CALCURATES BLOG

How Your E-commerce Can Cut Shipping Costs Today

November 2019
How to cut shipping costs
Nikolay Pasholok
Product Owner, Calcurates
Although there are countless factors that influence final shipping costs, they normally boil down to how you ship, how bulky your parcels are, and where you send them. Revising your shipping approach is always a good thing, and there are several specific insights that you need to know.

Shipping Methods, Tools, and Partners

Have a look at this guide to shipping options and examine your business by answering some basic questions like these: Can you offer free delivery? Do you notice a global demand for your product? Do you want to deal with all this on your own or hand it over?

After you've charted a course, choose your partners from e-commerce platforms, local delivery firms, international carriers, fulfillment centers, and more.
Shipping method: home delivery

Tips on How to Cut Shipping Costs

  • Reexamine your shipping strategy to make sure it's the best fit for your needs.
  • Watch out for extra fees like fuel, weekends, or weekly service surcharges.
  • Buy insurance from a third party: carriers would normally charge you up to twice as much as specialized insurance firms.
  • Watch for billing failures: up to 10% of invoices may contain errors, costing you money.
  • Explore discounts: you may find lower rates when paying online, shipping certain types of items, falling into a specific business category, or even participating in an association.
  • Negotiate with carriers: if you frequently ship, or in larger quantities, ask them to offer cheaper options.

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Package Characteristics

Whatever favorable conditions you've managed to negotiate for yourself, carriers will always take care of cutting their own costs by saving space in a truck for more profitability. The bigger the parcel, the more space it takes up, and the less capacity there is for other packages.
Unless you're using a flat-rate plan, carriers charge you based on either the actual weight or dimensional weight, which is defined by the dimensions of the product. You pay for whichever is greater.

Thus, if the box is substantially larger than necessary, you're simply transporting air at your own expense.
Package characteristics

Tips on How to Cut Shipping Rates Based on Packaging

  • Use tighter-fitting packages: smaller boxes, padded envelopes, or polybags.
  • Switch to lighter materials: adhesive tape, stuffing, etc.
  • Reuse packaging from the orders that you receive.
  • Get rid of unnecessary inserts like promotional leaflets and thank-you cards.
  • See what products are frequently ordered together: the odds are good that those are less optimized than single-item orders.
  • Fill in the recipient's address accurately; otherwise, it might lead to delivery delays and extra surcharges by the carrier.
Shipping Destination

The farther away the destination is, the more expensive and slower it is to deliver. Hence, it's crucial to have a proper grasp of where you're shipping to.
If you ship domestically, then a small local carrier might be your best bet. These carriers are often more cost-convenient and responsive than bigger ones.

Bigger carriers are better if your goods are in demand abroad. Rates, regulations, taxes, and other conditions may vary drastically even in neighboring countries, and you don't want to fall into that cross-border logistical black hole. Shipping with a large carrier will save you nerves and money.
Shipping destinations

Tips on How to Cut Shipping Rates Based on Destination

  • Identify the countries that are most profitable to deliver to. For example, it's much easier for an online store in the US to send an order to Mexico than to Myanmar.
  • Partner with smaller carriers for local orders.
  • Delegate international shipping to major companies.
  • Let your customers choose from different timeframes with reduced prices for longer waits.
Mind the Gap

There are two types of shipping costs: the estimated one, which you show to your customer prior to checkout, and your real payment afterward. As a merchant, you want to make the gap between those two as narrow as possible.

How to Decrease your Shipping Costs With Calcurates, Shipping Software?

Tips suitable for any e-commerce on Magento 2 and WooCommerce
  1. Configure the shipping options you want to display at checkout. Various shipping option types are available: Flat Rate, Table Rates, Free Shipping, In-Store Pickup, and Carriers
  2. Implement Smart Packaging or Dimensional Shipping to get more accurate shipping rates from carriers and decrease your shipping costs
  3. Target and restrict your shipping methods and rates to specific Shipping Zones or customer groups
  4. Configure and apply your own algorithms for shipping rate calculations using Table Rates or Flat Rates in combination with Shipping Rules
  5. Fine-tune conditions for your Free Shipping
  6. Configure estimated delivery dates for each of your shipping methods.
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