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5 Tips for Saving Money on Shipping Costs

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5 Tips for Saving Money on Shipping Costs

By Caron_Beesley, Contributor
Published: August 16, 2011 Updated: March 2, 2014

If you sell anything online or regularly ship goods and services to customers – how can you be sure you are getting the best shipping deal for you and your customers?

Unless you’ve explored the full range of options, the shipping can become an operational nightmare and have a direct impact on your bottom line.  Costly errors include not checking shipments before they leave, or even knowing which shipping method to use. On the regulatory side, international shipping and custom laws can also present challenges to the uninformed business owner.

Fortunately there are many resources available to help the small business owner understand their options, conserve cash, and navigate international shipping regulations.

Below are five tips to help your business implement cost-effective shipping.

Remove the Guesswork

 From sellers on eBay to more complex supply chain management, one of the biggest issues business owners face is guessing the size, weight and shipping costs of their goods.  This is especially true when you are not actually doing the shipping yourself, but are relying on your manufacturer or distributor to get a last-minute order into the hands of the customer.  The result is that businesses often over-pay the cost of shipping just to ensure it gets there on time.

The only real way to remove the guesswork is to research all possible shipping methods and costs appropriate to your business needs. Which leads to our next point.

Do your Research

All the major shipping organizations in the U.S, including UPS, FedEx, DHL and the U.S. Postal Service (USPS) provide easy-to-use web tools to help business owners assess their shipping options based on business size, industry, and whether your transactions are domestic or international, or both. You can also consult a small business specialist from each of these organizations to help match the carrier’s services and fees to your most common (and unexpected) business requirements.

If you regularly ship in bulk, explore the options associated with freight transportation. If you can’t fill a truckload, consider LTL (Less-Than-Truckload). With LTL freight carriers will transport shipments ranging from 100 lbs to 20,000 lbs. If the costs are too high, enquire about consolidating your freight with shiploads from other businesses to cut costs.

Take Advantage of Shipping Tools

To help frequent shippers asses their shipment options, USPS and other carriers offer a range of online tools to help business owners manage the shipment process end-to-end. The USPS Shipping Assistant, for example, is a downloadable tool that lets you calculate shipping costs (domestic and international), print forms, standardize addresses and track shipments.

Another essential tool is the postage meter – never guess the weight of your package or overspend on postage ever again.

Avoid the Hidden Fees involved in Shipping Internationally

Custom charges, export compliance, proof of delivery are just a few of the considerations and complexities that come into play with international shipping. Custom duties and taxes alone can represent as much as 30 percent of the total shipping fees, so it’s important to understand the terms and hidden fees involved with any international shipping option that you have on the table.  Likewise, who is responsible for these fees? For example, if your supplier is shipping overseas on your behalf are you responsible for custom duties, etc. or is the supplier?  It’s an important distinction that can have an effect on your bottom line. So talk to your carrier about the terms of international shipping, the customs process, and how their service options can help you save costs.

If you are new to exporting, take a look at SBA’s guide to Exporting and Importing which includes an export business planner which helps your determine your export readiness, and more.  

Set Up and Communicate your Shipping Policies

A critical step to ensuring the ongoing cost efficiency of your shipping operations is to set up and communicate shipping policies internally. This way everyone in the organization is clear on which shipping method to use and when.

Likewise, be sure to let your customers know what your standard shipping policies are so that you are prepared to handle the unexpected. For example, if your standard service is four-day ground but the customer needs a shipment overnight, establish a policy beforehand that passes on the additional cost for expedited shipping to the customer.

Related Articles

·       Get Started in Shipping - Regulations for Importers and Exporters

·       Selling Internationally? 8 Reasons why Business.usa.gov/export Might Just Be Your New Best Friend

·       SBA Idea Exchange: Small Business Owner's Exporting Experiences

 

Caron Beesley has over 15 years of experience working in marketing, with a particular focus on the government sector. Caron is also a small business owner and works with the SBA.gov team to promote essential government resources for entrepreneurs and small businesses.

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

International Shipping can be complex sometimes. Enlisting the services of a consultant or third party takes the guessing out of it and leaves it to the professionals. Allowing you to focus on running your business locally.
It's really important to save shipping costs especially for a company that deals with logistics and especially when the economy is having a downturn. And it's not easy to manage costing with careful budgeting and costing.
I am pretty sure the benefit of having service like USPS is they are professional in what they do. Shipping business is not an easy business, it is complicated.
There are so many factors that can go into shipping something that it really depends on the product and the companies that are shipping and receiving. Sure, there are ways to save money and cut corners, but in the end that solution sometimes doesn't work out for either party. Protecting a product is very hard in today's fast-paced society and their are few options. Bubble rap and other fillers often do not work, but there are other solutions. Shipping cases and carrying cases are just two options for protecting valuable products that need to be shipped. Sometimes spending the money to protect the product is cheaper than replacing the product.
Great article - the LTL trucking option can be great low cost solution for small to medium sized businesses who ship regularly in weights of over 100lbs. LTL carriers also deal a great deal with pallets of freight so if you can take the time to package your freight on a standard pallet (4' x 4'x 4') you'll likely save even more as it is easy to handle and load/unload.
USPS doesn't charge a fuel surcharge as other carriers, such as UPS. Many people may not realize the postal service can take packages that weigh 70 pounds or less. We can help just by sending a 'thinking of you' or 'get well' card once a week to someone in the nursing home that really needs a friend. This will cost $0.44 plus the card and envelope cost. You could even make your own or have your children or grandchildren design the card. The Dollar General Store in my area has cards for 2/$1.00 or sometimes a variety pack on clearance for less than a $1.00. You could also help by contacting your senators and representatives in letting them know you want the postal service to be able to keep operating. If we all don't pitch in and help the postal service, within 5 years there may not be a post office to go to. Your mail may be delivered by contract carriers who are hired off the street with no background check or finger printing required. The postal service needs your help fast!  Here's an article that shows a great contributing factor on why the postal service is in such financial trouble that many US citizens may not be aware of:http://www.govexec.com/dailyfed/0810/082310l1.htmIt's a real dire situation right now for the operation of the postal system to continue!!
Thanks for the post, Caron. I'm just getting going with a start up but shipping will be an important step in the production process. This was helpful, especially the suggestion to contact the small business assistance at the shipping carrier! Thanks again for the post! Matt West

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