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Reduce Shipping Costs

Top 5 Effective Ways to Reduce Shipping Costs

Shipping cost is one of the crucial aspects of the growth of a D2C brand. However, with the growing demand for online products, shipping costs have risen exponentially in recent years. Nevertheless, for an online business, higher shipping cost results in a downgraded shopping experience and eventually loss of customers. With the significant rise in D2C demand over the past few years, brands need to modify their shipping charges based on warehouse space availability and travel distance.

For D2C businesses, understanding how they can reduce shipping costs has become as crucial as delivering the product to the end customer. Moreover, eCommerce giants such as Amazon have made the shipping market more competitive, providing free shipping almost anywhere in the country. Therefore, an essential tool in your toolbox to increase your profits is low transportation expenses.

Unfortunately, it is far simpler to say than to accomplish. Since the shipping cost vividly depends on various parameters such as pick up and delivery locations, accessibility to the delivery address, and of course, the courier partner.

So how can brands reduce the shipping cost? Let’s have a look:

How to Calculate Shipping Costs? 

Let’s look at aspects that affect how much a brand spends on shipping products to customers.

There are numerous factors to consider, including package size, weight, destination, value, and shipment type. The following are some factors brands should consider as they prepare to ship.

Dimensions of the Package

Dimensional weight, also known as DIM weight, is a unique pricing method all leading carriers use to determine the shipping costs for each shipment. This method considers a package’s size when calculating how much it will cost to send. The package’s length, width, and height are multiplied, and the result is divided by a typical DIM divisor to determine the shipping charges.

Package Weight

The weight of your cargo affects the shipping cost using this variable. The carrier will use this value to determine your shipping expenses if it exceeds the DIM weight. The cost of shipping a product increases with its weight.

Shipment Location

The package’s destination also affects how much carriers charge to send it. The computation is done by figuring out the recipient’s location and the pickup location for the shipment. These areas are referred to as zones. You can anticipate paying more depending upon the shipping zone.

Price of Packaged Goods 

The worth of the contents of your delivery also significantly impacts the shipping cost when using eCommerce. Brands will always need to insure the parcels if they are shipping high-value goods, which raises the shipping cost. 

Delivery times and unforeseen issues are other aspects that affect how much it costs to ship products.

Effective Strategies to Reduce Shipping Costs 

Here are the top 5 effective ways to reduce shipping costs:

Reduce Shipping Distance

Many firms must pay expensive transportation costs when they deliver goods to distant locations. For domestic shipments in India, every carrier sets its shipping zones that range from one place to another. A business must research different courier services and choose the one best suited for your business.  

The higher the zone, the slower and more expensive the shipping, and the farther away the shipping destination. Over time, brands can save tons of money by eliminating shipments to inaccessible zones and getting access to superior shipping alternatives at lower costs.

Minimize the Size of Packages by Weighing Them

If a brand does not use flat shipping, shipping bigger packages cost a lot. Consider purchasing a postage scale if you print your labels and ship from home to more accurately estimate expenses and choose the appropriate shipping labels. When determining delivery prices, carriers also consider the package’s dimensions.

Brands will overpay if they use a massive box for a lightweight item because of the package’s extra room. Larger boxes may result in greater dimensional weight, raising the delivery cost.

Try the following to reduce package weight (and hence delivery costs):

  • To reduce the dimensional weight of the container while maintaining the appropriate fit for your goods, create custom packaging (i.e., make it a more snug fit as opposed to having items rattling around in a box, which leads to you essentially paying for air in the box).
  • Use packaging that “ships in its own container” (SIOC), which means you don’t place a box on top of another box; instead, you add a shipping label to your product packing.

Avoid sending packages by air unless it is essential. 

Look for Discounted Rates 

All shipping firms offer volume-based pricing discounts; you don’t have to ship millions of packages each month to qualify. It’s not harmful to try to bargain volume savings in exchange for sticking with one shipping company. Naturally, brands can get better rates the more packages they ship.

Owners of D2C brands should look for ways to reduce shipping costs, provided that doing so does not compromise the shipping options or increase delivery times.

Use Prepaid Payments 

Brands should purchase a set number of mailing labels in advance for prepaid shipping. This can help them in saving up to 20% on delivery. Before sending out each order, brands can wait to attach them to a package. This saves money and time in addition to costs.

Note: To ensure correct shipping charges, the prepaid model only functions when the brand constantly ships packages with the same weight and dimensions or when this information is known in advance.

Obtain Third-party Insurance

Cutting unnecessary services, such as insurance provided by shipping companies, is one approach to reducing shipping prices. This depends on the value of the item brands are delivering. Third-party package insurers are typically less expensive than the shipping carrier if brands require shipping insurance for the orders — in some situations, the cost is practically halved. Naturally, high-value items are where this applies the most.

Why Choose Pickrr?

Pickrr is a SaaS-based logistics solution provider that uses AI and ML technologies to give a seamless shipping experience to its customers. Here is why Pickrr is beneficial for eCommerce businesses:

  • A strong network of 29000+ postal codes 
  • Competitive shipping prices 
  • Pickrr reduces RTO by up to 50%, allowing you to get more value out of every cargo.
  • NDR performance and assistance
  • You can link 30+ popular eCommerce systems and marketplaces with a single click.
  • Pickrr’s AI and machine learning models look at 50+ variables to identify cost-effective couriers.
  • Comprehensive courier performance reports
  • Regular updates of the order journey via SMS, email, and WhatsApp
  • Shipment cost calculator
  • Seamless customer support

Conclusion 

Many business owners stay worried about how to lower shipping costs. Above are several strategies that enable the brands to focus on business expansion while reducing shipping costs by a sizable amount. Brands must ultimately strike a balance and choose the most effective for their business. Moreover, the brands must be aware that shipping costs are subject to change, so they occasionally need to update your estimation.

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