currently work with to give you a better offer based on the volume of parcels that you’re sending. There is no harm in trying to negotiate with them.

Also, see if the e-commerce platform your store is powered by or the marketplace you sell on offer any bulk discount shipping services or programs. You might be surprised to find out that you can get better rates this way.

Conclusion

Shipping is one of those unglamorous-but-crucial things that every e-commerce company has to deal with. No matter what size you are, you want to do it well for yourself and for your customers. As such, try to follow the above instructions to save a quid whenever you can, but don’t overdo it! Don’t reduce your costs and the package quality so much that it affects your business.

The key is to find a balance between cost and quality.