How to keep your shipping costs low so your product is affordable
In manufacturing one of the costs that goes into your final product price is your shipping costs, even if you have your customers pay shipping separately it will still affect your profits. To ensure that your customers return to you for business you want to keep your prices as low as possible. One of the best ways to help keep your product affordable is to keep your shipping costs as low as possible.
Here are some things that you can do to help lower your shipping costs so that you can keep your product affordable.
Number one: Discounts
If you are using a retail shipping department like FedEx, UPS, or DHL, you can work with your account representative to make sure that you are getting the best discount program available. Chances are when you first signed up for shipping you were just shipping things at a flat rate, you never thought about discounted prices. The only way that you are going to get the discounted price is to ask for it, so do not be afraid to ask.
Number two: Alternative shipping options
If you think that, your cost is a bigger factor than the delivery time for your products than you do not have to choose the fastest option. You can look at other shipping options that your current carrier offers, such as slower shipping methods that cost less than priority shipping or you can even look at alternate shipping methods.
Number three: Hundredweight pricing
If you send out shipments of multiple packages to a single location you could be eligible for something called hundredweight pricing, it is also referred to as multiweight pricing. With this method of pricing, multiple packages that are being shipped to the same destination are rated as a shipment at a rate per unit weight rather than weight per package. When shipping multiple packages to the same address you want to look into both shipping prices to see which price is going to be the lowest, not all cases will result in hundredweight pricing being the low cost option.
Number four: Surcharges
Even though you might not think of them surcharges can greatly increase your shipping costs and nobody but you is going to monitor them to ensure that you are being charged the right amount. You need to keep in mind that certain surcharges are higher for residential packages and these are charged in addition to the standard residential and fuel surcharges that your carrier charges. Another thing to watch out for is address correction charges, make sure that you get the address right the first time around so that you do not have to pay additional fees, such as shipping it out again to the correct address. Try and avoid having the packages picked up for shipping because most carriers will charge you a small pick up fee. These fees can add up quickly, so drop them off at your local carrier on your lunch break or even on your way home from work.
Number five: One provider
Most of your carriers will offer you some kind of incentive if you do all of your shipping with them, or they will even offer incentives based on the volume of shipping that you do with them. These are known as threshold or earned discounts, depending on the carrier that you use. By using one shipper for all of your shipping needs you can easily qualify for these discounts in addition to base discounts and rewards to customers who meet certain shipping levels.
To make sure that you are using the right carrier for your shipping needs be sure to shop around and compare prices for your shipping needs.