Useful Tips for a Small Business: How to Lower Shipping Costs
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Small businesses often face the question: how appropriate is it to compete with giants in such platforms as Shopify, Etsy, Amazon when it comes to delivery? Regardless of size, niche, and even experience, delivery to any corner of the world is what unites all eCommerce stores. The good news for the small print on demand stores is that there are strategies to reduce costs.
Ecommerce is now in a golden age. Nevertheless, some events affect demand, purchasing power, user experience, etc. Thus, it’s vital to manage finances to a limited extent properly. The pandemic provoked the bankruptcy and closure of many physical stores, but they could get a second wind by trading online. Consumers still prefer discounts or free shipping - and this is the real evil that most online sellers suffer from. How to lower shipping costs and give people what they want, read on.
Table of contents
The shipping process inside out
If we simplify the print on demand dropshipping process to simple operations, it all comes down to the product manufacturing, packaging, and transferring to the client. And the critical point is that the parcel must be delivered on time and in perfect condition. In case of damage or worst-case scenario when it’s not supplied, it'll lead to a wrong impression of your brand and lower the reputation in the market.
The delivery cost includes the following parameters:
- Packing: box, polyethylene, filler, scotch tape, stickers
- Labor costs
- Courier services
- Import/ export charges in the case of print on demand international shipping.
As a seller, you must report the cost openly - establish a delivery policy that legally describes the compliance of the ordered product, timing, and price to customer expectations. It’s essential to perceive such tactics as an ally and a reliable asset, which will help solve any problems and answer all the questions.
Shipping cost for small businesses plays a key role: it affects whether a customer is going to buy the product.
To properly configure delivery settings, analyze the following aspects:
If you work on the Shopify platform, it’s worth considering that carriers such as USPS, UPS, DHL Express, and Canada Post may be used at reduced rates depending on the subscription. E.g., a Basic Shopify subscription provides savings of up to 77.13% for UPS and 71.5% for DHL Express international shipping.
Preferred delivery methods
- Pickup service
- Urgent delivery
If you utilize the packaging of the same goods, set the price as the default option on the expanses of your store.
Perfect packaging look:
- Corrugated boxes
- Lightweight air pillows
- Packing paper
- Versa Pak wadding rolls
- Bubble wrap
- Foam inserts
- Custom shipping package
Tip: check if your carrier offers free packaging
Printing of the delivery label
When the client pays the total cost, you bear the cost of delivery label printing. But your savings can largely depend on the Shopify tariff plan.
The term implies invoicing at the same price as USPS and DHL couriers. If you’re in the US or Canada, you can use the Shopify functionality to calculate exact rates.
How to calculate shipping costs for an online store? Specify the data for the following parameters:
- Shopify tariff;
- transportation type: local or international;
- location data;
That’s a fee charged based on the product's weight, the client's location, or the total order cost. You can request $5 for any order shipped within Florida. It shouldn’t affect your profits and offer customers an attractive discount.
Tip: depending on the size, you can try to work with different services. When it comes to sending goods within the country, the most optimal option for small and medium-sized packages will be the Postal Service's Priority Mail. For those that are bigger, FedEx Ground or UPS Ground. Overnight shipping will be the cheapest, especially with Postal Service Priority Mail Express.
According to research, almost half of buyers abandon carts due to high additional costs (e.g., shipping and taxes). Therefore, more and more digital marketers are offering buyers free shipping if they buy a product for a certain amount.
Tip: use this method for inexpensive products.
5 tips on how to cut shipping expenses
Reduce the parcel weight
The cheapest shipping method for small businesses is to reduce the actual or bulk weight. And even if you pay a couple of cents for a light package, they’ll turn into hundreds of dollars and a few ounces of weight saved on a large scale.
Note: light packaging increases profitability.
Use packages of specific sizes
It often happens that the packaging is larger than the product itself. That increases the cost due to the overall weight and is also very inconvenient for customers. Therefore, think of the most suitable option that will solve this problem.
Note: many carriers provide free packaging: USPS, UPS, and DHL Express issue some types of packaging free of charge.
Offer local delivery or pickup
Lately, print on demand fulfillment through local businesses has become a trend - nearly a third of buyers admitting to using local delivery. It’s an alternative to working with a courier, which can save you a lot of money and increase customer loyalty.
Stay informed about tariff changes
Perhaps this is one of the essential points that can have a significant effect on profits. Like any service company, carriers annually (or quarterly) revise rates due to increased cost of fuel, labor costs, transport, depreciation, etc.
Utilize a fixed price
Sometimes it can be challenging to keep up with changes in tariffs: only in 2021 USPS increases the rate to 4.95%, depending on the size of the package. Conversely, FedEx has been more supportive of its customers and has raised the price from $0.10 to $0.35. This situation tempts entrepreneurs to set a fixed price and not be afraid of budget losses.
You can set such a rate on the platform and control how much the buyer will charge when ordering.
To track delivery, utilize a specially created software for print on demand fulfillment services from Podza, that enables you to control the entire process - from the delivery of goods to their arrival to the client's door.
Shipping costs are part of those annoying costs that affect your bottom line. Several universal strategies reduce delivery costs for small business entrepreneurs and large giants and make them more profitable.
To give your business a second wind, try to implement the following tactics: set a fixed price, track carrier pricing, and take care of the packaging and delivery type. You’d pay attention not only to the platform's tariff plans but also to which transport carriers they work with. Frequently transport companies offer effective tariffs for regular customers - find out which ones are available in your region.
In 2021, a popular and essential addition to every entrepreneur is the work automation framework implementation. PodZa is an ideal option because it was created specifically for the print on demand business and controls when your product reaches the client on time, in perfect condition, at the best price, and with a smile!