10 Ways to Trim Shipping Cost

For small business owners, the cost of shipping can be one of the biggest factors in paying large operational expenses for the company. In order to offset these expenses, however, many of today’s’ entrepreneurs are being very creative in reducing the amount that they pay. 

Of course, when the research is being done, names like Fred Dubois usually comes into the picture since he was striving to reduce expenses for this shipping from the inception of his business in 2007. This is because his laptop business was costing him about 500 dollars per 50 batteries that his customers ordered. While he started his shipping services by contracting out work to FedEx Ground, as time passed, he changed his overall shipping strategy by varying who he used to ship his laptops by. For instance, he decided to use U.S. Postal Service to help with the shipping and was able to cut this shipping cost at a rate of 50%.

Today, to make sure that he has a solid plan that works for his business, he has split the shipments in half by giving part of the business to the U.S. Postal service and the other half to FedEx Ground. So, for those of you who are interested in what it takes to keep your shipping cost down, here are 10 tips that you can review. 

1. Make Sure You are Negotiating with Multiple Carriers 

If you want to make sure the cost of your shipping services is kept to a minimum, you should negotiate prices with multiple carriers. Even small businesses can take advantage of this strategy since they are more likely to compete to get your business and you can compare which ones will fit your plans best. 

2. Establish an account number 

Accounting numbers are essential to reducing the amounts that you will pay in expenses. With the accounting number, your volume can be tracked and will often lead to cheaper prices as the volume rises. 

3. Carrier Packaging a Must 

Using the carriers boxes is also critical to reducing the amount that you pay. This is because the dimensions of the carriers boxes are used to set the rate. For instance, if you place a 1 pound box in a Fedex envelope after you have used all of your shipping supplies, you can reduce the shipping cost by as much as 15%. 

4. Use Your Regional Carrier 

Even though FedEx and the United Postal Service are a great option for shipping packages, you should not forget the fact that there are other shipping carriers that supply these services too. So, scout out those options in your area (Spee Dee Delivery, On Track) 

5. Discounts Available With Online Shipping 

Another way to save money is to use online shipping services. When you pay online for your shipping, you can save up to 16 percent and more on express mail and priority mail services. 

6. Prepaid Shipping is an Investment 

To save as much as 20% on your shipping cost, you can also diversify the way you pay your shipping expenses by using prepaid shipping options. 

7. Purchase 3rd Party Insurance 

The savings associated with third party insurance is also great for many businesses today. This is because the third party insurance providers will usually reduce their rates for insurance coverage quite dramatically. Specifically, compared to the well known names like Fedex. 

8. Before Billing Customers for their Items — Factor in Shipping Fees 

To keep from absorbing the cost of extra fees charged on the items that you sell you should make sure that the customer’s price for a product includes all of their shipping fees. 

9. Hybrid Services Can Reduce Your Expenses 

If the speed of a product is not the highest priority for you and your customers, you may want to consider hybrid services. This type of service consists on one carrier pickup the package and the other carrier delivering it to its destination. 

10. Inquire About discounts from Associations 

Based on the size of the organization and the industry that they represent, there are some discounts that can be taken advantage of. So, you should ask in advance what the company has available.

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