3 Ways to Save on Shipping Costs
This guest blog was written by a representative from 71lbs.
While Bonanza sellers are compiling their own holiday shopping lists, they’re also in the middle of the busiest shipping season of the year. This is when extra focus is placed on meeting customer expectations and preventing shipping costs from eroding your bottom line.
The latter is often on sellers’ minds, and for good reason. Shipping costs account for a significant amount of business expenses. In fact, a whopping 10% of revenue goes toward shipping for the average business – and Bonanza sellers are no different.
In addition, both FedEx and UPS are imposing their annual rate increases over the next three weeks. A couple of dates worth knowing:
December 24, 2018
UPS rates on U.S. Ground, Air Shipments and International Services will increase an average of 4.9%.
January 7, 2019
FedEx customers will see a 4.9% increase on Freight, Home Delivery, Ground and Express services.
These new rates mean sellers are faced with the challenge of whether to absorb the increase or find other ways to address this impact on their business. So, how can you offset the extra expense?
Buy Packing Products in Bulk
If you have a sense of anticipated inventory, you likely know your packing needs. While it requires more money upfront, buying your packing products in bulk typically reduces the cost per unit. Having a larger supply on hand also means consistency in quality, whereas smaller orders can run the risk of a change in the overall product. (Bonus: Larger orders mean fewer shipments, a small—but helpful!—step in reducing your carbon footprint.)
If your vendor offers discounts for bulk orders and you have the space needed to store the supplies, this may be an option to consider.
Stay Informed of Upcoming Rate Changes
FedEx and UPS typically impose rate increases on an annual basis, but other factors may result in unexpected increases. It’s important to stay up-to-date on any shipping-related news that can affect your cost—increases in gas prices and more can play a role in how your shipping cost is calculated. Parcel Industry and Logistics Management are both great resources to stay informed of upcoming changes that can affect your shipments.
Know Your Shipping Spend (and Get Your Due Refunds)
Did you know that if you ship an order and it arrives late, you’re entitled to a full shipping cost refund from the carrier? Late deliveries happen every day, and most sellers don’t have the time to check each individual shipment for their due refunds.
Shipping auditing companies like 71lbs can automatically check for late shipments, process claims and fight for you to get your due refunds (here’s how it works). The right solution should include a robust analytics dashboard that provides a clear, easy-to-understand view into how you ship today. Combined with a shipping advocate team, you can glean insights on how even small changes can optimize your shipping spend.
The right auditing solution shouldn’t require a lengthy process to get started or an upfront cost. The idea is to save time and money, not the other way around.
Thinking ahead
Rate increases aren’t the easiest on your bottom line, but these tips and more can help minimize the negative effect they have on your business. This season, make smart shipping choices that can help your shipping costs around the holidays and beyond.
This guest blog was written by a representative from 71lbs.<< Back
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22 responses to 3 Ways to Save on Shipping Costs
How has this blog saved me money on shipping? Everybody’s always taking money from the shipping I charge to actually ship something. It only costs the buyer more money not me. For some reason Bonanza & eBay wants a cut of the shipping like they did something for that money!
Hi backshop,
Thanks for your response! We know that there’s simply no way to avoid paying for shipping – other than hand-delivering an order, which costs time and is only possible for local orders. However, there are ways to minimize what you do spend on shipping costs, and this informational blog shares some of those ways.
Now, let’s talk Bonanza shipping fees!
Many marketplaces charge final value fees for the full price of an order – including shipping costs. Bonanza allows for a $10 shipping cost that is not subject to fees.
There is a small fee charged when you purchase shipping labels through Bonanza on a per-order basis. This fee is strictly to cover the credit card fees incurred by paying for orders as they come in. We do not keep this fee, but use it to pay for those credit card fees. If you’d like to avoid those fees, we offer a pre-paid shipping fund, where you can load money in bulk and avoid multiple credit card fees.
In terms of the shipping label cost itself, the rates offered on Bonanza are up to 15% below retail USPS pricing.
I hope this provides some clarity! Thanks for choosing Bonanza.
