How do you reduce your shipping costs?

Poster
Message
Herts, England United Kingdom
Andy
Kudos: 11,623
Joined: Jan 1, 2001
How do you reduce your shipping costs?
24 Jul 2015
There are many ways to reduce the cost of shipping, but which have you actually used in your business and how successful was it?
Andy Geldman, Web Retailer
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Supplier
Toronto Canada Canada
Stalco
Kudos: 41
Joined: Jun 9, 2015
Re: How do you reduce your shipping costs?
24 Jul 2015
Avoid using international services whenever possible. Slapping an International FedEx label on a package is expensive and will create headaches for your customer as they could get stuck paying additional taxes, duties and brokerage fees when they receive their order.
Consider using a consolidated service. Set all your international orders aside and have a consolidator pick them up to clear them through customs in bulk. Once they arrive in the destination country, the consolidator will insert them into the domestic postal service at a fraction of the cost. This method saves time, and for our customers, typically saves around 40% vs International FedEx or UPS.

We're a Canadian 3PL specializing in consolidated shipments from the US. If you only ship a few packages a week internationally it may not make sense but we can usually make the math work for pickups as low as 25 packages at a time.

[Last edited: 24 Jul 2015]
Looking to Ship to Canada or Internationally?
Lowest rates on small packages under 5lbs.
Consolidated shipping options to eliminate COD taxes, duties and broker fees for your buyers.
www.stalco.ca
Bangor, Co-Down United Kingdom
roypat05
Kudos: 96
Joined: Mar 22, 2014
Re: How do you reduce your shipping costs?
24 Jul 2015
This is a real headache for small item eBay sellers like myself. If I want to sell say a luxury pair of tights abroad it would cost me more than the item value to have them sent signed for, and there is so much fraud if you don't send signed for ( which I have experienced myself). I sell a lot of more expensive items that would qualify as 'large letter' size but they still cost on average £9 -£10 to post signed for, and theyb are not that luxurious than anyone wants to spend that much for postage. Couriers are not practical for smaller volumes and are not usually as competitive for large letter size as Royal Mail.
Johannesburg South Africa
ready4export
Kudos: 52
Joined: Jul 2, 2015
Re: How do you reduce your shipping costs?
24 Jul 2015
Thanks for inviting me Andy,

I really appreciate the opportunity, besides EXPORTS I love connecting people companies so this has made my evening, love being part of this.

Your question seemingly simple is by no means as simple:

Alot of information is missing in the actual question, which would be used in find the solution and achieve the goal which is - lower shipping costs.

Honestly I have tried three times now, to broadly answer this question but keep running out of space, and most of the information is critical so I can’t leave it out.

Andy please would you consider this offer, I want to help anyone struggling trying to find better solutions, lower costs etc.

Send me your questions and I will do my best and try and find better methods and possible solutions to help your subscribers achieve their goals or get closer to achieving them.

I will do this free of charge, and really you have nothing to loose only time taken to get information down on paper, once I get the request and question I will work through it, give my information and advice, I will send a complete mail to Andy. If you feel there is value in the Q&A then Andy please post it for your other subscribers to read.
I’m not anything and don’t proclaim to have all the answers, I only have my experience, passion and massive desire to help. That’s it, I’m prepared to share my experiences if you want. Nothing more and nothing less that’s it.

I have experience in : shipping lines, freight forwarders – small and Large Global one brand type companies, the SCO for a company owning 700 fast food stores throughout Africa. Managing Distribution centres in each region/country, responsible for the a to z type supply chain, My last year we shipped 30million Rand’s worth of goods (Capital equipment and consumables) through the year in 2010 and achieved a total freight cost of 9.8% to the value of product exported which in any supply chain process is a good achievement. Think about it Andy let me know when you have a chance.

