Postage and shipping costs are going nowhere but up; they continue to rise on a regular basis. While the incremental increases may not seem like a lot, for small business owners who do a substantial amount of mailing or shipping, the costs can be significant.
Whether you send mail through the U.S. Postal Service or packages via UPS or FedEx, there are a few things you can do to reduce shipping costs.
Bulk Mail
Do you take advantage of bulk mail? Mailing out invoices, business correspondence, payments, and other documents may be cheaper if you use bulk mail. Bulk mail reduces the cost per piece for mailing.
Overnight Mail
Many business owners send packages overnight more to impress the recipient than because the piece needs to get there overnight. Unless it is really a must to have your package delivered in one day, use Priority Mail at the post office. It will still make an impact on the recipient in terms of professionalism, but costs only a bit more than regular parcel rates depending on the destination.
Prepaid Shipping
If you regularly send packages out via UPS or FedEx that are consistent in weight, prepaid shipping can save your company up to 20 percent. Essentially, you purchase shipping labels in bulk upfront instead of paying for packages each time they are sent out. If you frequently send the same weight package to a vendor, supplier, or other branch of your business and can determine the cost of shipping, this could save you money.
Stock Up
Buy a scale, and keep various stamp denominations on hand. Envelopes with certain dimensions cost more to ship than regular size envelopes. If you only keep 46-cent stamps on hand, you will be spending more than necessary if a package requires more postage and you have to use another stamp of the same denomination. A scale will make allow you to know exactly how much postage a package or envelope requires, and you won’t overspend.
Learn to Negotiate
Negotiate rates with several carriers. You don’t have to be the head of a large corporation to enjoy savings on shipping. Small companies that ship a substantial number of packages on a regular basis can enjoy having carriers vie for their business. For instance, if UPS knows FedEx is in competition for your business, they may negotiate a lower rate. Generally, the more packages you ship, the lower rate per piece.
Parcel Auditing Services
Many business owners don’t realize that carriers such as UPS and FedEx may owe them money – sometime substantial money – from late deliveries. Both FedEx and UPS offer money-back guarantees on late deliveries, but they do not automatically process these refunds. This can result in over-paying in shipping costs by 2 percent to 8 percent. These refunds are “on request only,” so the onus is on the business owner to track, find and process money-back guarantee refunds from late shipping deliveries. Some companies offer free online parcel auditing services that will automatically find and process the refunds for you, and they typically only charge a contingency percentage of the money recovered on your behalf.
Third-Party Insurance Providers
Some of your packages are valuable enough that you will want to insure them. Consider using a third party when buying insurance for these expensive items. You can save you up to 35 cents per $100 of insurance over the popular carriers, who typically charge approximately 80 cents on every $100 of insurance.
These are just a few suggestions that will help you save on shipping costs. You may also want to consider using a regional carrier if one is available in your area. In addition, having suppliers use your shipping account number may not only result in reduced rates, but prevent those who ship to you from “adding a little extra” to shipping costs in order to pad their own profits.
By thinking smart and being on top of shipping costs, you can save a bundle. You may also want to consider having a parcel auditing company review your shipping costs to reveal where and how you reduce shipping costs.
