Shipping is a big expense for every subscription box company and is especially important to think about as you are first starting out.
However, even established subscription box companies can benefit from evaluating their own shipping patterns and requirements on a regular basis. It’s a key exercise for any online retailer to prevent overspending on small parcel shipping.
Do the Research
There are several carriers available to help ship your customer orders, which gives you some leverage when negotiating rates. Don’t assume any one is your only choice – there are many parcel consolidators and parcel delivery services that can complete with the USPS and other large carriers. Any established online business should discuss their shipping history with their current carrier to get better rates, or can use that data to negotiate with a new carrier. Plus, the more knowledge you have about your own shipping patterns the better pricing carriers can offer.
Keep in mind that it may be cost-effective to use two different carriers if you are shipping packages that differ in size or weight, or to several areas of the country. Knowing your company’s needs and considering all the options is the only way to get the best shipping rates.
Save on Packaging
Packaging for shipments can also be a large expense, particularly for smaller companies. One way to reduce costs is to buy boxes and packing materials in bulk. When possible, recycle boxes and packing material. Not only are you helping the environment, but also your bottom line.
Also, make sure the box size is the correct size for your items. Shipping in boxes that are too large can mean you are paying for extra shipping weight unnecessarily. Packaging that is too large, or too small, can also lead to expensive damages and returns. And unhappy customers.
Depending on the value of your subscription box, it may not be worth paying extra to insure it. If your carrier offers reliable service with few damaged or lost items, paying for the occasional damaged package might far outweigh insuring every box. Investigating your rate of returned packages can help you figure out if it is worth this extra expense.
Shipping can account for 10% or more of the operating expenses for a subscription box company. Making educated choices for how you manage shipping can often be the difference between a profit or losing money for your subscription box company.