How to Reduce Shipping Costs: A Guide for Small Businesses
As a small business selling online, shipping can be a challenge. There are a lot of logistics to arrange, which is a headache in itself, but more importantly, shipping costs involve a lot of money. You have to think about packaging, storing your inventory and dealing with delivery fees.
E-commerce is more popular than ever, and being able to sell online is great for your business. At the same time, when you have a business with less capital stored up, shipping fees can be a pain.
And the more it costs you to ship, the more you have to charge customers to compensate, which can cost you sales.
Fortunately, you can find affordable shipping solutions for small businesses. This guide will show you how to find the cheapest shipping for small businesses in the UK, allowing you to boost your profits.
What Makes Shipping Expensive?
First things first, let's clarify what we mean by shipping fees. We've all seen the added cost of an item on Amazon, but shipping fees are more than one cost. It's a general term that includes:
Boxes, packaging, tape, scissors and anything else required to contain your items.
Courier costs for collecting and delivering items.
Labour costs of sending the item, meaning the cost of the workers' time.
Import and export fees if you're shipping internationally.
By breaking these costs down, you can identify key areas where you can reduce shipping costs and save money. Create a SumUp profile now to open your own online store. CTA: Create a SumUp Profile
How to Reduce Shipping Costs
Improve Your Packaging
One of the easiest ways for small businesses to get cheaper shipping options is to improve their packaging. Maybe you'll only shave off a few cents per package, but the more business you do, the more it adds up. Weight = Money Pay attention to the weight of your packaging. Weight is a key determinant of how much your items will cost to ship. You may not be able to do much about the weight of your items, but there are ways to accommodate any item's weight more efficiently. You can bring down the weight of your packages by:
Using corrugated boxes to pack items:
Corrugated boxes are a stronger and lighter material than standard cardboard, with rows of small air-filled grooves between the inner and outer layers of the box.
Using lightweight packing material:
You should always be packing your items tight, but that doesn't mean you need to use heavy material. Bubble wrap, air pillows and lighter packing paper are all good options.
Designing a custom shipping package:
Even if your item is awkwardly shaped, the easier it is to pack items together, and the closer they conform to the shape of the box, the less material you'll end up needing.
Optimise Packaging Size to Reduce Shipping Costs
When you're looking for packaging, it's very common to find something that's bigger than what you're actually sending. Using a large box for something small like a candle is unnecessary, and it also means you'll spend more on packing materials. By changing your materials from boxes to smaller things like padded envelopes, you can get rid of pointless fees. You should also be on the lookout for free packaging. Some carriers, like DHL, offer this, either by default or when you pay for specific classes of shipping.
Use Flat-Rate Shipping
If you frequently ship items of different sizes and weights, flat-rate shipping could be a game-changer. With flat-rate options, the cost remains the same regardless of weight, making it easier to budget. Flat-rate shipping can be an affordable shipping solution for small businesses, reducing unnecessary shipping fees. Suddenly, you have a fixed cost instead of a variable cost, which takes the guesswork out of estimating your expenses. Your customers will also appreciate the clarity of flat-rate shipping.
Lower Carrier Costs with Smart Choices
Another way to reduce shipping costs is to compare business shipping rates from different carriers. For instance, DHL business shipping rates may be lower than those of other carriers, reducing your costs. Take your time and look into all your options until you find a carrier that fits your budget. If you have customers in other countries, also check their import and export rates.
There's always competition between shipping carriers, so it may be feasible for you to negotiate a lower rate. You can also negotiate directly with suppliers to get items shipped directly to you. It makes it easier to control costs.
Implement other delivery methods that remove carriers from the equation. Consider offering either local delivery or in-store pickup.
Local delivery lets you fulfil orders yourself, which means you aren't paying carrier costs. You can define a maximum distance for local deliveries in your shipping policy so customers know what their options are. Local delivery will usually be less expensive for your customers since, as your shipping costs go down, so will your prices.
In-store pickup is another way to remove carriers from the shipping process. In fact, if your customers opt for in-store pickup, you'll have no shipping costs at all.
You won't have to send your items anywhere, which means no boxes to pack or moving trucks to hire. In-store pickup isn't necessarily restricted by location since it's up to the customer whether they want to travel to you or not.
Why alternative delivery works:
Either delivery option will benefit your business. Both methods mean:
More opportunities to connect with your customers and community.
A better experience for your customers since they won't need to deal with shipping delays or variations in order costs.
Shoppers average 25% higher cart sizes and spend more when choosing either in-store pickup or local delivery.
Save Money and Ship Smarter
Cutting down on shipping costs doesn't mean cutting corners. By optimising packaging, choosing the right shipping provider and offering alternative delivery methods, you can find affordable shipping solutions for small businesses without sacrificing quality. Start implementing these small business shipping tips today, and watch your shipping expenses drop while customer satisfaction rises.
Reducing Shipping Costs FAQs
What are the best ways to reduce shipping costs for small businesses?
Small businesses can lower shipping costs by optimising packaging size, using lightweight materials and choosing affordable shipping solutions. Comparing business shipping rates from multiple carriers, negotiating discounts and utilising flat-rate shipping can also help.
Can small businesses negotiate shipping rates with carriers?
Yes, small businesses can negotiate shipping rates with carriers, especially if they ship frequently or in bulk. Major carriers like DHL and Royal Mail offer business shipping rates, and some provide discounts for long-term partnerships.
What are the cheapest shipping carriers for small businesses in the UK?
The cheapest shipping carriers for small businesses in the UK include Royal Mail, Evri (formerly Hermes) and DPD Local for affordable domestic delivery. DHL business shipping rates are competitive for international shipping.
