Shipping can be one of the largest expenses for any business owner, and often, it’s an area where costs can spiral out of control without even realizing it. If you’re a small business, being strategic about your shipping costs is essential for keeping your bottom line healthy. Here are the common ways businesses unknowingly overspend on shipping and how you can avoid them:
1. You're not optimizing your shipping rates
Using the default shipping rates from your carrier might feel like the easiest option, but it’s rarely the cheapest. You can negotiate rates or switch to a carrier that better suits your shipping needs. If you’re shipping similar items regularly or sending packages to the same region, this is a golden opportunity to save.
📌 Here's what you can do!
- Reach out to your carrier and ask about volume discounts or custom pricing. Carriers love loyal customers, and they might offer better rates if you ship consistently.
- Compare carriers for your most common package sizes. Sometimes regional carriers or newer delivery services can provide better rates than the big players.
2. Your boxes are too big
Oversized boxes cost you more. Shipping carriers charge based on dimensional weight—how much space your package takes up—not just its actual weight. If you’re shipping small items in unnecessarily large boxes, you’re essentially throwing money away.
- Invest in right-sized boxes or padded mailers for smaller items. This reduces dimensional weight costs and gives your customers a neater, more thoughtful unboxing experience.
- If you’re worried about protecting your products, try void fill like paper or biodegradable packing peanuts.
3. You're always using the fastest shipping option
Offering lightning-fast shipping feels like you’re going the extra mile for your customers. But not every order needs to arrive overnight. Expedited shipping is significantly more expensive, and for most customers, a few extra days won’t make a difference.
🚀 Try these instead
- Match your shipping speed to your customer’s needs. If they’re fine waiting 3–5 days, offer ground shipping instead of paying a premium for faster options.
- Use hybrid services like FedEx SmartPost or UPS SurePost, which combine carrier networks with local delivery to keep costs low while still getting the job done.
4. You're relying on just one carrier
If you’re only using one carrier because it’s convenient, you might be leaving money on the table. Different carriers have different strengths. For example, USPS is fantastic for lightweight packages, but UPS or FedEx might offer better deals for heavier shipments.
Compare pricing and service levels from multiple carriers to find the best match for your needs. Use rate comparison tools like ShipStation or Pirate Ship to evaluate pricing from multiple carriers. Or, consider regional carriers for local deliveries—they’re often faster and cheaper than national options.
5. Your fulfillment center is charging you too much
Outsourcing to a fulfillment center can save you time, but it can also lead to hidden shipping fees. If you’ve noticed your shipping costs creeping up since using a third-party service, it’s time to dig into the details.
✅ Here’s What You Can Do:
- Ask for a detailed breakdown of their shipping fees. Are they bundling charges in a way that inflates your costs?
- Negotiate rates based on your shipping volume or switch to a provider with more transparent pricing.
More shipping tips here!
6. Your returns are draining your profits
Covering return shipping might seem like a good customer service move, but if you don’t have a clear returns policy, it could be costing you big. Returns can quickly eat into your profits, especially if they’re frequent or unnecessary.
🔍 To Reduce Return Costs:
- Create clear product descriptions and sizing guides to minimize customer mistakes.
- Charge a restocking fee for certain items to offset return costs.
- Instead of offering refunds, try issuing store credit to encourage repeat purchases.
7. You're not using access points
Many carriers, including UPS and FedEx, offer access points where customers can pick up their packages rather than having them delivered to their homes. This service can lower delivery costs, especially for residential deliveries, which often come with higher fees. If you're not offering the option for customers to pick up from these access points, you might be missing out on a cheaper and more convenient way to fulfill orders.
8. You're not preparing for peak seasons
Shipping costs can skyrocket during the holidays or other busy times of the year. If you’re scrambling to book last-minute shipments during peak seasons, you’re probably paying inflated rates.
🗓️ How to get ahead
- Plan your shipping in advance. Many carriers offer discounts if you book early or ship during off-peak times.
- Build a seasonal buffer into your pricing strategy to cover temporary rate increases.
9. You're not tracking shipping performance
How often are you reviewing your shipping costs and carrier performance? If you’re not keeping track, you could be missing opportunities to save. For example, are you paying extra for a carrier that frequently delivers late?
📈 Start Monitoring These Metrics:
- Average cost per shipment.
- Delivery times and on-time rates.
- Customer feedback about packaging or delivery issues.
Regularly reviewing this data will help you identify inefficiencies and make smarter decisions.
You can save on shipping—and look great while doing it!
Reducing shipping costs doesn’t have to be complicated. Small tweaks, like optimizing your packaging, comparing carriers, and offering access-point delivery, can lead to significant savings over time.
At Impack, we’re here to help you take it a step further. From custom stickers to biodegradable mailers, we make it easy to enhance your brand’s presentation while keeping costs in check. Get started today and see how Impack can help your business grow!
FAQs
