First Person: How I Cut Shipping Costs for My Online Business

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When I lived in the Midwest I had the good fortune to live near the manufacturing center for a company that sells several very popular clothing lines. At the end of each season they sold their surplus to a discount store for pennies. Consumers could pick up outfits that sold for hundreds of dollars retail for a few dollars. I saw this as an opportunity to make some income on the side and set up an online clothing store. By selling the items for less than half the retail price, I made a decent income. My customers were very happy to buy designer label clothing at bargain rates. My biggest challenge was shipping the items.

Every Dollar Counts in Low Volume Sales

My small business did not generate enough sales to warrant shipping by the pallet or hiring a logistics manager. I still had to set some policies in place so that I did not lose precious dollars in shipping costs. Neither did I want to scare customers away by charging them too much.

I Contacted My Local Shipping Companies

I lived in a rural area so there were only three shipping companies that offered service, including the post office. I talked to services reps at all of them to find out what they could do for a small business owner like me. I compared their rates for shipping via ground and air. I looked at their normal shipping routes and considered the fees for deliveries to addresses off the "beaten" track.

Policies That Helped Reduce Costs

After talking to the shipping companies I learned I could establish policies that would make it easier to market to my customers. For example, I offered free shipping for items under a certain weight. I chose a standard shipping time of 5 business days at a reduced rate. They had an option to pay higher fees for "express delivery." I also invested in a portable postage meter that helped me assess accurate weights and shipping fees.

I Chose My Local Post Office

In the end, I chose to use my local post office to ship to my customers. The rates were very reasonable. For certain items I could get flat rate fee that could not be matched by the other two shippers. The best part was the service I received. In the past I had no choice but to spend gas money and time taking my packages to a shipping outlet. The post office delivered mail to my house daily, and they were willing to take the items to be shipped back to the terminal. I set the packages that needed pickup in the same spot on my front porch so the mail handler knew where to look.

The local postal worker received recognition for an increase in sales. I was able to pass more savings to my customers and I made more money on each sale.

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