Awesome

Thanks again

Hugh

Many Thanks

Hugh - R4E
Ready 4 Export, International Trade Facilitator. Passionate & Dedicated to South Africa, our Beautiful Continent & its long over due economic growth.
NC United States
seller252gregb
Kudos: 171
Joined: Apr 12, 2015
Re: How do you reduce your shipping costs?
25 Jul 2015
It seems this discussion is focused on International shipping. I do not use GPS for eBay International as USPS has the best price to mail directly. I use a third party insurer so I can go First Class International to be very competitive.
I also use USPS for 99% of domestic shipments as average weight is 3 to 4 pounds.
Midlothian, VA United States
Jax Music Supply
Kudos: 2,361
Joined: May 25, 2009
Re: How do you reduce your shipping costs?
25 Jul 2015
There are several things I do to keep my shipping costs down.

1. Reduce weight/dimension. When selecting inventory I keep in mind the package sizes and weight. I also choose ship packaging that will provide the best weight/protection ratio. For this, I mostly use poly bubble mailers. I prefer the poly's over the craft versions as they tend to be lighter, not as easy to tear, and are water resistant. I love having items that are in the 2oz range that fit in a 4x5 padded envelope.

2. Software/Service. I use Teapplix with my Endicia account. A major expense is the time it takes to ship an item. Teapplix makes this easy for me to by importing my orders from most of my marketplaces as well as uploading the tracking automatically. For 1st class US I get the online price, sames as people get through Paypal or purchasing online from the post office. For Priority mail, I get an additional reduced rate through Express 1, a 3rd party postage provider, which is automatically integrated into my Teapplix account. Express 1 savings aren't much (seems like it is maybe a $0.25 per shipment) but it doesn't cost me any extra and will take the savings. Teapplix also integrates my mail consolidator (see below).

3. Additional Service - I use Globegistics (www.webretailer.com/profiles/globegistics.asp). Globegistics is a mail consolidator for international shipments (outside the US and Canada). I save BIG money using this service. It integrates with my shipping system and easy to use.

4. USPS pick up. I see a lot of sellers take their packages to the post office. Thats a huge time waster. I schedule my pickups for free as part of my regular mail pick up. I print my scan form (proof of package pickup), set it out on my porch and the post man picks them up at the same time my mail is delivered.

5. Risk Mitigation. Some people choose to insure all their packages. I only insure packages over a $100. However, you still have lost international packages (loss, theft?) that can add up. Since most of my packages are below $100, I am basically self insuring and treat it as such. I monitor my my lost packages and sales very closely. I look at the frequency of loss by country (# of lost packages / # packages sent ) and the severity of loss (average lost order amount). This gives me a loss cost for that country. So, if I send 100 orders to Brazil a year, at an average of $20, and 10 are lost, my loss cost per order for Brazil is $2 per order (10/100*20). I build this loss cost into my flat shipping rates per country. So if my base shipping is $5 for international, loss cost to Brazil is $2, I will charge $7 to ship to Brazil. Canada loss cost is $0.25, I will charge $5.25 to Canada. I still monitor closely and have to totally stop selling to some countries (Mexico, Argentina) when loss costs get too excessive. At a certain point, you have to assume that if it costs $20 to ship a $20 item, and someone pays that, it will be "lost" for sure!
Supplier
Ahmedabad, Gujarat India
erikathomson
Kudos: 173
Joined: Jul 2, 2015
Re: How do you reduce your shipping costs?
28 Jul 2015
I use dropshipping to reduce shipping costs and to maintain all this I use cloud-based software solution.
Dropshipping management is also called blind shipping
There are many reasons that this technique is helping me in reducing shipping costs

How it can be beneficial to retailers:

1.No need of worrying about initial investments

Eliminating the most expensive business overhead- retailers don’t have to worry about the cost behind purchasing and stocking products. Retailers can directly contact suppliers and provide them with the order details, who in turn, will process and deliver to end-customers. Having an ability to reduce investment in dealing with inventory and fulfillment tasks will help small retailers utilize most of the capital in retaining and diverting new customers for the business.

