How to Cut Shipping Carrier Costs for Your Business

For growing eCommerce brands, shipping costs are a significant but necessary expense. If your shipping costs are too high, they could eat into other parts of your budget, making it difficult for your business to grow. 

This challenge is compounded by the fact that today’s customers have come to expect affordable shipping options. In fact, 90% of customers are likely to abandon online shopping carts if they notice high shipping costs. To compete with larger eCommerce platforms, you’ll need to keep costs in check. 

Luckily, there are steps you can take to make your shipping costs a little more manageable. Here are some easy ways to reduce the amount you’re spending on shipping.

Take Advantage of Discount Rates

As a small business, you have access to discounted shipping options that the average consumer doesn’t — you just have to know where to look for them. 

Most major shipping providers have discount programs for small or local businesses, including USPS, UPS, and FedEx. Providers may also offer additional volume or loyalty discounts. This is a win-win for both parties: you get more affordable rates, while the shipping provider consistently wins your business. 

Another option is to use digital comparison tools to find the lowest rates for each shipment you send. These software programs conduct a full-cost comparison automatically, so you don’t have to manually search for the lowest rates. Some tools, such as Shippo, ShipEngine, and Easyship, offer exclusive discounts and negotiation services.

Choose Strategic Warehouse Locations

As your business grows, you’ll need to expand to new warehouse locations. These might be your own warehouses, or the warehouses of a partner 3PL. 

As you expand, choose your warehouse locations strategically based on shipping zones and where your customers tend to be located. Shipping zones are geographic territories that providers use to calculate shipping costs. 

By placing warehouses strategically in different regions, you reduce the number of shipping zones that your product needs to travel through to reach its final destination. For example, you might use warehouses on both the east and west coasts, rather than shipping all your products from the same city.

Use Cost-Effective Packaging Options

One often-overlooked way to cut shipping costs is to adjust your packaging. Most shipping providers factor weight and size into overall shipping costs. Switching to smaller boxes that weigh less can help you cut costs. 

Another way to save on packaging is to buy boxes, packing materials, and tape in bulk, so the cost per unit is lower. When possible, try to reuse materials from returned shipments, or connect with other small businesses in your area that have extra boxes. 

When you lower your shipping costs, you can pass on those savings to your customers to keep them happy. You’ll also be able to re-invest those savings into your growing business. 

ReadySpaces offers flexible warehouse rentals designed with small business in mind. Get in touch with our team to find a location near you or learn more about our membership options.