Shipping costs are a huge consideration for any business that sells products. Managing them can be the difference between a successful company and one that folds due to lack of customers. Here we look at the top innovative ways to keep shipping costs manageable. From pallet shipments to Amazon’s fulfilment centres, here are great strategies for reducing your company’s shipping costs.
Major retailers like Amazon and big box stores have fulfilment centres that are used to distribute products. Many small companies have begun selling through these major retailers for two reasons. The first benefit is clearly the access to the larger number of consumers at the larger retailers. This increases visibility of the product and a positive association with a better-know company.
The second reason to sell through a major retailer is the ability to use fulfilment and distribution centres. Rather than shipping products to larger numbers of individual consumers, small companies can send their products in large shipments to a single location. From there the retailer will either box and ship the products for delivery to individual customers or transport the products to their various brick and mortar stores.
By shipping to fulfilment centres, you can combine your orders into single pallets that can be delivered all at once. Not only will this greatly reduce your shipping costs, you’ll have fewer packages to track and you should also save money since you should need to purchase fewer boxes and packing materials. For some small manufacturers, pallet shipments are particularly helpful. They can produce more items of stock, adding them to an awaiting pallet as they are completely. Once a pallet is full, the entire order is sent at once. This can allow manufacturers to operate efficiently, with less warehouse and storage space.
Offer Free Shipping with Minimum Order
Offering free shipment might seem like it would increase your costs, however, depending on the types of products you sell, free shipping can save your company money. Studies have shown the most common reason for shoppers not purchasing the items in their online shopping cart is the shipping expense.
While shipping may be a necessary cost, by offering free shipping to orders above a certainly monetary amount, you can reduce your per-shipment cost. Often it costs either the same or very little more to ship multiple items than it does to ship just one. For smaller items, in particular, the incremental cost to ship more of the same item may infinitesimal. Meanwhile, by setting a minimum purchase amount, you will increase the average number of units you sell to each customer.
In addition, the added revenue from more sales per client, consolidating orders can provide more cost savings to your company. Less worker time and effort is required to package, ship, and track sales of a few larger orders than the sale of the same number of products to many individual consumers.
If your company sells your products to businesses within a specific geographic region, your most economic option may be to rent storage space in the area. Shipping pallets of goods to your regional storage facility can prove a great cost-saver. Then, as retailers require more inventory, you can make deliveries by truck, rather than uby sing couriers to transport individual boxes of merchandise.
Think of it as having your own mini distribution centre. As you ship pallets of your completed products to storage, this will free up space in your manufacturing facility. Localized merchandise storage also allows you to improve your customer service. Rather than waiting for items to be packaged and shipped to them, retailers can promptly receive new inventory from your company. This makes it easier for your customers to maintain a supply and therefore ongoing sales of your product. Quick delivery also means quicker sales for your company.