Having ran both my own online store and also worked as an ecommerce order fulfilment manager for several years, I am only too aware of the impact shipping costs can have on profits.  Nowadays there are several choices for dispatching goods which give companies the option to negotiate the best deals and maximise revenue. Both small and large companies can benefit by regularly reviewing the costs they incur for having items shipped to clients and customers. The parcel delivery sector is fiercely competitive and this should be taken advantage of in order to keep costs down.

Here I consider how businesses can monitor and control the costs of their shipments:

Look to secure discounts

For companies who ship items in large volumes, looking to secure discounts from parcel delivery companies can lower costs significantly. Where companies are not shifting the type of volumes to warrant discounts, seeking to work with a third party in order to receive discounts could be an option.

Competitive rates

Researching and comparing the most competitive rates for parcel deliveries may seem like an obvious way to monitor and control costs, but it is not uncommon for businesses to become complacent about the rates they are being charged for shipping.

A regular review of the value a parcel delivery service is providing will help ensure that businesses are using companies with the most competitive rates.

The level of service required

Businesses need to make sure that they are using the appropriate level of service and that it is the service their customers expect. There is no need to ship items using a premium service if one that is cheaper, but takes a little longer is sufficient.

Assess inbound shipping costs

Where businesses receive a high volume of parcels, an inbound shipping policy needs to be in place. For example, if suppliers are footing the bill for items that are inbound, find out if those costs are passed on to the business and if so evaluate whether or not anything can be done to reduce the cost.

It may be the case, for instance, that businesses can have the cost of shipping removed from the cost of the items they are buying and arrange less expensive shipping themselves.

Audit shipping invoices

Making sure the business is being charged the right amount for shipping is imperative. Some experts estimate that around 10% of shipping invoices contain mistakes and that businesses are regularly overcharged for the services they use.

Monthly audits of shipping invoices will help identify any mistakes and act as evidence for a refund.

Consolidate shipping consignments

Businesses should look to consolidate shipping consignments wherever possible. It makes no sense to send several parcels if one parcel will suffice and so looking at efficiency plays a vital role in helping monitor and control shipping costs.