Thanks,
BonanzaGrace
P.S. your Beagle is very cute!
@backshop… unlike eBay & Etsy… Bonanza ONLY charges the fee on shipping that EXCEEDS $10.00 … All prices below are based on the Final Offer Value (FOV). FOV is the amount that the buyer paid to you for the item sold, plus any portion of the shipping fee that exceeds $10. For example, if your product sold for $15 and you charged $12 for shipping, your Final Value Fee (FVF) charge would be calculated based on an FOV of $17 (that’s $15 for the item, plus $2 for the portion of shipping fee that exceeded $10).
ALSO: offer a COMBINED SHIP / MULTI-ITEM DISCOUNT… all items in one box = savings for YOU and your CUSTOMER.
I think docking a shipping company for a late package is petty and is no different than a Buyer getting your item free because he complains. Sellers of all people should be tolerant of shipping times. Keep in mind part of the raises in shipping costs is to cover those who get free shipping by hollering my Pizza was late by one minute! So we all pay more.
Of course, on the other hand, why a company would make such a poor business decision as to offer money back unless it is Express Mail that one buys at a significant rate increase just to make sure the item is delivered on time, is backwards.
Thanks for your response, hulaboybooks!
We agree that being understanding toward shipping carriers when possible is a great move – benefit of the doubt is one of our core values! However, in certain situations where the fault of the late package lies with the carrier, it can beneficial for merchants to have the option of being reimbursed as well. This helps small businesses meet their bottom line by having the option of a shipping refund, as some companies can’t afford to absorb the cost of shipping if the buyer requests a shipping refund.
We doubt that most people would request a refund for every shipment, but it’s nice that the option to do so exists for situations when it matters.
Thanks for being part of the Bonanza Community :)
BonanzaGrace
@ooak. I did not know that about the $10 shipping threshold. Thanks for the info. It’s pretty reasonable when compared to eBay charging +10% commission fee on shipping.
Just buy your shipping at Pirate Ship. Deepest commercial rates for first class & priority mail. No fees for credit card use or monthly fees. Biggest advantage – cubic shipping for small, heavy packages. eBay doesn’t offer it, does Bonanza? It’d still be cheaper anyway because no credit card fees.
Thanks for the tips and information
It’s very helpfull to me
Very interesting. I think Seller should hold Shipping companies responsible for not meeting the deadline. Especially when you’re a seller like myself that loses so much money because some mail never makes it to my customers and I have to pay for shipping again and remake the product.
Definitely in bulk on padded envelopes. For the first time in a long time, I need to replenish mine. I went to Walmart and could not believe the prices they charge now for them. Buying those online is the best way to go on those I think….unless someone knows where I can go and get them for a better deal. I do not have a Sam’s membership since they kept changing up their inventory on food all the time.
Walmart does have good prices on the boxes they carry in their stores. I usually only need their first 3 sized boxes. I did get a great deal on some 6 × 6 × 8 boxes from Staples a week back at .50 cents each since they were on sale. I grabbed every single one of them up. So Walmart and Staples are good on their prices when walking in the store for boxes. We are just more limited on size availability there though but I pretty much only need the sizes they carry.
With Staples though, you have to buy more than one to see the better deal….unless they’ve got them on sale like the other day.
Having the right size boxes a person needs, can make it or break it on the cost of shipping. Sometimes just those few extra ounces will tip it over into the extra pound on priority shipping.
I buy my white poly bags off of the internet (luckily they are still cheap) and get the white lingerie boxes from the Dollar Tree and ship pantyhose in them if I sell more than one pair at a time. Otherwise, I just put cushion around one single package of pantyhose and in a poly bag…this strategy also does good with socks, etc. However, some sensitive items I always ship in a lingerie box and in a poly bag regardless. The Dollar Tree sells 3 lingerie boxes in one package for a dollar. Walmart may be cheaper but it is not all year round and the Dollar Tree is….when shopping offline of course.
