Shipping is an essential function of any ecommerce business. But it can be complicated and costly if you don’t know the most effective shipping and packaging methods. If you don’t include enough packaging, your items might get damaged in the shipping process. But if you use too much, you’re likely to pay more than necessary for shipping.
Ken Chrisman, President of Product Care for Sealed Air, which is the maker of Bubble Wrap, offered some tips to help small businesses save as much money and resources as possible when it comes to shipping products.
How to Lower Small Business Shipping Costs
Understand the Pricing Structures
Different shipping companies offer different pricing structures for shipping packages. Some offer flat-rate options for boxes of a certain size. Others are more concerned with the weight. But according to Chrisman, more and more providers are offering options based on dimensional weight, which takes both the size and weight of the package into consideration.
Based on the type of items you have to ship, you’ll likely want to look for whatever type of pricing structure can save you the most money. For example, if you have relatively compact but heavy items, you might benefit from using flat-rate boxes. But you likely won’t get much benefit from going that route if you have larger products that aren’t super heavy.
Cut Down on the Packaging
Since cutting down on the size of the package you’re shipping can have a major impact on shipping rates, it makes sense to include as little in the package as possible. Since you can’t leave out the actual product, that leaves the packaging.
“The single biggest mistake that small businesses make is using too much packaging,” says Chrisman. He also said that by investing in some higher quality packaging material, you can potentially save money overall by shipping smaller packages since you won’t need to use as much.
Use the Smallest Box Possible
Chrisman also noted that it’s generally a good rule of thumb to include about a half inch of packaging for every five pounds of product, though that can vary for especially fragile or tricky items. From there, you can figure out about how big of a box or package you’ll need to ship your various products. You’ll likely want to use the smallest possible box that will fit your product and the packaging that is actually necessary.
Avoid Loose Fill
If you’ve ever gotten a box that included one small product completely surrounded by tiny packing peanuts or other shipping materials, then you’re familiar with loose fill packaging. And chances are, you’re not too big of a fan. But this type of packaging can also be a big waste of resources for small businesses, particularly those that don’t have a lot of space.
Chrisman says, “It’s expensive, it comes in huge bags that take up so much space for small businesses, it’s messy, customers hate it, and it’s just terribly inefficient.”
Choose Versatile Materials
Instead, it can be beneficial to invest in some packaging material that can be customized to different types of shipments, but doesn’t require a lot of space or create a huge mess. In fact, recently Sealed Air has been producing some newer products with this very consideration in mind.
Limit the Amount of Different Materials
Since many small businesses ship various types of products, it’s fairly likely that you’ll need to keep more than one type of shipping material on hand. But you don’t necessarily need to keep every single option around. If you choose just one or two options that are likely to work for the types of products you ship out, you can save time and money on the shipping process as a whole. And you can also potentially take advantage of bulk discounts when buying supplies, rather than just purchasing a small amount of many different supplies.
Have a System for Packaging
In addition, it can be a good idea to have a set system for packaging certain items, especially those that you ship regularly. If you designate a specific amount of materials to use with each type of product, then you won’t have to spend a lot of time trying to figure out the packaging each time around. And you’ll also already know that if you use that exact amount of packaging, your item is likely to get to its destination safely without causing you to spend too much on shipping.
Choose Just a Few Box Sizes
Just as you don’t want to keep too many different packaging supplies on hand, you also likely don’t need to buy a huge variety of boxes in different sizes. Having too many different sizes can make managing inventory difficult and also over-complicate the actual process of shipping. But if you pick just two or three different box sizes that will work with most of your products, you can save time and potentially even take advantage of bulk discounts.
As a small business, you likely don’t have the same negotiating power as large companies when it comes to getting the best possible shipping prices. However, you can still shop around with different providers and see which ones offer the best prices for the specific items you need to ship. And if you do ship items fairly regularly, you might be able to try negotiating small reductions based on the volume of items you ship regularly.
Look for New Solutions
Finally, even if you find some shipping solutions that work for your business today, that doesn’t mean you have to use those same solutions forever. Shipping and packaging solutions are constantly changing. And Chrisman says that the industry is changing in a way that could see even more potential benefits for small businesses.
Chrisman says, “These sophisticated packaging solutions are not just for big companies anymore. A lot of things have gotten simplified and shrunk down and so there are more options today for sophisticated packaging solutions that are manageable and cost effective for small businesses than ever before.”
Shipping Boxes Photo via Shutterstock
Some excellent suggestions. May I also add that a multi-carrier shipping provider will enable online retailers to access ‘pooled volume’ discounted rates from a range of carriers.