How To Ship Your Product At The Lowest Costs

Time: Nov 09,2023 Author: SFC Source: www.sendfromchina.com

Most online customers tend to receive their parcels in 3 days or less at the cost of some affordable shipping fees or even free shipping service. For online sellers who provide free shipping services or charge lower shipping fees, it is easy for their stores to have more customers. By doing so, such a group of online sellers will just take limited profit margins from their online businesses. It is the reason why you need to learn how to ship your product at the lowest cost.

In today’s e-commerce-driven world, economical shipping isn't just a nice-to-have; it's a must-have. It can make or break a deal, and sometimes, the success of your entire business hinges on it.

Read on to find out what are the factors affecting shipping costs and how to reduce your shipping costs.



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1. How to calculate shipping costs?

2. Where does Shein ship from?

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1. Factors affecting shipping cost

1.1 Shipping destination

One of the primary factors that affect shipping costs is the shipping destination.

When you're sending a package, the distance it needs to travel from the point of origin to the final destination is pivotal in determining the cost.

This is because longer distances generally require more fuel, labor, and potentially even different modes of transportation, which all contribute to the overall expense.

Additionally, international shipments usually incur extra costs due to duties, taxes, and additional handling required for crossing borders and navigating various countries' customs regulations.

Moreover, shipping to remote or less accessible locations often comes with a premium.

Carriers may charge 'extended area' or 'remote delivery' surcharges for places that are off the beaten path.

This is because additional resources are required to cover the last miles to these destinations, which might not be part of the carriers' regular routes.

Therefore, businesses must consider the end location's impact when setting shipping rates and policies to ensure that they don't erode their profit margins or surprise customers with additional fees.

1.2 Weight and size

The concept of weight and size in shipping has evolved beyond mere physical measurements to a more nuanced understanding that encompasses dimensional weight.

This shift underscores the importance of a package's volume as a cost determinant.

The actual weight reflects the package's heaviness, while dimensional weight accounts for the package's volume, which is crucial because a package takes up space in a carrier's vehicle regardless of its physical weight.

The larger the package, the more space it occupies, potentially displacing other parcels and thus, the carrier charges more, even for items that are lightweight.

1.3 Shipping speed

Shipping speed is also a significant factor affecting shipping costs.

Expedited shipping options, such as overnight or two-day delivery, command premium prices because they require the carrier to prioritize the quick handling and transport of these shipments over others.

This often involves dedicated resources, such as direct routes, extra handling, and the assurance of delivery within the promised time frame, all of which contribute to higher operational costs for the carrier.

Customers who need fast delivery are paying for convenience and guarantee that their items will arrive by the specified time, which is particularly important for time-sensitive goods.

1.4 Shipping carrier

The choice of shipping carrier is a critical factor affecting shipping costs.

Different carriers have unique pricing structures, service options, and delivery networks, all of which can influence the cost of sending a package.

Some carriers specialize in international shipping, offering competitive rates for global deliveries, while others may provide more cost-effective solutions for domestic shipments.

Moreover, each carrier might offer a range of services from standard ground shipping to expedited air freight, each with its own pricing tier.

1.5 Packaging materials

Yes, packaging material is indeed one of the factors that can significantly affect shipping costs.

The type of material used, its weight, and its dimensions can all influence the final price.

Heavier materials add to the overall weight of the package, potentially increasing the cost, especially if the shipment is charged by weight.

Bulky or non-standard packaging can also increase costs due to the increased dimensional weight, which is a pricing technique used by carriers to account for the space a package occupies.

Moreover, packaging choices can impact the need for additional handling or special accommodations during transport.

For instance, fragile items require more protective packaging, which may add to the weight and size.

Conversely, optimizing packaging by using lighter, more compact materials that still provide adequate protection can reduce both actual and dimensional weight, leading to lower shipping costs.

1.6 Shipping order volume

Shipping order volume plays a substantial role in affecting shipping costs.

Higher volumes of shipments typically enable businesses to negotiate better rates with carriers due to economies of scale.

This means the more you ship, the cheaper the rate per package can become.

Carriers are often willing to provide discounts to clients who consistently ship large quantities because it guarantees steady business for the carrier and more efficient use of their transport resources.

1.7 Insurance

Shipping insurance is indeed a factor that can affect the overall cost of shipping.

It's an added service that provides protection against the loss, theft, or damage of parcels during transit.

The cost of insurance is typically a function of the declared value of the shipped items; the higher the value, the higher the insurance premium.

For expensive or fragile goods, the cost of insurance can be a significant portion of the total shipping expense, but it can be a prudent investment to safeguard against potential financial loss.

2. The main shipping methods and their features

2.1 Ocean shipping

Speed: Slowest speed, with transit times that can extend several weeks.
Cost: More cost-effective for large volumes of goods, especially for international shipping.
Features: Dominant method for international trade; suitable for heavy and bulky items. Sea freight can include full container load (FCL) or less than container load (LCL) options, but it’s less reliable in terms of timing due to potential delays in ports.

