Running your own online retail business involves regularly sending out a lot of parcels. With web-based sellers managing shipping and postage costs on tight margins, even a small price increase by carriers can affect business profits noticeably. Beyond asking them nicely, there’s not a lot you can do to stop Royal Mail and other providers increasing their rates. However, you can make savings in other ways – without your customers losing out in the bargain. Here are 3 smart ways to reduce parcel costs when selling online.
To Be Frank, Frank
It all began with a man named…Engle. 130 years ago Norwegian inventor Engle Frankmussler came up with a way to stop thieves stealing adhesive stamps from envelopes. The first franking machines used a piece of metal, a manual crank and printing dye to print stamps directly onto a mail item, stamping out the stamp-stealing in no time. Franking machines are somewhat more sophisticated digital devices these days – but the basic idea is the same. While today’s online sellers don’t worry about stamp thieves, they do worry about postage costs – but with the discounted rate offered to users of franking machines, businesses can make significant savings.
Franking machines are not only for big businesses with large daily mail requirements. There’s a model for every size of business, with basic low volume models costing surprisingly little and quickly paying for themselves. Simple to use, franking machines can be topped up with credit any time. All you need to remember is to update your machine when postal rates go up. Those who don’t want to buy one unproven can lease a franking machine instead with a service contract included.
Whether you buy or lease a franking machine, you’ll soon notice the considerable savings you make over using regular stamps. For example, a franked 2nd Class Small Parcel costs just £2.50 to send while a franked 1st Class Small Parcel costs £2.90 – a saving of 30p on both over the cost of using stamps. On a medium-sized parcel you can save even more – £1.40 per delivery for 1st Class and £1.35 for 2nd Class Parcels weighing between 1-2kg. Although that may not sound like a fortune, sending just 10 of each per week will lead to savings of £110 a month or £1,320 per year – with more savings on other types of delivery to follow.
If you’re not suitably impressed yet, you can also use a franking machine to add your company logo, your website address or even the details of a seasonal promotion to every mail item you send out. That’s unbeatable advertising at a tiny cost and will ensure your brand is instantly recognised by customers as soon as they receive your delivery.
Franking machines are ideal for online sellers sending out a large number of small and medium-sized parcels. Those who need to send out weightier items may also want to look into using a discount courier service. These companies bulk-buy postage space from large carriers like UPS and DHL and then sell it on to the general public at a significantly reduced rate. Increased competition among discount carriers has helped to bring down prices substantially in recent years. Savings that were previously applied only to big corporations can now be enjoyed by online retailers and other small businesses.
While you probably can’t beat Royal Mail’s rates for deliveries of less than 2kg, you’ll probably save on anything weighing above that by shopping around for a reliable and cost-effective courier service. It’s probably advisable not to go for the cheapest service without first checking online reviews and recommendations – using a middleman means that your delivery is less protected if something goes wrong. Finally, be sure to ask your chosen courier for an extra business discount if you can guarantee a regular supply of mail. If they won’t, there’s probably another company hungrier for your business.
As well as franking and discount couriers, you should also look at the way you pack. Postage rates are calculated on size as well as weight, so you’ve got to be an expert when it comes to wrapping. For example, bubble-wrap may cost more to buy than newspaper or woodchips but if you use less and can reduce your parcel size as a result, you’ll make more savings that way. If your item can fit safely and comfortably in a large padded envelope, you can do away with a large and costly box altogether.
However you choose to wrap your products, you’ve got to ensure your customers receive them speedily and in no more pieces than you sent them out! Cost-cutting that leads to damaged goods will soon prove a false economy as you’ll need to pay for a replacement item and additional delivery costs too. However, if you can manage to keep your items protected while shrinking down the size of your delivery, you’ll make significant savings on your postage costs.
You don’t have to cut corners in order to cut costs when it comes to your online retail business. By saving on your postage costs, you can reinvest in your business and watch it grow. Start today and make postage savings part and parcel of your business plan!