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The Path to Long-Term Profitability: Ways to Reduce Your eCommerce Shipping Costs

You are currently viewing The Path to Long-Term Profitability: Ways to Reduce Your eCommerce Shipping Costs

“Free Shipping!” We live in that era where these two words run the eCommerce industry. Of course, this is one of the main attractions for most online shoppers. But for an eCommerce business, it comes at a price. Whether you offer free shipping for every purchase or on selected purchases, you need to have efficient shipping strategies to reduce shipping costs.

With Amazon raising the bar for eCommerce experiences and more online players entering the market, there’s an increase in demand for warehouses and transportation, leading to carriers increasing their shipping charges every year. Along with this, numerous other factors affect your shipping costs. So how do you find a balance between everything, reduce the shipping costs and improve your profit margin?

It’s easier said than done, but let’s take a look at a few ways you can significantly reduce your shipping costs and improve your customer experiences.

How to Reduce Shipping Costs

Optimize Your Packaging and Infill

Irrespective of the size and weight of the product you are shipping, you should be careful in selecting the size of the packaging and how you fill it. As most shipping carriers calculate the shipping costs based on the dimensional weight and location, you need to ensure that the packaging is not too big or small. You can optimize your packaging by using polythene bags instead of boxes, filling them with air pillows than other heavier materials, or utilizing the SIOC packaging. You might only be saving very little on each packaging, but you can save up quite well when looking at the bigger picture.

Know Your Shipping Location

One of the significant factors in determining the shipping charges for carriers is the location. You might either have a regional customer base or a global one, or a mix of both. If you serve the customers in a small region, you should opt for a regional carrier as they serve a smaller area and offer faster deliveries. They also have lower shipping rates than a global carrier.

Reduce the Shipping Distance

You might be wondering how you can reduce the shipping distance when you have a large customer base across various regions. The easiest way to reduce the shipping distance is to have order fulfillment centers closer to your customer. Most shipping carriers calculate their shipping charges based on shipping zones. If your shipping zone is far from your order fulfillment center, the carriers will charge higher shipping rates and slower deliveries. Partnering with a 3PL fulfillment partner with multiple warehouses across the region and globe can help you reduce your shipping distance and reach customers in no time.

Use Discounted Supplies for Your Shipping

Many shipping carriers offer discounted or free shipping supplies as part of their green initiatives. Finding cost-effective packing supplies are crucial to reducing your shipping costs. You can purchase them in bulk quantities, and even if you are left with some packing supplies, you could always use them later. You would also gain an advantage over the dimensional weight pricing when using your carrier’s discounted packaging.

Bulk Shipping

If you are an established eCommerce business or a growing one, you would have multiple customers in the same region. One of the best ways to reduce shipping costs is to group ship your packages. Most carriers offer enormous discounts for group shipping or bulk shipping to the same region.

Consolidated Shipping

If you have customers ordering more than one unit of the same product, rather than packing them in different boxes, you could pack all the units in the same box and ship them. This also works when you offer complementary products or freebies along with your products. We are all worried about the aesthetics of the packaging, and we want the customers to have an exciting unboxing experience. You could still give the customers an aesthetically packed product while consolidating the packages.

Prevent Expedited Shipping

Expedited shipping is one of the major contributing factors to your increasing shipping costs. It usually becomes the need of the hour when you have promised a faster delivery to your customer, but the packing and shipping take time and narrow down the shipping window. If your order processing is efficient and you have a fulfillment center comparatively closer to your customer, you can avoid expedited shipping charges.

Same-Day Order Processing

Same-day shipping is not always possible. But same-day order processing can be if done the right way. The products do not wait in the fulfillment center to be processed and packed. With a 3PL fulfillment partner who offers same-day processing, you could prevent delays in order fulfillment and save a lot of money on expedited shipping and other shipping charges.

Negotiate and Compare Your Shipping Rates

Sometimes, a single shipping carrier may not be able to satisfy all your shipping criteria. Before you decide on the first shipping carrier you come across, you need to familiarize their shipping policies, the charges and whether it fulfills almost all your needs. Negotiate with them and strike any special deals that will help you with your shipping.

Let an eCommerce Fulfillment Expert Handle Your Warehousing and Shipping Strategies

It’s a huge misconception that managing your warehouse will help reduce shipping charges. Imagine dealing with high volumes of shipping, managing your inventory, order procurement, packing, and much more along with the other business processes? It’s nearly a nightmare.

When you partner with a 3PL fulfillment center like ShipBots, you get access to:

  • Unlimited warehouse space
  • Multiple warehouses closer to your customers
  • Packaging and shipping support
  • Efficient inventory management
  • Access to various shipping carriers and discounts

You don’t have to stay confused about optimizing your shipping strategies and reducing the costs. Let us handle the hard tasks while focusing on running your eCommerce business seamlessly. Get in touch with us today to learn how to execute better shipping strategies for your business.