USPS Zone Based Pricing still going into effect next year? This is not a small increase! Definitely going to take a bite out profits when offering Free Shipping and having to ship to far away zones. Simply raising prices to cover shipping to far away zones may put a damper on same zone sales and could cause sellers to go back to calculated shipping. And of course sellers from China, that pay next to nothing for shipping, could severely impact same item sellers here in the US when ship time is not a concern.
I just HOPE that Bonz is working on USPS Calc for ZONED Based First Class Pricing solution.
Empress, I sometimes find deals on Bulk Padded Envelopes at local Flea Markets in my area. It is hit and miss though.
Thanks for sharing your article, these are the best share for a new salesman on bonanza like me.
Thank you
Thank you
Flat rate padded envelopes and boxes are free and fairly inexpensive shipping rates, and you can order at USPS.com.
I buy a 25 pack of 10.5″×16″ poly padded envelopes on Amazon for $13, 200 of the 8.5×11″ for about $35. I buy my labels on Amazon too, 200 sheets (400 labels) for $15. Years ago, I used to go through 10 rolls of packing tape a month because I printed on paper and taped it to the box, but now maybe a roll every month.
If you ship less than 50 packages a month, use Paypal shipping or the Bonanza shipping. It saves you $$$. If you ship more than 50 packages/month, may want to check out stamps.com or ship station for shipping because it can save you even more.
Also re-use and recycle EVERYTHING. I have 3 boxes in my office, 1 is small bubble wrap, 1 is big bubble wrap, and 1 is air pillows. I never have to buy them because I keep all of them from everything I get delivered to me.
I also keep a flat stack of boxes in the bottom of the closet that I have hoarded from early store trips. I just walk by the cart of empty boxes and grab what I want. Easy to find plenty of boxes with little to no markings on them.
Also, I cannot stress enough… charge a small handling fee to cover the amount of your supplies. Most of my single item orders ship for 2.66 or 2.73, but I charge 2.95. This covers the envelope and label.
Shipping bigger items is the killer for sellers. I routinely sell motorcycle seats and the size are usually oversize charges. The last one I sold it cost $60 shipping at UPS. That price definitely is too much for a seller to absorb.
I, too, re-use ALL of my boxes and wrapping materials (bubble wrap, air pillows, bubble envelopes, etc). The ONLY thing I have to purchase about once or twice/year is packing peanuts, which I buy in HUGE bulk at a local Mail Chute mailing station. I buy a 6×3′ bag for $48. I also add a little to each shipping cost to cover mailing supplies. IF I have an item paid for outside of PayPal, I still use PayPal to do the label at www.paypal.com/shipnow. A lot of people don’t realize that you can do this! Whenever I had Amazon as a payment method, I always used PP for doing up my label, where you can still get a discount on shipping costs! I also have an account w/usps, but I no longer use it for labels since they don’t have all classes of shipping that I need. Besides, there is NO discount – it’s like taking your item to the p.o. and buying the label there! I pay enough for shipping as it is and prefer looking for a discount anywhere I can find it. The only thing I go to usps.com for now is for buying supplies or filing a claim! I NEVER use ups or fed-x for shipping since the rates are SO much higher! I’ve even sold and mailed milk cans and shipped thru usps and saved a ton of money! Customer got free shipping, so I had to ship the cheapest way possible although making sure it was safe too. The info on Pirate ship will be helpful in the future, so thanks for that info.
Thanks for the information.
I am in a conundrum now anyways. I advertise media mail shipping, but usually use first class mail since it is faster and typically costs less than the $2.95 I charge for shipping most items.
Media mail is only going up to $2.75 for 1 pound through my shipping service. Just about anything I would ship by first class mail will cost $3.18 or more.
So I have to figure out if I want to attempt the batch editor to increase my shipping cost like most sellers in my market are doing, use the batch editor to add a first class option for $4 and priority for $8, or do I want to leave it the same and have longer transit times?
As a note, it is very hard to tell there are other options available to a customer on Bonanza other than the lowest price one. It is not visible on the site until you get to the shopping cart, where It is a dropdown menu which is easy to miss.
I like so much
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