Thanks to the rise in E-Commerce, most companies today are shipping their products to their clients or customers more often than ever before. But this added convenience for the end user often means additional expenses for vendors, which usually are passed on to consumers in the form of higher prices or additional charges.
Yet some companies are paying too much for shipping and can easily reduce their costs by making a few simple adjustments. Overpaying for shipping causes higher delivery charges and prices, which can reduce sales as your customers look for more affordable alternatives. If you can cut your shipping costs, you could improve sales, revenues and profits.
One common problem is that shipped items are not being manifested correctly. If you are using a parcel service such as UPS or Federal Express, you typically will pay more to ship to a commercial business than you will to a residential customer. So if you don’t pay attention to how your shipment is being manifested, it could mean higher charges.
Weight vs. Dimensions
Similarly, some parcel services charge by weight while others charge by the dimensions of the package, or a combination of the two. If the delivery charge you are charging your customers is based solely on the item’s weight and your parcel service is charging you extra because of the package’s dimensions, you could be unknowingly absorbing those charges. So it’s important to understand exactly what you are being charged so that you can accurately pass along these costs where they belong.
Many businesses will automatically use one of the well-known parcel services to deliver their packages. But there are many more affordable “hybrid” companies that you can use that partner with UPS or FedEx to do the so-called “last mile” delivery. Researching your delivery options can result in substantial savings with no sacrifice in quality or timeliness in some cases.
Are You Paying Too Much?
Another common error is when merchants don’t use the right services that their carrier offers. Naturally, your parcel service is going to recommend the service that benefits them the most, but in some cases a more affordable option is just as efficient at a much lower price.
For example, if you wanted to guarantee that a package would be delivered to a location in another city within 48 hours, you probably would opt for the “two-day air” service offered by most carriers. But both UPS and FedEx already guarantee that some ground shipments will be delivered with two days, so you may be paying extra for service you already are receiving.
Billing Errors Slipping Past?
Another common mistake is not looking at invoices from the carrier service. Billing mistakes are not uncommon and you might be overcharged. But if you are simply paying the invoices without auditing them, you will never know for sure if you are getting the services you are paying for.
As more consumers are demanding businesses to deliver their products to their door, only those companies who are diligent about keeping their delivery costs as low as possible will succeed in keeping prices low and customers happy.