5 Tips for Shipping Products Cost-Effectively

by Robert Moskowitz on January 15, 2013
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“Choosing your company’s method of transportation is extremely important,” notes Inc. magazine. “The right mode of transport can lead to quick and efficient shipping and delivering, and happy customers, to boot; conversely, the wrong mode of transportation can be extremely costly and damaging.”

If your small business depends on cost-effective shipping, here are five more tips for improving delivery times and saving money.

1. Automate your systems. There’s a big advantage to entering customer and parcel information once and having it automatically appear on all of the necessary forms. Automation allows you to increase accuracy and decrease the cost of getting packages out the door. For example, some online shopping cart systems provide easy integration with FedEx or UPS, which makes it easy to print shipping labels for orders. Savings through automation can flow from many different cost streams, including reduced processing charges from shippers, lower overhead when processing orders for shipment, savings on labor, and curtailed use of shipping materials.

2. Opt for ground service. Sometimes you need to rush a package to a customer; sometimes you don’t. Knowing the difference between the two can have a big impact on your small business’s bottom line. In general, keep packages headed to short-haul destinations — within 500 or 750 miles — on the ground. Ground-delivery service to these customers often costs less and packages may even arrive sooner than shipments going by air. Experiment to figure out which delivery service you should choose in any given circumstance.

3. Beware of flat rates. Yes, you can save money shipping heavy items with a flat rate deal, but you’ll likely pay more than you need to when a parcel is relatively lightweight. “Flat rate shipping is convenient, but even the postal service points out the focus is on convenience — it may not always be the lowest price,” notes Connie Thompson of KOMO News in Seattle. A good shipping scale is vital to figuring out whether it would more efficient and cost-effective to send any given package via other means. Set up your shipping center with a postage machine, too, so that you can easily affix the correct postage vs. rely on whatever stamps you have on hand.

4. Prepare before shipping overseas. Yes, the internet allows you to reach customers worldwide. But shipping products to other countries is more complex than just sending a box to the right address. Items must meet different packaging and labeling requirements and are subject to different tax rates and insurance than domestic shipments. Shipments sometimes get held up in customs. Services such as FedEx and UPS can be faster and more reliable at getting packages through than the postal service, but not always. Your best bet may be to let the customer choose what method of shipment is right for their location — and charge accordingly. Make sure whatever options you offer allow both you and the customer to track any shipped packages.

5. Keep up with changes. Shipping is a dynamic industry. You need to regularly review and update your protocols, including preferred carriers, levels of service, and the costs you pass along to your customers. At least once a year, check your locked-in shipping preferences and choices to determine whether they’re still the smartest ones you can make. You can learn the ins and outs of cost-effective shipping by studying guides like this one, as well as by tracking your actual outbound shipments and calculating when it would be smart to spend more and when to spend less.

Robert Moskowitz is a business writer for Intuit and is passionate about solving small business problems.

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