Shipping costs are a part of doing business, and the more successful you are the higher they can get. But in some cases, they can cause too much of a drag on the bottom line. So, what’s the answer?

There are things you can do to help rein them in – here are five quick ideas that could help.

An important factor in many carriers’ pricing is dimensional weight, which takes into account both the weight and size of the package, so make sure you’re shipping in the most appropriate sizes for your goods for maximum cost efficiency.¹

You could consider whether padded envelopes are suitable for your products, rather than boxes.² Custom-designed packaging may also be an option. It might not be viable for all businesses, but if it is – and if doing so allows you to reduce the size, weight, and the amount of void fill used to cushion and protect your goods – then it could enable more cost-effective shipping.³

Then there’s free packaging, which some carriers provide if certain criteria are met, and think too about what else goes into your packages alongside the product. Is it all needed? For example, if you’re providing instructions or other information, could you send links to digital files instead to trim the shipping weight and keep the production costs down?⁴

Encouraging your customers to buy in bulk is another good way to trim shipping costs – either by fitting more goods into the same packaging or finding other economies of scale through shipping in larger quantities. Could you offer special deals for multiple purchases or product bundles?⁵

If you do have multiple orders going to the same address, how the order is fulfilled can also have an impact on costs. Many e-commerce retailers will use split shipments, particularly if items are located in different warehouses or even different parts of the same warehouse. This means each item is dispatched separately, but if you can consolidate items into a single shipment you could save on both packaging and shipping costs.⁶

You could also consider where you could make bulk purchases yourself. Boxes, labels, tape, bubble wrap and other supplies all form part of the shipping costs, and buying these in larger quantities could lead to important savings for your business.⁷ How much? Some estimates suggest that bulk buying could result in savings of 20-80% on individual unit costs.⁸

If customers need to return products to you because they are faulty, it’s likely that you will have to cover the shipping costs,⁹ so it could pay to keep a close eye on quality levels to avoid unnecessary expense.

But businesses will often cover some or all of the cost of returns for other reasons too. After all, over half of consumers in major markets such as the UK, US, France, Spain, and Italy expect retailers to pay for online returns¹⁰ – and figures from the UK suggest 57% of consumers wouldn’t buy online if free returns weren’t available.¹¹

So, reducing the volume of returns could be an important component of cutting down your overall shipping costs. One way of doing this is to focus on the quality and accuracy of information on your website. Research shows that 36% of consumers in the UK and US returned goods because they didn’t look the same as the pictures online¹², while other research shows 56% of people returned goods because they didn’t match the description.¹³

See here for more ideas on improving online returns.

If you can streamline your shipping processes, you could speed up dispatch, increase productivity and lower the overall costs of shipping. And there are several ways you could do this, from optimising your warehouse to reducing the number of employee touchpoints.

One idea is to think about how software integration could speed up your shipping processes. This can save time by automating tasks such as label generation and address validation, as well as reducing errors and driving efficiencies in areas such as batch shipping and warehouse management.

Automating your packing process is something else you could consider, whether for the whole operation or just parts of it such as wrapping and taping. Doing so could increase speed, reduce wastage, and save money.¹⁴

See here for more tips on efficient e-commerce fulfilment.

Another way to lower your shipping expenses is to make sure that everything you do spend is necessary. For instance, are you paying for faster shipping than your customers require? There’s plenty of research showing that customers value free shipping more than fast shipping so, if you are investing in both, it may be worth considering whether speed is a necessity for your customers.¹⁵

If it is, and if you are offering free shipping, would your customers be prepared to pay for it instead? Almost half of British adults will pay for next-day delivery when shopping online¹⁶, and 56% of EU consumers will do so.¹⁷ So think about whether you could add a premium tier to your shipping options.

And if you’re charging for shipping, do your rates adequately cover your costs? Remember to factor in handling and packaging too when making your calculations.¹⁸

Unnecessary costs can also accumulate if you get key documentation wrong when shipping cross-border, whether that’s through delays at customs or even being charged incorrect duty and tax rates if you are the party responsible for paying them. So, make sure you’re on top of the requirements.

You could also consider what materials you may have that could be reused – potentially saving you money in the process. Maybe you’ve got void fill materials or bubble wrap from shipments you’ve received yourself, or even old boxes? Using these may help fulfil any commitments to sustainability as well as cutting your costs.¹⁹