2.2 Air shipping

Speed: Fastest mode for long-distance shipping, typically ranging from overnight to a few days.
Cost: Generally the most expensive due to the speed and the logistics involved.
Features: Ideal for high-value, low-volume, or time-sensitive shipments. Air shipping offers global reach and high security but is subject to strict regulations, especially for hazardous materials.

2.3 Rail shipping

Speed: Generally faster than sea shipping but slower than air, with moderate transit times.
Cost: More economical than air shipping, with costs often comparable to road shipping for certain distances and volumes.
Features: Particularly effective for large shipments over land, especially in regions with developed rail infrastructure. It’s more environmentally friendly than road shipping and can be combined with road freight for door-to-door delivery.

2.4 Road shipping

Speed: Flexible with relatively fast delivery, depending on the distance.
Cost: Costs can vary based on distance, shipment size, and route; generally less expensive than air.
Features: Offers extensive coverage and door-to-door delivery, making it ideal for domestic shipments. It’s versatile, with different types of trucks available to suit various needs, from small parcels to oversized loads.

3. Tips to reduce your shipping rates

3.1 Reduce package weight and dimension

Most shipping carriers charge based on either the actual weight or the dimensional weight of the package—whichever is greater.

Dimensional weight is calculated based on the package's volume—the length, width, and height.

By minimizing these dimensions, you reduce the dimensional weight, which can lower the cost if it is the higher of the two weights being considered.

Similarly, reducing the actual weight of the package will decrease costs when the pricing is weight-based.

3.2 Choose a suitable shipping method

Different shipping methods come with varying price points and service levels, so selecting the most appropriate one for your needs can lead to substantial cost savings.

For instance, if you're not under time pressure to deliver the goods, opting for standard ground shipping rather than expedited air freight can significantly cut costs.

For international shipping, choosing sea freight for non-urgent bulky items is typically more economical than air shipping.

3.3 Get discounts shipping rate

Securing discounted shipping rates is a key strategy for reducing shipping costs. Many carriers offer discounted rates to businesses based on volume or frequency of shipments.

The more you ship, the more negotiating power you have to obtain reduced rates.

For smaller businesses, joining a professional or trade association can be beneficial as they often negotiate discounted group rates with carriers on behalf of their members.

3.4 Keep in touch with your shipping carriers

Maintaining a good relationship with your shipping carriers is indeed a strategic tip for reducing shipping costs.

Regular communication with your carriers can lead to a better understanding of their service offerings, access to valuable advice on optimizing your shipping processes, and information on the latest discounts or rate changes.

Carriers value loyal customers and may offer special deals, loyalty discounts, or customized rates to businesses that consistently ship with them.

3.5 Get third-party shipping insurance

Opting for third-party shipping insurance can be a cost-saving tip compared to carrier insurance.

Third-party insurance providers often offer coverage at a lower cost than carrier-provided insurance, especially for high-value items.

This is because third-party insurers specialize in shipping insurance and typically have lower overheads and risk pools, which allows them to pass on savings to customers.

3.6 Use free packaging

Using free packaging supplied by shipping carriers is another cost-saving measure.

Many carriers offer their own range of packaging, such as boxes, envelopes, and mailers, free of charge to customers who use their shipping services.

By utilizing these materials, businesses can eliminate the immediate costs associated with purchasing packaging supplies.

This can be particularly beneficial for small businesses or startups that are looking to minimize overhead expenses.

3.7 Cooperating with a 3PL (Third-Party) fulfillment center

Cooperating with a Third-Party Logistics (3PL) provider is also an effective tip for reducing shipping costs.

3PLs can offer economies of scale, as they handle logistics operations for multiple companies, allowing them to negotiate better rates with carriers due to their higher overall shipping volume.

Additionally, they often have established networks and relationships with various carriers, which can provide more competitive pricing options.

FAQs

1. How can I estimate shipping costs before sending out my products?

To estimate shipping costs, utilize online calculators provided by carriers. Input your package's weight, dimensions, and destination to get a quote. Consider signing up for business accounts with carriers for potential discounts.

2. What's the best way to handle shipping for small, lightweight products?

For small, lightweight products, opt for mailer envelopes instead of boxes and explore first-class mail options offered by national postal services, which are often less expensive for lighter packages.

3. Is it worth it to offer free shipping to my customers?

Offering free shipping can boost sales, but it needs to be financially viable. Include shipping costs in your product price, or set a minimum purchase amount to qualify for free shipping to balance the costs.

4. How do customs duties impact international shipping costs?

Customs duties can significantly increase international shipping costs. They vary by country and product type, so pre-calculate these fees and communicate them to customers to avoid unexpected charges.

5. Can I negotiate rates with shipping carriers even if I'm a small business?

Yes, even small businesses can negotiate. While you may not have the same leverage as larger companies, you can often get better rates by committing to a certain volume of shipments or by using a single carrier for all your shipping needs.