9 actionable tips for D2C brands to reduce shipping costs

Posted on April 16th, 2021
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9 actionable tips for D2C brands to reduce shipping costs

In today's dynamic e-commerce industry, more companies are entering the market than ever before, making cost management much more important. To fight cost inflation, you might be searching for ways to cut unnecessary costs while maintaining the company's reputation. One of the most successful ways to increase your profit margins is to reduce shipping costs for your e-commerce shop.

According to statistics, about 73 per cent of online shoppers expect their orders to arrive quickly and at a reasonable cost. It's tempting to give your customers the cheapest shipping rates available, but doing so might impact your profit margin. As a result, being able to reduce the shipping costs is more significant.

To support you along the way, here are 9 tips to lower shipping costs for your business:

  1. Reduce the weight of the package

You won't be able to reduce the weight of your items, but you will be able to reduce the weight of your packaging and infill.

  • When possible, use a bag instead of a box. Tyvek or plastic shipping bags may be used to easily ship most types of clothing.

  • Boxes made of corrugated cardboard are present in a range of thicknesses. Use the lightest box possible to secure your goods during transit.

  • Make sure the box matches the product. Ship in a box that's not much larger than the order's stuff. This cuts down the amount of infill that needs to be added to the package.

  • Reduce your infill's weight. Whenever possible, use air-filled pillows. To find the lightest alternative, conduct some trial runs and compare the weight of a standard order with various types of infill.

  • Reduce the amount of packaging you use for your items. Your product packaging is an integral part of your branding. It also makes the goods heavier. Look for unique ways to express your brand without adding a lot of weight or bulk to your orders.

Small changes in packaging materials can add up to significant cost savings in shipping over time. You'll save money on packaging and infill as an added bonus.

  1. Reduce the shipping distance

Moving your goods closer to your customers reduces shipping costs and delivery time. Shipping zones decide how much it costs to move something. The zones approximately correspond to the distance between the package's starting point and its final destination. Shipping a package to Zone 2 is less expensive than shipping it to Zone 8.

Working with an e-commerce fulfilment company with several warehouses will help you reduce your shipping zones. The closest a warehouse is to a client, the lower your delivery costs would be.

  1. Select the most appropriate mode of transportation

This will vary depending on the type of goods and services you're transporting as well as the distance travelled, but it's crucial to know which option is the most cost-effective. Shipping by sea is often less expensive than shipping by air, particularly when shipping internationally. Rail is normally less expensive than trucking when shipping closer to home. Knowing the cost of transportation will assist you in determining the best option for your business based on budget and deadline.

  1. Take a hybrid mode of transport

If required, you can combine modes of transportation. Combinations of air, sea, and land transportation are shown to reduce travel time while also lowering costs. If air shipping is too expensive for you, and you're concerned about the time it will take for inventory to travel by sea, a hybrid transportation plan could be the best option.

  1. Make certain you're aware of the costs of global outsourcing

If you're importing goods or services from another country, you may have to pay tariffs, brokerage, and other fees. What was once the cheapest alternative is now costing you more in shipping. Purchasing inventory closer to home may be a more cost-effective option for your company.

  1. Automate as much as possible

Certain processes and procedures, such as those at border crossings, may be automated to minimise or eliminate mistakes, paperwork, and delays. You'll save money and time by doing so, as well as reduce the chance of lost inventory or invoice errors. Manually completing required tasks will consume a lot of time and resources.

  1. Recognize the costs of express shipping.

If you have late shipments as a result of a problem or mistake, the company would most likely ship the inventory express or priority. Instead of shipping all goods as high-cost express or priority, you can save money by deciding the inventory is needed right away and sending the rest using a regular shipment form.

  1. The visibility of the supply chain

Understanding each phase of your transportation chain, from supplier to consumer, will aid you in identifying inefficiencies and reducing unnecessary costs. You'll also be able to react to issues more easily as they arise, which will save you time and money in the long run.

  1. Logistics

Using a third-party logistics firm ensures that the shipping processes and trends are thoroughly studied and that you get the best supply chain management possible. This will help you save money and time in the long run. Furthermore, the information gained by using a third-party logistics provider will assist you in better planning your company's economic future.

Conclusion

The degree to which you reduce expenses is one of the most important factors that determine the success of your D2C Company. Shipping costs will rapidly rise if they are not closely controlled. And, by the end of the fiscal year, you'll notice that they've taken a significant bite out of your profit margin.

Choosing the most cost-effective mode of transportation for your business and inventory, consolidating multiple vendors, automating certain processes, enhancing supply chain visibility, studying outsourcing costs and tariffs, and adding appropriate insurance are all ways to reduce shipping costs.

Category:
Best Practices

Posted on:
April 16th, 2021