How to Bring Down Your Shipping Costs

We have been spoiled by Amazon. They are lucky that millions of people subscribe to Prime and thousands of merchants pay inventory fees, as this is what drives down their shipping costs, and allows them to offer free shipping.

If we don’t get free shipping on a certain product online, we typically won’t buy that product online, but rather buy that same product at a retail store. Because of this spoilt behavior, it’s important to offer free shipping, or at the very least cheaper shipping than your competitors. Today we will go over some things you can do to help bring down your shipping costs.

Reuse Boxes to Lower Shipping Costs

This is an extremely easy way to bring down your shipping costs. Whenever your company receives a shipment of any kind, keep the boxes and packing materials. The reason for this is because you can then reuse them, to ship goods people order from your website. By doing this, you are literally not spending any money for the shipping materials. You also are helping the environment by doing your own recycling. If there is an issue of not having enough boxes, then you can save the boxes you receive from personal orders, and you can also ask your employees to bring in boxes they receive from their own packages.

Have a Centrally Located Distribution Hub

If your company can afford it, you should invest in a well located distribution center. If the majority of your shipped goods are sent throughout the US, then the best location for a distribution center is the Midwest, as that is the center of the country. No matter which coast people are ordering from, the distance from either coast to the Midwest is going to be shorter then shipping something from your Florida HQ to someone in Oregon.  For some, the Midwest may not be the best location. You have to see where most of your items are being shipped too. If most of your shipped goods are going to the east coast, then having a distribution hub on the east coast is a better option.

Offer Free Shipping When Spending More Than X Amount

If you feel like reusing boxes is too tacky or opening a distribution center is too expensive, you can still bring down shipping costs, and/or offer free shipping. To do this, you need to create enough of a profit margin to cover the shipping costs. A common way company’s do this, is by offering free shipping on orders over $50 dollars. By doing this, you should be able to have enough of a margin to cover the shipping costs with a expensive shopping cart. The specific value where you can offer free shipping is dependent on your company, but its important not to have a price that is too outrageous. Don’t choose a value greater then $100.

Here are 3 different ways to bring down shipping costs. To get the most savings, you should use all 3 at once, but regardless of which you choose, you should be able to offer, at the very least, cheaper shipping to your customers.

To learn about how Cerius Interim Management can help you and for more information on interim executives, please visit our home page by clicking here.

Learn how we can help your business grow profitably today.