Online merchants are often caught between the increasing demand for free delivery and rising shipping and fulfillment costs. Thankfully, there are some simple ways to reduce the cost of shipping and order fulfillment. Here are ten of them.
1. Rate Shop
Rate shop your parcel among all the carriers and delivery Companies. f your package weighs less than 13 ounces, you can use first class mail, as this is the lowest cost delivery method available for lightweight packages.
2. Use Air Delivery Only if Necessary
Use express air delivery only when really needed. A common mistake is to ship an entire order in-bound or out-bound by next day air delivery when actually only a percentage of the shipment is required on a rush basis. To avoid wasted expense, use express delivery for only enough merchandise or supplies actually needed in the short term and ship the balance by lower cost ground or truck freight.
Adjust your carton sizes to avoid dimensional weight (DIM) and oversize surcharges.
Use a rewards credit card to pay your shipping and supplies bills.
Use electronic package processing to earn discounts. If you use a postal system such as Endicia or Stamps.com you can earn a discount on express and priority mail plus discounted ship confirmation fees if you submit the details electronically. There is a monthly fee that must be netted against the discount savings, but the cost reduction potential is substantial if you ship mid-to-high volumes per year. If you are shipping in volume, a rate shopping system can quickly pay for itself by searching all the available carriers and kinds of delivery options for the best combination of cost and delivery. If you don’t ship in volume, you can still develop a set of your own shipping rules that will help your warehouse staff avoid the most common package processing errors.
Use online freight broker systems to shop among truck freight carriers. You can use an online freight broker system like shippingexchange.com to find the best deals for individual in-bound or out-bound truck freight shipments. Getting the best rate depends on gathering the facts about each shipment and determining the freight class accurately.
Join a trade organization that offers delivery discounts.
Negotiate discounts with your supplies vendors. As you build shipping volume, switch to ordering shipping supplies with blanket orders subject to monthly releases in the quantities you need.
Audit your common carrier invoices for errors, You can do your own checking or there are a number of auditing companies that will examine your invoices on a percentage of savings arrangement.
Outsource order fulfillment to reduce your overhead costs. Outsourcing fulfillment is actually quite easy. The trick is to get a good match between your order processing needs and the fulfillment company’s systems, methods and materials. Fulfillment fees are normally based on per order and per item charges plus Company reimbursement. To this you add monthly storage and optional warehouse service fees. You should expect a 100 percent satisfaction guarantee and a free trial before you make a commitment.
