David Seidman
David Seidman

Eight Ways to Save Money on Mail and Shipping

Advice to shave your costs on packaging, delivery rates, and more

Are you spending a lot on mail and other types of shipping? You don’t have to.

Everyone who sends mail or packages knows that its costs can kill. In 2019, the logistics industry’s 23rd Annual Third-Party Logistics Study found that shipping and related costs eat up 11% of sales revenue. And the trend is rising. “Experts estimate that these costs will comprise upwards of 15-20% of your total net sales,” says Will Schneider, founder of the B2B service network InsightQuote.

How can you beat the system and keep more money in your pocket?

1. Use smaller packages

”Shipping a cushion will cost more than shipping a 20-[pound] dumbbell,” says the business-service firm SFWP. Why? Because the cushion’s bigger.

Blogger Najam Ahmed of another service firm, Cloudways, explains: “Some companies charge more depending upon the size of the box. If the item is lightweight, there’s no reason to pack it in a big box. Use smaller ones, and you can save a significant amount.”

2. Keep the weight down

While a package’s size affects shipping costs more than weight does, the weight still matters – even with small items. “If your designer suggests very heavy stock for a mailing, get a sample of the paper and envelope you’d mail and weigh it and find out what it will cost to mail the piece. If the weight of the document increases postage, ask the designer to choose a lighter-weight alternative,” says Janet Attard, founder and CEO of the business-advice site Business Know-How.

3. Ship locally

Long-distance shipping can cost more than a short hop. “To cut shipping costs, you can always reduce the distance of the delivery,” says Matt Ellis of the sales-processing company Ecomdash.

What if you absolutely have to ship a product to customers far from your office? You may need pick-pack-and-ship facilities near the customers. If you’re like most small businesses and you don’t have warehouses all over the country, you can try a fulfillment or logistics company. (See section 7 below.)

4. Use the carrier’s packages

You can get free envelopes and shipping boxes from the FedEx, UPS, and other carriers. “There are many reports from e-commerce businesses claiming that using the boxes provided by shipping companies have helped them save 60% of their packaging amount,” says SFWP.

5. Choose the right cushioning material

Bubble wrap, air pillows, and packing peanuts are among the most lightweight forms of package cushioning. But they can be bulky, forcing you to use bigger boxes and driving up your costs. Paper is less bulky, but it’s heavier than the other fillers. Consider factors like these when you choose your cushioning.

But don’t go too cheap. Take bubble wrap: You might want to skimp on it, since its bulk can make your parcels costlier to ship; but it’s one of the best materials for protecting glass and other fragile items. Spending more on the right cushioning can keep breakables from shattering in transit and forcing you to pay refunds or send replacements.

6. Negotiate your rates

“Many small businesses fail to realise that they have a bit of wiggle room when negotiating the price,” says Cloudways.

Carriers are most willing to negotiate discounts with customers who ship a high volume of packages. “If you’re moving more than 100 orders per month, a carrier will be willing to negotiate better pricing to keep your business,” says The Fulfillment Lab, a software and marketing company for shippers. “Contact the various carriers and ask about the required quantities for them to offer lower rates.” Pro tip: The more carriers you contact, the better your bargaining position.

7. Have your customers pay for shipping

Buyers expect free shipping. That’s the conclusion of surveys from mailing specialist Pitney Bowes, research firm Digital Commerce 360, and the National Retail Foundation, an industry group. Buyers want free shipping so much that they’ll pay for it – if it’s part of your product prices.

As a result, you can “shift the [shipping] cost to customers,” says Paul Birkhead, CEO of the e-commerce tech company Eniture. “The strategy enables you to offer ‘free’ shipping while recovering the costs of it in the amount paid for the order.”

8. Consider a logistics or fulfillment company

Logistics and fulfillment firms store your products in their warehouses, then ship the products to your customers as orders come in. These companies ship so many packages from so many clients that they can negotiate bigger discounts from carriers than you could on your own.

To choose a logistics or fulfillment house, look for

  • Pricing. Fulfillment and logistics firms offer so many bundles of services that costs can get confusing. Look for transparent price structures with no hidden costs.

  • Technology. For a company to fulfill your customers’ orders quickly and accurately, it must be able to handle immense amounts of complex data with perfect efficiency. And its systems should integrate smoothly with yours.

  • Scalability. Your company may take more orders at particular holidays or seasons, or your company may grow year after year. Can your service provider keep up?

  • Locations. When customers order a product, they want to receive it fast. It will probably arrive fastest from a storage facility in their city or state. Look for fulfillment and logistics houses with as many locations as possible.

  • Clients like you. You’ll need a service provider with experience satisfying companies like yours. If a fulfillment or logistics house serves your competitors and other firms in your industry, it probably knows how to make you a satisfied customer.

9. Save money on incoming mail

All of the advice so far has focused on outbound mail and packages, but inbound mail has costs of its own. But you can cut those costs.

When mail and packages arrive at your office:

  1. Someone has to be there to sign for them.

  2. All items, even those that don’t require a signature, need someone to sort through them, open them, route them, and file them.

  3. Someone may also have to copy them, distribute the copies, and handle related chores.

  4. In addition to these labor costs, you also pay equipment costs. Good file cabinets, copy machines, and other equipment are expensive.

  5. So are the rent for the space that they fill, the electricity to keep machines on all day, the ink and paper for copying, and so on.

A fast, easy way to shrink these costs is a digital mailroom. Exela’s Digital Mailroom, for instance, accepts your correspondence and other incoming documents, digitises them into files that are searchable and shareable, and uploads them to a secure web portal.

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Whether your costs come mostly from receiving mail or sending it, you can save quite a bit of cash. If you’d like to know more about saving on incoming mail, just visit us here.

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