Reducing shipping costs is one of the most effective ways to increase profit margins for e-commerce businesses. Cost-efficient shipping involves not only selecting the right carrier mix but also packaging items to reduce waste and cost. Here's a brief overview of the variables that affect shipping costs and some tips for optimizing packaging.
How are shipping costs calculated?
There are many variables involved in how you calculate shipping costs. First is the size and weight of the package. An obvious, simple rule is that the lighter the package, the cheaper it will be to ship, but if the item is oversized and requires a larger box, the cost of shipping goes up, even on a lightweight product.
Another factor is distance. How far does the package need to travel? The cost of shipping two identical items to two destinations (or countries) can be quite different. Shipping rates are calculated to include the distance of the delivery.
Ways to minimize packaging to reduce costs
Size and weight
Using the lightest and smallest possible carton for your items is always a smart move and a way to lower weight and reduce the use of fillers. Bags or padded poly mailers are both lightweight and water-resistant. They are also quicker to pack, and they cost less to ship. They even take up less room in your shipping area. If they are right for your products, you will appreciate the ease of using poly mailers and bags.
Similarly, cardboard boxes are available in a variety of sizes and thickness. If you are not dealing with fragile or breakable items, opt for the lightest, thinnest box that fits your product. This will save money not only on the box itself but on the shipping cost.
DIM- Dimension weight
To account for larger, lightweight items, shipping carriers use a concept called DIM (or Dimensional) weight. DIM weight is calculated by multiplying the length, width, and height of the package or box and then dividing by a standard divisor. With most carriers, the shipping cost charged will be the larger of the two amounts: package weight or DIM weight.
DIM weight pricing often impacts oversized or fragile items, particularly if they are packed in a large box with lots of padding or infill. It is possible to safely pack fragile items in a smaller box if you use bubble wrap or air pillows and ensure a snug fit. The smaller the box, the less likely you will have to pay a DIM weight premium.
Minimize packing materials
Minimize the packaging on your products themselves. (Avoid packing a box in a box whenever possible.) Use the smallest container you can to accommodate the purchase and try to pack multiple items headed to one destination in one container to use fewer boxes and save on shipping costs. For filler and packaging, look for lightweight protective materials. Bubble wrap and air pillows allow good protection and are easy for employees to use. They are also lighter than some other options.
Reuse and recycle
Where possible, reuse and recycle. You can strip labels from supplier boxes and reuse the boxes to ship your own items, saving money and reducing the total number of boxes used along the supply chain. Encouraging sustainable returns by having customers pack items to return in the packaging they were delivered in is also a good practice. Customers appreciate retailers who are responsible, so encourage recycling of shipping cartons and reduce waste within your own operation wherever possible.
One shipping partner for more cost-savings
One of the easiest ways to cut shipping costs is to work with one partner to streamline shipping processes. When you rely on the Seven Senders delivery platform as your one-stop solution for all shipping needs, you save costs by avoiding the inefficiencies that come with multiple contacts and contracts, as well as reducing the internal resources needed.
Connect to our delivery platform and gain access to a wide network of delivery partners and reduce costs by up to 30 percent with an optimal carrier mix.
Get in touch with us to learn more!