You need to lower costs as much as possible in your business. You take a look at your expenses to see where you can make cuts and discover that you’re spending a lot of money on business postage services.
You might take comfort in the fact that you’re not alone. Businesses everywhere spend a lot of money on shipping and postage.
How much is spent and how can you cut costs? Keep reading to find out.
How Much Do Businesses Spend on Postage?
How much do you think businesses spend on postage each month? If you guessed more than $300 a month, you’re correct.
The average small business spends $338 a month on postage. You can assume that the larger the business, the more that’s spent on postage.
Businesses with more than 20 employees spend over $1,000 a month on postage. Most businesses are small businesses with less than 10 employees. How much do they spend on average? These businesses average $239 a month.
How to Find Cheaper Business Postage Services
Is it possible to lower your shipping and postage costs? It can be. A lot of the cost savings will depend on your business and how much you need to ship and mail items out.
Analyze Your Shipping and Postage Needs
Your first step in lowering your shipping costs is to analyze your business needs. You need to know how much you spend on postage and shipping.
You also need to know the number of orders you ship on average, where you ship to, and the average size and weight of the packages. One other thing you want to know is how you ship items, as in standard freight, ground shipping, overnight, or two-day mail.
This will give you a starting point to understand where you can begin to shop around and cut costs.
Improve Your Order Fulfillment Processes
One reason why a business spends so much on shipping is that they are slow processing orders. You can save a lot of money in this step alone.
Here’s how you could be spending much more than you need to. When an order is placed with your business, you give a customer an estimated shipping time. For this example, let’s say three days.
Your order fulfillment side of the business is slow, and they take two days to get the package ready to ship. You know that you can lose customers by delivering products late, so the order is sent via overnight mail.
Overnight mail is the most expensive method of shipping. If you were to ship via USPS, you would have to ship via Priority Express for guaranteed overnight delivery. That starts at $25.50.
Shipping the products the same day that they’re ordered can save you a lot of money. You would be able to ship via USPS Priority Mail, which starts at $7.35 and gets to customers between 1-3 days.
Take that $18.15 difference and multiply that by the number of orders. If you have 100 orders, you can save $1,815. This is just an example, but you can begin to see how your order fulfillment department can be costing you a lot in unnecessary shipping expenses.
Negotiate Shipping and Postage Costs
It is possible to negotiate shipping rates if you have a high volume of shipments that you send out regularly.
You can and should negotiate your shipping rates with UPS, FedEx, and USPS. Yes, you can negotiate with USPS.
If you have a business account and are a large-volume shipper, you are very likely to have an account manager with FedEx and UPS. You’ll want to establish a good working relationship with your account manager.
Your account manager will go to bat for you to get a discounted rate approved. This will enable you to lower your rate and your postage costs. How much depends on your individual situation and what your account manager can do for your business.
It’s a little different to work with USPS. They offer commercial shipping, but you have to meet certain thresholds to qualify. Each type of shipping (Priority Mail, Priority Express, and International Mail) have their own levels to qualify.
For example, to qualify for commercial pricing on Priority Mail, you have to send out 50,000 pieces of mail the previous four quarters. That averages out to 12,500 per quarter.
Look into LTL Shipping
Do you have a lot of volume that you need to ship, but not enough to take up an entire truckload? You could be paying a lot more than you need to.
You may be paying for an entire truckload of goods, even though you’re taking up a small portion of the truck. Freight shippers have to make money, and they count of full trucks no matter how far they travel.
Shippers have realized they can make more money and get more customers by using LT shipping. LTL means less than truckload. Freight shippers can have full truckloads and have more customers.
You can ship your goods while paying less for the truck space. Plus, you don’t have to worry about paying or space that you don’t use. You can get an LTL quote and see the difference in costs.
Save Money on Shipping and Postage
One of the necessary costs of doing business is shipping goods to your customers and mailing potential customers.
Business postage services don’t have to cost your business an arm and a leg. There are ways to lower your costs. You can look at your business needs, negotiate your rates, and look at other forms of shipping, like LTL shipping.
Another option is to shore up your business processes, which could turn into big savings for your business.
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