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Small Business Shipping Guide & How to Reduce Your Costs

Small business shipping is often one of the most critical yet problematic areas for first-time owners, particularly in the realm of eCommerce, but it doesn’t have to be!

Building a company from scratch can be an incredibly honourable and gratifying endeavour, but it isn’t without hard work. 

You have to consider several moving parts simultaneously, such as innovating product development, coordinating orders and, of course, all of the accrued expenses associated with every step of the transaction, including the cost of shipping, all while driving your bottom line.

The final piece of the puzzle, small business shipping, is not without its challenges, most of which involve your valuable time and money.

But what are these obstacles, specifically, and how do you reduce your shipping costs overall?

Today, we’ll be outlining 5 essential factors to consider for small business shipping, how to minimize the expenses associated with it, and how Cantec Couriers could be your saving grace for your small business shipping needs.

5 Things to Consider for Small Business Shipping

small business shipping guide

We live in an era of instant gratification where customers not only appreciate having options for various shipping services but have grown to expect it, all while anticipating that they’ll receive the best shipping deal for the best possible price.

If they don’t get that with you, they’ll find a company where they will.

This competitiveness within the eCommerce shipping market is why companies have no other option than to pivot to offer free shipping, same-day shipping, or other discounts to maintain a leg up on other businesses. 

However, these shipping costs can pile up fast.

Companies that wish to provide small business shipping solutions, exclusive shipping rates or unique shipping tools must dedicate more resources to take advantage of this customer market. 

However, these consumers not only want to save on shipping, but they also want flexibility. International shipping or having the ability to schedule pickups at other locations through flex delivery are such options. 

In most cases, it’s not as simple as coordinating all of these elements in one place or in-house. 

There’s also the handling of third-party logistics in the form of manufacturers, couriers and more.

With this in mind, below, we’ll highlight 5 crucial elements to consider for small business shipping.

Order Volume

The amount of orders a small business executes monthly has a substantial impact when determining the best, most cost-effective shipping solutions.

In other words, small businesses that are just getting off the ground with eCommerce sales will likely utilize a different shipping strategy than larger conglomerates such as Amazon, Walmart or other big-box retailers.

Businesses with larger order volumes will likely be better positioned to negotiate for cheaper costs or potentially even a flat rate. 

Your smaller business may also benefit from shipping service solutions such as packaging and delivery discounts from third-party companies, including fulfillment providers or courier services. On the other hand, your small business might suffer from dead stock if you anticipate large order volumes but end up having fewer sales.

Fostering these third-party relationships can be one of the best strategies for growing your business, scaling, and executing your eCommerce orders reliably and efficiently.

However, depending on the specific shipping service your small business provides, additional shipping fees may also reduce order volume since higher delivery surcharges may deter consumers by asking them to pay too much.

Packaging

what is dunnage

On top of the costs associated with your supply chain, you also want to ensure that the packages arrive damage-free. 

In other words, the packaging itself comes as an additional fee to add to your overall cost of shipping.

The price itself will vary based on the specific materials, also known as dunnage, you use to protect your goods. 

When it comes to maintaining high customer satisfaction with a low rate of returns, one of the very first considerations when it comes to shipping solutions should occur when initially packaging your products.

As we said, how you package particular items will vary. 

For example, the dunnage used for packaging clothing will be far different than if you were packing up delicate, fragile items such as electronics or glass. 

The former would require something less heavy-duty, such as tissue paper, whereas more fragile items require something more defensive and cushioning, like solid plastics or bubble wrap.

On top of preserving the items, packaging also plays a substantial role in broadcasting your individual branding. 

Businesses may wish to create personalized shipping labels to communicate their small business’ message and values.

That said, creating these shipping labels will also add to potential shipping costs.

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Package Dimensions & Weight

The heavier the item, the more expensive it will be to ship. This is another crucial consideration when small businesses develop their shipping strategy. 

With this in mind, it’s important to consider the dimensional weight (DIM) of your products. 

Instead of the total weight of the package, dimensional weight is based on the package size. 

Carrier services such as FedEx, USPS, UPS and Canada Post determine their fees based on dimension weight.

In other words, you’ll be charged more for larger parcels even if they’re lighter than smaller, heavier packages.

More specifically, larger boxes have a larger DIM weight, which will result in more expensive shipping costs. 

So, if you’re able, it’s more advantageous to opt for smaller boxes so long as the products remain secure and less susceptible to becoming damaged.

Speed & Destination

last mile delivery

Most customers want to receive their shipments as soon as possible, sometimes as immediate as the same day, making fast shipping one of the most advantageous features a company can offer.

Thanks to the innovation and development of industry goliaths, such as Amazon, most customers expect to have the best, fastest shipping solutions and an extensive number of shipping options. 

The more expedited the shipping service, the higher the shipping rate will be, which, for a smaller business, could pose some severe obstacles.

When it comes to determining shipping rates, most customers expect free shipping and, if they don’t get it from you, they’ll take their business to someone else who supplies those offers.

Ultimately, both of these elements will come at your business’s expense. 

To what degree is dependent on the specific circumstances, additional features such as tracking, insurance etc. and how far the parcel has to go to reach its final destination.

