No, not that type of shipping. We’re talking postage.
Shipping is a big expense for every subscription box company. In fact, it’s one of the most consistently high-cost expenses, and it can be one of the hardest to move the needle on.
Because of how this can impact your bottom line over the life of your business, it’s important to look at as early as possible. Even if you’ve already launched, your company can benefit from evaluating your unique shipping patterns and requirements on a regular basis. Doing so is a key exercise for any online retailer to prevent overspending on small parcel shipping.
1. Outsourcing Fulfillment
One of the simplest ways to lower shipping costs is to work with a partner who can help. Simply put: Your company may not have the personnel, resources, buying power/volume, or the capacity to handle the fulfillment and shipment of your orders. If it is not cost-effective to do it in-house, using a third party will save your company money in the long term.
Extra perk: Some fulfillment partners may have access to more competitive shipping rates than what you currently use. Ask your fulfillment partner about their carrier options, their rates, and if you’re able to purchase postage directly through them.
2. Do the Research
If you’re looking for leverage when negotiating rates, make sure you take the time to research all the carriers you have access to for your business. Don’t assume any one is your only choice – there are many parcel consolidators and parcel delivery services that can compete with almost all large carriers.
Looking for a list, check out the consolidators who work with the USPS.
Even if you’ve already committed to a carrier, you can still discuss your shipment history and see if there’s any way you can get better rates. If you’re able to make a move to a new carrier, use that data to negotiate with a new carrier. In general, doing this analysis on your shipment patterns, zones, frequency, and more, will lead to better-informed conversations with carriers, and therefore, better pricing. Knowing your company’s needs and considering all the options is the only way to get the best shipping rates.
3. Take Advantage of USPS Cubic Pricing
One of the most cost effective forms of shipping is USPS cubic shipping. Cubic shipments are based on volume of the box, not the weight. This makes it easy to standardize and project shipping accurately month to month.
What’s more, USPS cubic shipping offers up to 20 lbs of weight per box. If your box is a heavy one, switching to cubic can immediately lower shipping rates, as the weight of the box will no longer dictate the price. To learn more about USPS cubic shipping, read this article.
4. Ship From a Central Location
Most shipping is based on zones or segments of the country — these are predefined areas, usually based on your ship FROM and ship TO zip codes. For example, sending a box from California to New York might be classified as Zone 8 through the USPS.
Tip: Use the Cratejoy Shipping Calculator to learn more about zones.
That said, if you’re able to ship centrally, you can reduce the number of distant zones by virtue of being closer to all of them. For example, taking your average zone from Zone 8 to Zone 4 through the USPS could mean saving nearly $0.95/shipment. When doing the analysis we mentioned in #2 in our list, take a look at your most common zones or ship to states. How close or far are they from you?
5. Save on Packaging
Packaging for shipments can also be a large expense, particularly for smaller companies.
One way to reduce costs is to buy boxes and packing materials in bulk. When possible, recycle boxes and packing material. Not only are you helping the environment, but also your bottom line. Make sure the box size is the correct size for your items. Using boxes that are too large can mean you are paying for extra packaging and weight unnecessarily. Packaging that is too large, or too small, can also lead to expensive damages and returns. That means you’ll need to repurchase postage.
6. Skipping the Insurance (Maybe)
Depending on the value of your subscription box, it may not be worth paying extra to insure it. If your carrier offers reliable service with few damaged or lost items, paying for the occasional damaged package might far outweigh insuring every box. Investigating your rate of returned packages can help you figure out if it is worth this extra expense.
Savings Money on Shipping with Subscription Boxes
From taking the time to analyze your shipping habits to optimizing your shipment location & packaging, there are a number of ways to lower your costs on shipping with subscription boxes. What’s more, these savings compound over time; by shaving a few dollars off this month, you position your business to save hundreds, if not thousands of dollars, over time.
This guide was collaborated on with the resident experts at Kable Packaging.