Seems like everyone these days is trying to offer a deal on shipping, aren’t they?

From Amazon’s promise of free two-day shipping on all Prime orders to the increasing number of ecommerce retailers offering reduced or bulk shipping rates, reduced shipping costs are a good way to retain customers and earn new ones, particularly for items they can’t get good shipping costs on elsewhere.

But the question stands: how do you get those shipping rates in the first place? How can you reduce the cost of shipping goods and pass those savings on to the customer without putting yourself in financial trouble? The answers may be easier than you think—if you’re willing to do a little math and use your imagination:


Optimize your shipping strategy

The first (and perhaps best) way to start offering reduced shipping costs is to optimize your overall shipping strategy. In many cases, increased shipping costs are brought on by having a shipping method that involves too many steps that drive up the price and reduce overhead. Review your current shipping methods to identify bottlenecks—are too many of your shipments being handed off to external vendors at increased cost and time? Do your current shipping partners offer reduced rates for slightly longer handling times? Can you locate shipping partners that will offer a less costly solution to start implementing a free shipping option? Consider your current shipping method and make cuts and changes where needed. This will reduce your overhead in general and provide more affordable shipping options for your clients.


Factor shipping costs into item prices

Let’s face it: everyone needs to feel like they’re getting a deal. How many times have you or someone you know passed up on an item that cost $25 with $5 shipping only to buy that same item at $30 with free shipping? (It’s okay, we can all admit it.) This is a good way to start offering free shipping—by adjusting the sales-to-customer cost of each item to factor in a standard shipping cost, you can offer free shipping on more items without impacting your bottom line nearly as much as you might be expecting.


Trim the fat in your picking methods

A lot of the cost in “shipping & handling” comes from the “handling” side of things. By reducing the amount of time your items spend getting ready to go, including moving from warehouse storage to the shipping area, as well as the amount of time it takes to get packed and on the truck, you can reduce the impact shipping times have on your operations and begin to pass the savings on to the customer in the form of reduced shipping prices.


Reduce packaging sizes

Similar to the previous step, reducing packaging sizes can help reduce costs for both you and your customers in a number of ways. Wasted packaging, in addition to being a constant issue for the environment, can contribute to increased materials costs for you due to the amount of packing materials being used, as well as higher fees from your shipping partners due to the amount of space the bigger packaging takes up. By reducing packaging sizes and investing in a wider range of packaging options to fit items of various sizes and shapes, you can reduce shipping costs for both your warehouse and the customer.


Utilize online shipping where possible

A lot of companies these days offer services for printing postage and shipping labels, typically at a reduced rate over something like USPS due to the decrease in materials. By utilizing these services, you can print your own postage and shipping labels to save time and reduce the steps involved with shipping a package, and the savings will accumulate over time to reduce shipping costs for your entire operation.


Have you implemented other cost-saving methods in your warehouse to reduce shipping expenses? Leave a comment below!

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