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How to reduce shipping costs as a small eCommerce business

Posted on April 26, 2021
by Emma Burgess

For many start-up and small businesses, the calculations are endless. Constant budgeting and number crunching to calculate shipping costs are an unavoidable task for all eCommerce businesses large or small. It’s no secret that couriers increase their delivery costs annually, not to mention the recent addition of extra Brexit tariffs on cross border trade and the effect marketplace giants such as Amazon have over consumer expectations, small businesses are finding it increasingly difficult to compete. Without the capital to fulfil these delivery hopes SME’s have to find fresh ways to reduce their shipping costs and stay competitive in the ever-growing eCommerce sphere. There are lots of considerations when it comes to shipping products.

Shipping costs are usually calculated on the following: service and speed, shipping volume, dimension and weight, shipping supplies and destination. Thanks to the Amazon effect many consumers expect their items to be delivered the very next day, and they want them to be free. Understanding your product’s shipping requirements gives you a clearer idea of assessing the costs involved.  

 Here are some ways we can reduce these costs and increase profit margins!

1. Negotiate rates with carriers to save money

You don’t have to be a giant retailer with millions of orders to get discounted shipping rates, which will help you to cost effectively deliver to your customers at cheaper rates. Higher shipping volume indeed leads to more volume discounts – but even small businesses can benefit from comparing prices and negotiating lower rates. There’s no harm in negotiating volume discounts for shipping fees in exchange for loyalty to a single shipping provider, just ensure that your shipping solutions and promised delivery times aren’t affected. Plenty of shipping companies will be open to negotiation, some may even be offering free shipping to get you started.

2. Reduce your packaging 

Decreasing your items’ weight and dimension has a knock-on effect on the cost of how courier services price their items. An easy way to reduce your packages’ size is to ensure oversized boxes aren’t used for goods where it’s not appropriate. Choosing bespoke packaging for your brand’s products plays hosts to a variety of benefits, one of which is cheaper shipment. Some couriers provide their own packing, choosing these usually means you don’t have to pay the dimensional fees which result in a cheaper option.

3. Build shipping into the price of your product 

Even if shipping for customers is free, the price it takes to transport and deliver your goods must always be paid for by someone. While 88% of consumers prefer sites that have free shipping, this is once again a symptom that titans such as Amazon have created, and isn’t available for all eCommerce merchants. Encompassing the price of shipping into the overall cost of the product doesn’t give customers a nasty surprise when they hit the checkout, shoppers are still attracted to the lower costs of the items and are more likely to return to your store feeling like they’ve had an honest experience.

4. Alleviate risk by choosing a multi-carrier provider

Relying on a single courier service can be risky. If your sole provider were to fail, or unprecedented fallouts were to occur, such as the post-Brexit courier delays, your business would feel the knock-on effect, as would your customers. Here’s a list of the UK’s biggest courier services that you can choose today. Royal MailDPDHermesDHLUPSYODEL and Parcel Force.

If you’re looking for a trusted and competitive fulfilment provider, Huboo is an award-winning outsourced fulfilment provider based in the UK and mainland Europe. You can view their services for small businesses here to find out more!