Suppose you were to utilize a larger carrier company such as UPS, Canada Post, DHL, or FedEx. 

In that case, they typically base their fees on the distance between various established ‘zones.’ Finding zones unique to your fulfillment centre to each parcel’s final destination may be challenging.

These considerations are where last-mile delivery comes into play. 

Last-mile delivery is typically the most complex, time-consuming and expensive portion of the supply chain. 

However, it’s also one of the most critical because it’s the final stage before your customer receives their delivery.

Several things can go wrong within this ‘last-mile,’ with delivery inefficiencies and shipping costs being the two most prevalent. 

Considering the various things that could go wrong, businesses tend to invest a fair amount of resources to ensure that their deliveries get to consumers as quickly and efficiently as possible.

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Services

As we mentioned above, additional services can also cost a pretty penny when calculating shipping costs.

For instance, many customers want to have the peace of mind that their packages are on track and on time. 

One of the most effective methods for building a meaningful and trusting relationship with your customers would be to integrate features such as tracking into your shipping policy.

Tracking is also a valuable asset for small businesses to maintain a competitive edge.

Like tracking, many customers may also wish to opt-in on insurance to feel more comfortable that their items, particularly luxury packages that comprise electronics or other high-value products, are safe and protected. 

Insurance also makes users feel more secure should their packages experience any sort of damage or become lost in transit.

However, there is no universal price. The cost of insurance depends on the cost of the specific item(s).  

In some instances, it may be in the best interest of small businesses to purchase insurance if a delivery’s final destination is deemed unsafe or insecure.

Depending on the third-party courier, the policies surrounding what qualifies for coverage and how much will vary. In some instances, items over a certain value will require companies to pay separately to insure them.

How to Reduce Shipping Expenses

small business shipping expenses

Now that we’ve covered all of the different variables to consider when calculating various shipping expenses, your head may be spinning by just how much you may be required to spend. Of course, finding the cheapest shipping solution is ideal to ensure you save on costs while also generating revenue.

However, with small businesses, in particular, these rates are subject to change depending on the specific items, their packaging requirements and how far they have to go. In this case, you should actively seek out couriers that provide favourable shipping services for small businesses while still reliably and consistently delivering packages on time.

Below, we’ll outline some effective ways you can reduce shipping costs for your small business.

Negotiate Rates

You can likely negotiate specialty rates surrounding shipping costs for your small business for large and regular-sized orders.

Particularly if you have high shipping volumes, which demonstrate a demand for your business and products, couriers will likely be more inclined to work with you. In this way, consider working with them to negotiate a lower rate.

On the other hand, if your order volume is lower such that you can’t take advantage of many benefits, you may be able to leverage various discounts and special offers that couriers provide to growing small businesses or those just starting out.

Choose Affordable Dunnage

To reiterate, dunnage is a term used to describe the various packaging materials that businesses may utilize to protect their items while in transit. 

Depending on the specific package in question, these costs can add up relatively quickly.

It might make sense to forego additional features such as branded shipping labels if you don’t have the necessary funds to accommodate them.

It may also be beneficial to buy various dunnage materials, such as bubble wrap, packing paper, etc. in bulk to foot a larger cost upfront but save money in the future.

Outsource Shipping

Another example of a cost-cutting method for small businesses is outsourcing order fulfillment to third-party companies with more extensive knowledge surrounding the various intricacies of the logistics world.

In other words, this process involves establishing relationships and engaging with third-party companies to help handle the shipping logistics on behalf of your small business.

Depending on the extent of this relationship, you could also utilize third-party businesses to store inventory, package orders and prepare them to be shipped.

How Cantec Couriers Can Help with Your Small Business Shipment Needs

All of the information we’ve mentioned throughout this article can seem daunting at first glance, but it doesn’t have to be!

Cantec Couriers allows you to scale your business, offer the best shipping services through features such as expedited deliveries, and maintain high customer satisfaction levels, all without breaking your budget to have your business strike out on the path to success.

On top of supplying affordable same-day delivery, Cantec Couriers will collaborate with you and your business to establish a competitive advantage, generate more customers and unlock new methods to drive profits.

We pride ourselves on having the most transparent pricing model possible. 

At Cantec Couriers, we don’t believe in hidden service fees and delivery charges. 

Our itemized billing structure lets you know exactly how much you owe and lets you pay as you go.

Cantec Couriers utilizes technology to create seamless integration across multiple CMS and eCommerce platforms through an easy-to-use and navigate dashboard.

Supply the Best Shipping Options for Your Small Business with Cantec Couriers

Setting up a small business is difficult in itself. That said, executing fulfillment orders, manufacturing, packaging and delivery is something else entirely!

On top of the upfront costs associated with every step of the sales transaction process, it can be difficult for small business owners to understand the logistics and determine whether they’re genuinely getting the best deal from third-party companies.

That said, building your knowledge surrounding these various entities and how all the moving parts come together is crucial for promoting the best scenarios for the future growth of your business. 

However, you don’t have to go it alone!

Cantec Couriers will help you break through the complicated logistical jargon and work alongside you and your business to ensure that you are on the right track to success. 

If you’re interested in learning more, sign up with Cantec Couriers today!

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