Trimming Your Shipping Expenses
Shipping expenses are an unavoidable cost of doing business for most companies, and they can take up an especially large share of operating costs for companies that have to ship large quantities of products, especially heavy items, over longer distances. But even companies that primarily mail documents and smaller items can find that their shipping and postage costs add up to a considerable sum. Thus, reducing the amount spent on shipping alone can have a positive impact on the bottom line of almost any business.
If you are currently mailing and shipping without tracking the costs, try to find out exactly how much you are spending not just on payments to shipping companies, but also on staff time and packaging. Start by looking at each step in the shipping process and the costs that accrue along the way. For example, how much does your firm spend on boxes, tape, labels, and other packaging materials? How much time do you or your employees spend packing items and preparing them for shipment? How much space on your premises is used for shipping activities? Do you accrue any additional costs in taking the packages to the post office or shipping facility, or does your company pay to have shipments picked up? Could some of the documents your business currently mails be transmitted less expensively by fax or e-mail?
Simply by looking at each of these shipping-related activities, you may find ways to cut costs or make the process more efficient. If you are not doing so already, consider buying all of your packaging materials in bulk, and try to negotiate deals directly with suppliers rather than going through retailers. Make sure your employees know when packages should go out by overnight delivery and when slower forms of delivery would suffice.
Reviewing your shipping practices and relationships with carriers is especially important now as high fuel prices and labor costs are leading many carriers -- including the United States Postal Service -- to raise their rates. Examine the different pricing schemes of competing vendors to determine which one best meets the needs of your business. Watch out for hidden costs that could drive up the price of using a particular carrier over time. It is, of course, essential to research each carrier’s reputation for reliability and customer service, and to find out what recourse is available to you if packages fail to arrive within the promised time. Find out what discounts are available and how your company can best take advantage of these deals.
If you are currently using a postage meter or filling out each mailing order manually, consider moving your shipping online. The U.S. Postal Service and the other major carriers offer customers web-based tools that allow them to manage their shipping needs from their office PCs. For example, the Stamps.com website of the U.S. Postal Service allows customers to pay for and print postage stickers, print mailing labels from their own address books, and, in some cases, arrange for pickup of packages. These websites also make it easy to track shipments and notify customers of the status of their orders and when they can expect their packages to arrive.
As your business grows, you may find that your firm’s shipping needs are changing. If your company is shipping a lot of products, think about hiring a vendor capable of managing large volumes. These specialists can usually offer economies of scale that would not otherwise be available to a smaller business, such as freight consolidation and charter cargo services. When you add up all the costs associated with preparing shipments and ensuring they are delivered safely and on time, you may find that outsourcing your shipping and handling needs will save your company money, while freeing up more of your time for managing other aspects of the business.
