Considering a lot of expenses involved in running a business, it is important for importers and business owners to constantly look for ways to cut operating costs and save more in order to keep the business running profitably.
One of many ways to save money for importers is to employ hacks that reduce shipping cost. This is because shipping is one of the processes that consumes a lot of expenses.
When it comes to shipping, there are a few things to consider. These factors determine how much you spend on shipping your products from China.
They are:
- Weight of goods
- Delivery speed
- Shipping insurance for high-value goods such as industrial chemicals, pharmaceuticals etc.
- Dimensional weight of your goods
Here’s how to make smart shipping choices and save more money while you ship your goods.
1. Remove unneccesary packaging
The number one factor that affects costs of shipping is the packaging that comes with goods ordinarily. Using shoe products as an example, shoes from suppliers come in their own packaging. When your goods are taken to your logistics agent, they will also package it for safety and this becomes double packaging and indeed adds more weight to the goods itself. So the first thing to do is to remove all unnecessary packaging. The lesser the packaging, the lesser the weight.
2. Use Less-Than-Truck Shipping
Less-than-truck shipping popularly known as LTL is a strategy to reduce your shipping rate because it allows you to consolidate your shipment with other importers’ goods. Shipping with the LTL option saves you costs and helps you with flexible shipping options especially when you are a constant shipper.
3. Factor in shipping cost on your product pricing
When you are deciding on the price of your product, one way to be cost effective is to calculate total shipping cost and spread it on the number of products shipped. For instance, if a product costs N10 and you bought 200 pieces of it and it also costs you N500 to ship all 200 pieces, it is safe to calculate your selling price as: cost +profit margin+overhead shipping cost. In this case, N10(cost price)+ N3 (profit) + (500 divided by 200 pieces of product=N2.5K). This means that you will be selling your product to customers for N15.5 Kobo.
4. Use an independent shipping agent/company
One mistake many importers make is to use suppliers for the shipping of their goods. Bear in mind that suppliers may not have in-depth knowledge and analysis of shipment. Also, they often package goods with unnecessary packaging that may increase shipping cost. The best thing to do is to have your suppliers send to a third party shipping company and not rely on the supplier to ship for you.
5. Watch your dimensional weight
Applying dimensional weight to shipments is fairly new for carriers, and many importers don’t know about this. Years ago, shippers noticed they were losing money on large– yet light – items. These large items took up a lot of space on their shipping trucks, but brought them little money. So, they’ve begun applying this “theoretical” weight to packages based on how much volume the package occupies. This means that the final weight is measured based on the space it occupies in their trucks. So they charge based on the actual weight of the package or the “dimensional weight.”
If your packages tend to weigh less than the dimensional weight, the cheapest way to ship oversized packages will most likely be to find a carrier that doesn’t follow this practice.
6. Use a reputable & considerable shipping company
Not all shipping companies are considerate to business owners. This is where Naiyuan Mart is different because they are always helping business owners make smart shipping choices. They also have customized shipping solutions for business owners who may not want the general shipping solution. When you use a reputable and considerate shipping company like Naiyuan Mart, you can be sure you’d get effective shipping solutions needed for your business.
