Business Tips, Delivery Service

Saving Money on Shipping Costs!

Screen Shot 2015-12-01 at 1.11.44 PMShipping merchandise can be one of the most complicated operations for any business. Poor or no planning can result in owners overpaying, as well as losing sales if the company can’t provide consistent and cost-effective delivery to customers.

For businesses that don’t often send larger shipments of several pallets at a time or can’t afford to hire a logistics provider to manage its shipping services, developing a set of guidelines can be essential.

Have a minimum purchase value for free shipping

Offer free shipping with a minimum purchase order value. Avoid offering free shipping with a minimum number of purchased items because in that case, the customer may buy low-priced items just to qualify for free shipping. That does not quite bring you a lot of money.  According to the surveying firm Comscore, 75% of online shoppers in Canada tend to buy additional stuff, even if unnecessary, to attain the stipulated minimum purchase limit and qualify for free shipping.

Negotiate with carriers for better rates

That is common sense, isn’t it? Lower shipping rates will mean higher profitability. You might be a great negotiator, but from the carriers’ perspective, they need good incentives to offer you lower rates — incentives that make sound business sense to them. Commit to give higher shipping volumes to carriers and they might be happy to give you lower rates. And it would not be a bad idea to include inbound shipping to the assignment list of the carriers.

Use reward points from business debit and credit cards

Ecommerce retailers usually make payments for bulk product purchases with their business debit and credit cards. Over time, the ecommerce retailer earns huge reward points for the purchases made, usually in the form of Visa or MasterCard gift cards. You can easily utilize these gift cards to pay for shipping charges, provided your carrier accepts the cards. In most cases, most carriers do.

Adjust product price based on product cube value

Carriers’ shipping rates usually depend on the space your product is occupying on the shipping vehicle, other than on the product weight. So, you may be losing some money on shipping large but lightweight items. Items such as a large box of pillows may be lightweight but occupy a lot of space on the shipping vehicle. So, you should smartly price especially the potentially large but lightweight items so that you do not lose money on shipping.

Know where you’re shipping

If you primarily ship to one specific region, a regional carrier like United Delivery Services, may be your best bet. Regional carriers often provide lower rates than national shipping carrieres because they cover a small geographic area. United Delivery Service began in the Chicago Metro area more than 40 years ago. They quickly recognized that many of thier  clients needed service outside the area for their Residential and B2B solutions. They added On Demand, Route Distribution, and customized routing services to expand their reach across the Midwest. As a Midwest Regional Carrier, UDS provides customers with cost savings, flexibility and personalized service that national carriers can’t match.

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