Five Tips for Online Retailers to Save on Shipping Costs

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Five Tips for Online Retailers to Save on Shipping Costs

Rising shipping costs are causing headaches for many online retailers. The shipping costs will quickly eat up your return if you're not careful. So that you, as an online retailer, can keep your costs under control, we give you five tips for saving on shipping costs.

1. Save on packaging material

The following applies to packaging material: as little as possible, as much as necessary. You should not save in the wrong place, especially when it comes to sensitive and fragile goods.

The fact that transport companies are anything but gentle with parcels is well known. As a rule of thumb, the package must withstand a 1.5-meter drop.

Therefore, a sturdy box, good adhesive tape on all sides, and inner packaging tailored to the product are mandatory for safe shipping.

By the way: If a package is damaged in transit, a possible insurance claim will be rejected if the inner or outer packaging is insufficient.

Nevertheless, you can save money on packaging material with a few simple tips:

a. Reuse boxes and filling material that you, e.g., B. about goods receipts or returns. However, only use boxes that are in good condition.

It is crucial to remember to remove or cover any old shipping labels from the box. Otherwise, there may be problems with the automatic package scanning during the shipping process.

b. Buy wholesale packaging and wholesale packaging material from specialized dealers to benefit from volume discounts. Also, consider merging with other retailers when ordering to get better prices for your packaging material.

2. Check the dimensions of your parcels

To save costs when shipping online, every retailer should look at their parcels.

Do you use one or a few standard packages for all products? What are the dimensions of these packages?

Every centimeter can make a difference in the shipping rate, often graded according to size categories—the smaller the dimensions, the cheaper the shipping.

Therefore, pack as compactly as possible and choose the smallest possible package size for each shipment.

You get cheaper shipping rates, but you also save on packaging material for the inner and outer packaging. And that also benefits the environment!

3. Choose the cheapest parcel service for each shipment

Where you can save valuable centimeters by choosing the correct box size, there is usually not much to do with the weight of the load since the importance of the goods mainly determines this.

It is more important to know which parcel service is cheapest and when. Because depending on the combination of dimensions and weight, the choice of shipping partner can make a big difference in the shipping price.

Are you sending a small but heavy package?

Here, the shipping service provider DPD offers very cheap rates, and as a professional shipper, you can usually get additional discounts.

On the other hand, with GLS, you can send light and large packages, even up to 2 meters in length, remarkably cheaply.

With other shipping service providers such as UPS or TNT, you also consider the volumetric weight.

Depending on the shipping order, the higher the accurate and volumetric weight is used to calculate the shipping rate.

Depending on the shipment, one or the other parcel service can be cheaper. To get a clear view of the whole shipping price jungle, you can use comparison platforms for shipping.

Here you will receive an overview of the prices of the various transport companies for each of your shipments and can see at a glance which one is the cheapest for sending your package.

Suppose you can flexibly access different shipping partners depending on the shipment and are not tied to one or two service providers. In that case, you can save significantly on shipping costs depending on the shipping order.

4. Negotiate cheap shipping rates with the parcel service providers

Those who send parcels regularly do not have to be satisfied with the public rates for parcel services but can negotiate their rates.

All major shipping service providers offer special shipping rates for online retailers and business customers, some of which are well below the usual prices.

If you want to increase your returns in online trading, you have a strong lever with the shipping costs.

But how do I get to the big shipping service providers such as DPD, DHL, GLS, UPS, etc., to get cheap shipping prices for my online shop?

In principle, you can submit an inquiry to any shipping service provider. They will make you an offer based on the data on your parcels, the place of departure and destination (national or international), and, in particular, your expected monthly shipping volume.

Which provider offers you the best conditions will depend entirely on your case.

The following always applies: the larger your shipment volume, the better tariffs you get. However, this also means that you usually have to commit to one or two shipping partners to achieve the required monthly shipment volume.

If the volume is not reached, you could face penalties, completely throwing your shipping cost calculation overboard.

5. Use the shipping rates of a shipping service provider

For some online retailers, shipping brokers or Shipping Service Providers (SSP) can be a good solution.

Instead of negotiating with the transport companies yourself, you directly access the shipping rates that the SSP has dealt with the companies as a merchant.

So you don't have to sign your contracts, and you can use the parcel services of all major shipping service providers.

It is particularly advantageous for retailers whose monthly shipping volume is too small or too uncertain to enforce good conditions with the service providers themselves.

Thanks to the combined bargaining power of an SSP, even small traders can benefit from reasonable tariffs.

The SSP model is also attractive for retailers who occasionally need international shipping or special services such as pallet shipping. Since these services are usually expensive, the savings potential is exceptionally high.