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Keeping Shipping Costs Low for International Fulfillment

E-commerce has helped level the playing field for small businesses, and the ability to ship globally grants yet another advantage. Business to consumer e-commerce sales exploded to over 1.2 trillion dollars in recent years and continues to expand. While many business owners may be intimidated by the complexities of international fulfillment, the obstacles are not insurmountable.

One common obstacle involves the cost of shipping for international sales. Here’s how to send your e-commerce items around the globe and still improve your bottom line.

Research Your Options

Many retailers get rates from major shipping contractors like UPS and USPS and assume the large carriers are their only options. A wide range of regional and international carriers are available for air and ground transport. Businesses often benefit from using different carriers for domestic and international deliveries. Save time and find out all your options by using each carrier’s online shipping calculators.

Negotiate with Suppliers

Negotiating freight contracts takes time, but it pays off when you know you got the best possible rates. These factors affect your freight contract.

  • What you’re shipping – Freight that is easily damaged, involves hazardous materials or has to be refrigerated costs more to ship.
  • How often you’re shipping – If you ship a small amount every day, it will cost more than a weekly bulk transport.
  • How much tonnage you need delivered – Supply carriers with annual amounts and seasonal averages.
  • What you currently pay – Carriers will often reduce rates to convince you to switch from your current provider.
  • Your payment history – Show invoices that prove prompt payment for services to negotiate their deepest discounts.

Once you’ve collected data on your current practices and future needs, send a Request for Quotation (RFQ) to the carriers you are considering. Review proposals from multiple carriers to
find which one offers the best services and rates. Often, you can use proposals to negotiate even greater discounts.

Understand Shipping Insurance

Most of the major shipping companies are reliable, but any time you ship an item, there is risk. Very few shipments are automatically covered against breakage, theft or loss. USPS and FedEx
cover domestic packages against loss or damage for up to $100, but that doesn’t cover
international fulfillment.

Whether or not you should buy insurance depends on the value of the package and how you feel about having to replace it if something goes wrong during transit. If your item is inexpensive, it may cost less to replace it than to insure it. If you sign up for shipping insurance, read the fine print to make sure your item is covered.

UPS, FedEx and USPS all exclude coverage on items like coins and precious stones. Some carriers only insure delivery to certain destinations. FedEx limits the value it will reimburse on items like artwork and antiques.

Carriers also might not reimburse an insured parcel if they deem it improperly packaged. Review carrier packaging requirements to make sure you’re not paying for shipping insurance that won’t do you any good.

Third-party insurers often charge less than carriers for shipping insurance. Shop around to find options that save money on every shipment.

Reduce Packaging Costs

International carriers charge for a package’s dimensional weight. Calculate dimensional weight by measuring package length, width and height, multiplying the dimensions together and dividing by 139 for international shipments.

Reduce fees by using the least amount of packaging possible. Opt for light weight packing material and choose the smallest boxes that will safely accommodate your items.

Buy packaging materials online in bulk to save money on supplies. When you purchase all the tape, boxes, bubble wrap and labels you need at once, you reduce the cost per item. Find what you need for less at online providers like Value Mailers, Uline, and eSupplyStore.

The USPS Postal Store offers free flat rate Priority Mail boxes. They also offer labels, stamps, scales and more.

Small businesses can even save by recycling packaging materials. When you receive boxes without logos or boxes filled with bubble wrap or packaging peanuts, reuse them when you send packages abroad.

Communicate with Customers

Customers expect low-cost shipping, but they also recognize seller costs increase when items travel to a different continent. Be transparent about your shipping policies and allow customers to choose from a range of options. If fast delivery is important, customers may have to pay for the privilege. Offer low-cost shipping for those who are willing to wait a few days for delivery so shipping costs don’t deter them from making a purchase.

Audit Shipping Invoices

Don’t assume your carrier delivers a correct invoice every time. Carefully review every invoice and address issues as soon as they occur. If you find yourself regularly having to contact your carrier, you may be able to negotiate an additional discount to reimburse you for your time.

FirstMile helps businesses cut costs on shipping and international fulfillment with shipping to over 220 countries. Contact us to find out more.

Sources:
https://www.statista.com/markets/413/e-commerce/

https://www.huffingtonpost.com/entry/7-ways- e-commerce- companies-can- reduce-their-shipping_us_58d338f9e4b099c777b9def6
https://www.shopify.com/blog/60645957-everything- you-ever- wanted-to- know-about- third-party-warehousing- and-fulfillment
http://www.bankrate.com/finance/insurance/shipping-insurance.aspx
https://www.thebalance.com/tips-for- negotiating-freight- contracts-1361581