You might have heard about the increased international shipping rates as of July 1, 2020. After the United States floated the possibility of withdrawing from the Universal Postal Union, all parties reached a compromise that would allow the U.S. to set its own postage rates.
Put into plain English: a lot of people are trying to reduce their international shipping right now. Shipping costs are always a big part of business expenses in eCommerce, and this is even more true now. Inexpensive international ePacket services have been scaled back dramatically.
You won’t see retail rates increase if you go to the post office. However, postage consolidators like Asendia, DHL eCommerce, Easy Post, Pitney Bowes, Stamps.com, and more recently received new contracts from the USPS requiring them to charge much higher rates.
No, it’s not great news for shippers, particularly not at this moment. The coronavirus pandemic is still ongoing and this is causing delays and restrictions in shipping due to travel cancellations.
Even with these formidable market forces in play, there are still ways you can save money on shipping and keep your business profitable. We will now share our favorite tips with you.
1. Negotiate shipping rates with carriers.
Even though common postal consolidators have to charge more now, it’s still in your best interest to work with one. If your business isn’t large enough to negotiate directly with giants like the USPS, UPS, FedEx, and DHL, don’t worry – fulfillment companies like Fulfillrite will do that on your behalf. Negotiated rates are often far cheaper than retail postage rates, and the savings add up quickly, especially for international shipping.
2. Use your shipping account number.
We’ll borrow a tip from Enterpreneur.com about a man named Fred DuBois, a laptop battery shipper with a lot of business:
While he originally had suppliers shipping products to him and invoicing for the transport costs, he managed to persuade his domestic suppliers to ship products on his company’s FedEx account number. This not only increases his business’s shipping volume, which can lead to cheaper rates, but it also helps prevent suppliers from padding their shipping costs.
3. Optimize your item dimensions and weight for cheaper packaging.
When you are manufacturing your item, it helps to begin with the end in mind. If you know that you will be shipping your product in the mail, look at the difference in cost for different box/bag sizes and weights. If you can find a way to make your item fit into a smaller box or to weigh less, you can save a ton of money on postage in the long run.
4. Use flat-rate packaging.
We’ve talked a lot about flat-rate shipping before, and for good reason! Postal carriers such as the USPS charge at least partly on how much space your package takes up in their truck. Flat rate packages give them the opportunity to more neatly pack their trucks, which saves them money and allows them to pass on the savings to you.
Flat-rate postage is often cheap in the first place. On top of that, you also have the added benefit of being able to use flat-rate packaging instead of buying your own boxes or bags.
5. Buy supplies in bulk.
Sometimes it doesn’t make sense to use flat-rate packaging. If that’s the case, be sure to buy packing and shipping supplies in bulk. ULINE is a great place to start.
6. Use regional carriers.
If you do most of your business within a regional area, consider following this advice from Easyship:
Regional carriers offer the same services as major carriers like UPS and FedEx but at significantly reduced prices. The only difference is that – as their designation implies – their delivery network is limited as they only operate within a small geographic area. For example, you can partner with OnTrac in the West, LoneStar in Texas, and Spee-Dee in the Midwest. This can be a good option if your deliveries are within their region.
7. Stick to a handful of carriers.
The more you ship with a given postal carrier, the more likely they will be to give you a discount. They want to keep your business, after all. It’s not realistic for a small business to always ship by FedEx or UPS, but it often makes sense to prefer one over the other consistently. That way, you have stronger bargaining power when it’s time to negotiate rates.
8. Swap out boxes with polybags.
Postage rates are going up, but remember: a big part of shipping costs still comes from supplies. While flat-rate packaging and ordering supplies in bulk is often enough to keep costs low, you can still sometimes take it one step further. ShipBob recommends switching from boxes to polybag mailers if you ship items such as clothing.
Be careful with this, though. You have to be absolutely sure not to ship fragile items in a polybag!
9. Use prepaid shipping.
10. Use third-party insurance.
Another major expense associated with shipping is replacing items that were lost or damaged in the mail. If your items are high-value, consider buying third-party postal insurance with companies like Parcel Insurance Plan. It’s usually cheaper than buying the insurance directly from your carrier.
11. Outsource fulfillment.
Last but not least, fulfillment, in general, is expensive. Outsourcing it can often save you money. You save on labor, training, supplies, and storage at a minimum. You often also benefit from having peace of mind and retaining more customers. Once you’re shipping more than 100 orders per month, outsourcing fulfillment should definitely be on your radar.
Even with steep postage increases in place, there are still ways to keep shipping costs low so that your eCommerce business can thrive. We hope that you can use some of these for your business. If you have any other tips to share, let us know in the comments below!