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Shipping costs: How to reduce it and increase profit for your Shopify store

Shipping costs: How to reduce it and increase profit for your Shopify store

E commerce is great for selling globally. However, when it comes to shipping, it’s a great factor to consider. Shop owners must consider shipping costs priorly to ensure their income and keep their business running. 

Thus, we will show you some tips to reduce the shipping costs to increase profit for your Shopify store

shipping costs

Accompany with multiple companies

Why you have to stick with only one suppliers? Instead, working with many companies is a great way to find best products at the best price

For example, you might find the same product on both Amazon and AliExpress. Then, you must consider both product and shipping price. If the product is OK, but the shipping costs aren’t, then why don’t you choose the better deal. This will help you save a lot of money over time

Maintain strong relationship with shipping company

When it comes to business, every relationship matters, from customers to suppliers. Without suppliers, you won’t have anything to sell. But how communication with suppliers help you with shipping costs?

First, if you gain trust from suppliers, they will be more open to you. Then, they will help you find some ways to optimize your shipping fee, for example, minimizing packaging. 

In this COVID-19 pandemic, great relationship can benefit you more than you expect. First, you might not meet too much challenges when buying and shipping products. Secondly, if you can’t afford to pay the suppliers at the moment, you’ll be allowed to pay in account. 

As mentioned above, maintaining strong relationship is very important. You don’t need to do something too big. Just simply keep in touch with them, ask them how they’re doing and if there’s anything you can help.

Maintaining good relationship with shipping company is vital

Negotiating price

If you and suppliers have good relationship, you can negotiate the shipping costs with them. Each company has its own shipping fees and schedule. But if you ship very often with big volume, you can ask them to lower the rates. 

shipping costs
You should negotiating shipping costs

Understand your shipping options

Nowadays, you have many shipping options. Below are 4 popular ones

  • USPS and other national carriers
  • ePacket shipping
  • AliExpress Standard Shipping
  • Free on Board (FOB) shipping
USPS and other national carriers

USPS, China Post or Royal Mail are available options for dropshippers. Each one has its own price, schedule as well as tracking. For instance, China Post might take 20 to 50 days to ship worldwide, while USPS only takes to 15 days, but is limited to the U.S. Then, depending on your needs and expectation, you can choose the right one for your business. 

Looking at each cost might be daunting and intimidating at first. However, if you want to lower your cost, this is an effective way

ePacket Shipping

ePacket shipping is available in more than 40 countries for products coming from China and Hong Kong. It often takes from 2 weeks to a month to complete the delivery, and not very affordable either. However, if you’re looking for a reliable shipping option with built-in tracking, ePacket Shipping is a great option.

AliExpress Standard Shipping

If you use dropshipping from AliExpress, you will be able to use its shipping option. AliExpress offers you low-cost, or even free shipping fees. Your packages will be delivered within 15 to 45 days.

Free on Board (FOB) shipping

With FOB shipping, sellers will record the sale the moment goods leave their stocks, and customers will record the purchase after receiving. Customer can ask sellers to ship product to a specific destination. If there’s any problem, buyers will be responsible. 

With this method, buyers will incur the shipping costs, and therefore save sellers some money. But there’re also some cost-saving benefits here. You can choose the location or warehouse which have the lowest price.

Target affordable shipping countries

Selling globally is great, but when it comes to shipping costs, there will be some challenges. Besides high shipping cost, you need to consider regulations of each countries before selling. 

Now let’s compare shipping cost to U.S.A and Canada

shipping costs
Shipping costs to U.S.A
shipping costs
Shipping costs to Canada

As you can see, the shipping costs for U.S.A is cheaper than those for Canada. Then, to save some cost, you should target locations where it’s cheaper to ship to

For instance, in the case above, you’re about to run a marketing campaign. Then, you’d better focus on the U.S.A rather than Canada since you don’t want to spend money on countries you don’t want to pay the shipping fee to.

What if you still want to ship products to countries where the shipping costs are high? Then, you have to do research to see which shipping options is best for you. Remember to work with multiple carriers, not only one.

Custom shipping zone

One great way to reduce shipping costs is using custom shipping shipping zone. Set up the shipping price of each location, and then adjust customer’s shipping cost depending on their locations.

For example, you can offer customers free shipping to places where the shipping costs are affordable. Then, charge buyers a little more fee for other places

One thing to keep in mind is letting customers know free shipping is only available for specific area priorly. If customer find out the shipping costs when checking out, they might easily abandon their cart.

You can add the countries you want in free shipping zone in Shopify in your Shipping settings page. Then the cost will automatically be adjusted according to the products’ destination.

Minimizing packaging

The shipping costs are based on the volume and weight of package. Then, to reduce the shipping fees, you can reduce the size of packaging. You want the package as small as possible. Furthermore, some sellers even offer free packaging, or free box to customers. This will not only help them reduce the cost of packaging, but shipping fees as well. If you often ship in bulk, this method can help you save up to 20 percent.

Minimizing packaging can save you lots

Third party insurance

Third parties will charge you less to insure your shipment. For example, merchants will have to pay carriers about $0.90 for every $100 of good insured. On the other hand, you’ll only pay third-party firms about $0.55 for the same amount of good insured.

Raise product price

Nowadays, customer often expect low, or even free shipping when buying online. Thus, you can charge customers a little higher cost products while lowering the shipping costs. Just remember raise the price just enough, not too much. Otherwise, products’ prices will scare customers away.

Try longer shipping option

You get what you pay. If you want fast delivery globally, high-cost is inevitable. However, in this COVID-19 pandemic, it’s best to save as much money as possible. Moreover, customers might be willing to wait for a couple of weeks  more. Than, you can choose lower shipping costs to reduce the cost. Just notify customers the expectation date of delivery after they order. 

If you estimate the products will be delivered within 15 to 25 days, tell customers it’ll be 20 to 25 days. This will prevent disappointment from customers if there’s any delay. And even if their orders come early, who will complain for early delivery?

Shipping costs are the key factors, especially for online shop. Now you might know some way to reduce shipping fees and increase your profit. If you want to further boost your revenue, you need to contact ArrowHitech.

Established since 2007, ArrowHitech is the leading outsourcing IT company in Vietnam. Having 12+ years in e commerce, our company promise to deliver you the best service, from giving advice to your online business plan to developing Shopify themes and apps. Our developers will integrate suitable apps to help you reduce shipping cost by choosing the most affordable carriers. You’ll get your dream website and higher profit. Contact us here or via email: support@arrowhitech.com or hotline +84 243 7955 813

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