2.Offer a wide range of products without having to deal with them

If you want to deal with inventory on your own, you’ll need sufficient storage space to stock them. However, at some point of time, the storage space and maintenance costs will make you think twice before introducing new products. To avoid those risky-taking situations- adopting dropshipping eliminates the need of inventory costs, helping small retailers to freely expand their product line on websites and sales channels without giving a second thought.

3.Gain increased visibility in less time

As suppliers will be stocking inventory and processing orders on retailer’s behalf, store owners can easily start selling the moment the products is published on website and other channels. This way, dropshipping allows small retailers an ability to gain visibility in less time.
Bangor, Co-Down United Kingdom
roypat05
Kudos: 96
Joined: Mar 22, 2014
Re: How do you reduce your shipping costs?
28 Jul 2015
@erikathomson

Whilst totally agreeing with the idea of Drop Shipping in principle, how does a small business go about finding reliable suppliers? There is so much hype and fraud on line that its hard to know who to trust. Have you any suggestions how to break into this lucrative market?
Florida United States
Domoing Commerce
Kudos: 277
Joined: Jul 28, 2015
Re: How do you reduce your shipping costs?
28 Jul 2015

Stalco wrote:


We're a Canadian 3PL specializing in consolidated shipments from the US. If you only ship a few packages a week internationally it may not make sense but we can usually make the math work for pickups as low as 25 packages at a time.
I have been trying to expand into Canada but customs always seems to be a pain. Mainly trying to expand my Amazon market. If you have and info please message me. I need to move pallets!
Barrie ON Canada
Richard391
Kudos: 34
Joined: Jul 28, 2015
Re: How do you reduce your shipping costs?
29 Jul 2015
We use Canada Post almost exclusively and we've had great success. If you're a Canadian seller, especially of small items, you need to look at them. Country-wide service at very competitive prices.

Their volume discounts are great, too. I think we're on about 40% off on a 2000 pkg/yr contract, which means we can be competitive on shipping and still make a few bucks on it (or offer free shipping that doesn't impact our margins greatly.)

As with any service that uses dimensional weight, we take great care to use the smallest packaging possible as well. We have a large variety of weights and sizes in our product line, so that's a challenge, but we have done it out of necessity and it saves us quite a bit.

Speaking of dimensional weight, we also re-posted the dimensional weights to our website so the customer calculations come closer to our real cost of shipping on oversized items.
Richard - RV Part Shop
Supplier
London United Kingdom
Simple Merchant
Kudos: 38
Joined: Nov 4, 2014
Re: How do you reduce your shipping costs?
30 Jul 2015
For UK sellers shipping domestically, if you have reasonable volumes you can use a service called Downstream Access (DSA). DSA is mail that has been collected and distributed by a competitors (Whistl, UK Mail, etc), but is handed over to Royal Mail mail centres for final processing onto local delivery offices, where they are delivered. This service is an equivalent of a 2nd / 48 hour service.

You can effectively do this into any country where you have volume some in thread of labelled this as consolidated shipments.

If you don't have volume, then you can still potentially get the same rates by consolidating with other merchants or providers. Happy to point people in the right direction, if you need more details.
_______________
Abe Choi | Simple Merchant
Pick, pack & ship - all in 1 shipping label
Nottingham United Kingdom
Bigian13
Kudos: 2,254
Joined: Feb 21, 2014
Re: How do you reduce your shipping costs?
9 Aug 2015
Bend The Truth and Shop Around

When we first started out we were sending around 30 items a day UK bound through the local post office. When we applied for an account with RM we told them we were sending 100 items a day. When the account was accepted, this gave us the discount we needed to reduce our prices and virtually overnight we achieved the 100 items a day.

Most sellers have their preferred couriers for national and international deliveries. We have ours, who give us a good rate for larger items to France and Germany especially. However if you check sites such as parcel2go and parcelmonkey you will often get cheaper rates, even from the same courier as the one you are using. So it pays to shop around.

Your customers are not always loyal to you, they are looking for the best price and service, so make sure you do the same ! Just ensure you get a reliable delivery service as this could hurt you more than a higher price.
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