10 Ways To Reduce Shipping Cost Without Compromising Quality

When running a small eCommerce business, managing shipping expenses can be a major challenge. Whether you’re in clothing, food, cosmetics, or any other industry, if you're new to the business and haven't scaled enough to streamline your supply chain, high shipping costs can be a significant hurdle.

Aside from your products, shipping costs can be a key differentiator for your business. If you can reduce these costs, you’ll be able to compete more effectively with the industry giants.

However, the real challenge is cutting costs without compromising on quality.

We’ve compiled 10 ways to help you reduce shipping costs while maintaining the quality your customers expect.

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10 Ways To Reduce Shipping Cost

• Flat Shipping Rates:

  For most eCommerce businesses, cart abandonment is a major issue. Customers often abandon their purchase the moment they see unexpectedly high shipping costs at checkout. If this is a challenge for your competitors, you can gain an edge by adopting flat rate shipping.
  Flat rate shipping allows you to charge a fixed shipping fee for packages that meet specific size and weight limits. By informing customers about shipping costs upfront, you can reduce cart abandonment rates and improve conversions.

• Optimize Shipping Routes:

  Shipping costs don’t just include packaging and storage expenses; they also cover transportation costs, which are heavily influenced by fuel prices. Fuel costs are directly proportional to the distance traveled, so if you can reduce the travel distance per delivery, there’s significant potential to lower your shipping expenses.
  • Use Route Optimization Tools: These tools help you plan deliveries seamlessly by factoring in weather conditions, traffic, and frequently traveled routes.
  • Group Shipments: Combine orders heading to the same destination to optimize delivery efficiency.
  • Locate Warehouses Strategically: Position your warehouses closer to areas where you frequently receive orders.

• Streamline Packaging Costs :

  After receiving a bunch of orders, you will be able to identify the most frequently received order sizes. Once you know the range, you can discuss with your packaging vendor to establish a standardized and optimal packaging cost for each order.
  This will help you streamline the packaging process, reduce packaging waste, and take advantage of bulk orders, ultimately lowering the cost of packaging materials.

• Offer a Local Pickup Option :

  When your customers are located in the interior parts of the city, delivering to them can result in higher shipping costs. Offering a local pickup option at a reduced delivery charge can be an effective strategy to cut these costs.
  Customers will appreciate the opportunity to pay lower delivery fees or even opt for free delivery if the pickup location is nearby. You can set up a common pickup point for multiple customers in areas where orders are less frequent, further optimizing your delivery process.

• Opt for Multiple Carriers :

  Instead of relying on a single nationwide carrier, consider using regional carriers. Nationwide carriers often charge higher prices because they serve the entire country. However, if your eCommerce business is small, there’s no need to cover every part of the nation, as this will only add unnecessary costs.
  Regional carriers charge less since their services are limited to specific areas. So, when your business is still growing, you can partner with regional carriers in locations where you receive the most orders.

• Use Prepaid Shipping Labels :

  Prepaid shipping labels are stickers with all the shipment details printed on them. Having a prepaid label saves you the time spent waiting at the weighing center to weigh each shipment.
  Additionally, these labels are often available at discounted prices when purchased in bulk. Using prepaid labels also enhances the predictability of your shipping costs, as you know the price upfront. This allows you to streamline your budget management for shipments.

• Consolidate Your Shipments :

  Combining multiple small products into one package can reduce handling costs and simplify the documentation process.
  You can also group orders based on product categories and combine them accordingly, or choose the delivery location as the basis for segregation. This approach depends on the patterns you observe in the orders you receive.

• Use Polymailers :

  If you are delivering less fragile items, consider using polymailers instead of boxes. Polymailers are self-sealing plastic bags ideal for shipping smaller packages containing non-fragile items.
  They cost less, take up less space in delivery vehicles, and are easier to handle due to their lighter weight compared to cardboard boxes. Additionally, they are waterproof and tear-resistant, providing extra durability.

• Choose E-Commerce Friendly Carriers :

  Not all carriers are e-commerce-friendly. Choosing carriers that specialize in serving e-commerce businesses can help you cut down on shipping costs, as their services are tailored and scaled to meet e-commerce needs.
  They offer personalized pricing plans, advanced tracking technology (using tools like Clickpost), consolidated shipping, and route optimization. These carriers have expert teams in place, reducing the need for your intervention and ensuring seamless logistics operations.

• Educate Your Customers :

  More than 50% of cart abandonments occur because customers encounter unexpectedly high shipping costs. Even if you offer ways to help them reduce these charges, the abandonment rate may not decrease if customers aren't informed about their options.
  To address this, you can educate them through a popup window during checkout or by presenting the information clearly and attractively on your website's UI. Additionally, your customer support team can call customers to guide them on reducing delivery charges, enhancing their overall experience.

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Wrapping Up

In eCommerce, staying competitive requires cutting costs wherever possible. With rapid advancements in the shipping industry, you can reduce shipping expenses by leveraging technology, adopting modern packaging materials, and building strong relationships with carriers.

By implementing these strategies, you can significantly lower delivery costs, streamline your shipping processes, and provide excellent service to your customers.