Small businesses in general and retailers particularly are facing shipping rate increases that can affect their bottom lines. Small Business Trends spoke with Chris Giles, Vice President of Global Product Management, at Pitney Bowes. He provided 10 ways a small business can manage the 2018 shipping rate increases.
How to Minimize Shipping Rate Increases
Know your Shipping Department
“Having complete visibility of their shipping spend is a reference point they need to have,” Giles said, adding this is often easier in a smaller business since there’s a more compact scale. He says if you don’t know the people who ship your goods, get acquainted.
“Then it’s about understanding how all those charges are made up,” Giles said.
Understand Dimensional Weight
It’s important to understand that for many carriers dimensions can override weight when it comes to cost. For example, something might weigh only one pound but get shipped in a box big enough for it to cost the same as a five pound parcel.
Knowing the effects of dimensions on a parcel is an important part of keeping the cost down. This dimensional override can affect the price you pay.
Get The Address Right
Getting the address wrong adds extra charges to the rate increases already scheduled. Even small errors like referencing a street address as a lane makes a difference of anywhere from $10 to$15 if the carrier needs to correct your oversight.
It doesn’t take a lot of time to double check where your package is going to before you send it off.
Understand the Differences Between Residential and Commercial Fees
“Carriers will put a surcharge on a residential address, whereas the USPS doesn’t,” Giles says. If you have a choice between the two for any package, the U.S. Postal Service is the cheaper choice.
Look for Full Tracking
While this might not help you save money in the charges you pay for shipping something, it provides a transparency your clients will enjoy. That can mean repeat business offsetting higher costs.
For example, when clients sign up for USPS services, the company will tell them when there’s an inbound package so they can track it.
Look At Other Options
“If your package is only going a short distance, first class will get there just as quickly as priority mail,” Giles says, adding that priority mail can be as much as three times more expensive.
Taking the time to ask about options available for the distances your package needs to travel can help you to save.
You might not be able to cut costs at every turn, but USPS’s innovations in operational efficiency can definitely help. For example, your clients get a text message when a USPS carrier delivers something to their mailboxes.
It’s another way making informed choices can lead to more business to offset higher costs.
Sometimes more traditional methods can help you save on shipping costs. Shopping your needs from carrier to carrier online is fast and efficient.
Train Your Shippers
In these days of part time employees and contract workers, it’s easy to wind up with people on your docks who aren’t familiar with the best shipping methods.
“You need mechanisms in place or you need to train your operators on how you need to be shipping items,” Giles says. “Simple example. I have a rule that says if it’s under 5 pounds ship it USPS.”
Look for Good Software
The best for shippers looking to get the big picture so they can save is SaaS software. It’s easily deployed and allows you to stick to your budget for every transaction to control cost.
Photo via Shutterstock
Always track the expenses and set a team to take care of lowering the costs for shipping.
Use an auditing and contract negotiation service like ParcelAuditPartners.com to work with you. 10% – 15% savings are pretty routine.