A retailer's guide to cutting postage and packaging costs

When you're a small retailer competing against huge companies like Amazon, it's not easy to get shipping costs right. It's usually impossible for a small firm to offer free delivery like the bigger competition does, as you'll cut into your profits. However, high shipping costs can put customers off. Previous research from Forrester has shown the biggest reason why customers abandon online purchases at the checkout is because the postage fees are too high.

Here are some tips on how you can cut down your postage and packaging costs, so you can reduce the amount of non-converting customers.

Stop offering things for free

Freebies cost money. Of course they can help entice customers in, but that doesn't always guarantee more sales. Offering free postage can put a serious dent in your profits, especially if you have to ship big or heavy items. Instead it's better to offer reasonably priced postage. It can be difficult to judge what's reasonable, but many retailers choose to charge postage based on the weight or size of the item the customer is buying.

If you can afford to, you might just want to offer free delivery on purchases or orders over a certain amount. Not only will this please your customers, it might also make them more willing to spend more. After all, if they're thinking of purchasing something at £40, but see you offer free postage on transactions over £50, it's quite likely they'll decide to spend an extra ten pounds, even though it might actually be cheaper for them to just pay the delivery cost.

You might want to consider not offering free returns too. According to the Wall Street Journal around a third of all items bought online are returned, so offering this service for free could also have a huge impact on your profits. However, just like with postage charges, you are taking a risk. A number of your customers might take some solace in the fact they know they can return their purchase for free in case it doesn't fit or isn't what they expected. On the other hand, many buyers might not even consider checking whether it's free to return an item, because they're buying impulsively or are more concerned about postage costs.

If you're concerned you'll upset your current customers by taking the free returns offer away, why not give them free returns to bricks-and-mortar stores. Naturally this only works if your business has a decent number of stores, but offering this will cost you nothing and could be enough to keep everyone happy. Past research from A.T. Kearney shows 83 per cent of UK consumers prefer to return items in-store anyway, regardless of how they were originally purchased.

Cut down on parcel weight, size and packaging

The heavier the package, the more it's going to cost to send. It seems obvious but many small businesses are spending far too much money on packaging they don't need. Remember that unless you're sending something breakable, you don't need to pad every single box you send out with bubble wrap or packaging peanuts. Even when you're sending something fragile, the key is to pack it in tightly, so that it doesn't move within the box. Therefore you shouldn't need to use five layers of bubble wrap, as long as the item doesn't slide around when the box is moved.

Use ipostparcels – with great discounts on courier services

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Keeping costs down on your shipping fees enables you to stay competitive, especially in an arena like eBay where these prices can make or break a purchase. Staying professional, yet economical, is a tricky balance when it comes to packaging. When you ship a parcel, the outer packaging is the first thing a customer sees, so the outer appearance as well as the interior is crucial to making the right first impression for you and your brand - almost as important as the contents!

So what can you do to save money in the packaging department and protect your bottom line?

Reuse, Recycle!

Packaging can be expensive and there's nothing wrong with reusing old boxes and bubble wrap. Not only is it good for the environment, it will save you a considerable amount of money a year. If you don't have too many parcels sent to your office, talk to your local supermarket or any other businesses near you that might be inundated with boxes. It's likely that they'll be all too happy to give you some. Only pick ones in a good condition though - remember that your customer might not be happy receiving something in a scruffy box.

Beware boxes with holes, creases or tears. This is particularly true with larger boxes or when sending heavier items, as any damage will impact the structure of the box, making it less likely to withstand any bumps in the journey.

Build up a stash of packaging materials such as bubble wrap and packing peanuts by keeping any that you receive - provided they're clean and still in a good working order. Packing peanuts can be easily stored in a large bin bag or box, and topped up whenever you get a new package full. Ask friends and family members to save items for you too, but watch out for bubble wrap that has been wrapped in sticky tape - it's near impossible to peel off without damaging the protective bubbles. When re-using bubble wrap use a magic tape to seal - it's much easier for your customers to open.

Making the inside of the box look nice by wrapping the items in coloured tissue can compensate for an obviously recycled outer packaging - and tissue paper that's only been used once before is likely to still look like new. Consider getting some branded stickers made; these can be done relatively cheaply and will add a professional touch to both the inside and the outside of your parcel. 

Newspapers are always a good go-to for recycled packaging. When screwed up, the paper will make very sturdy packaging for delicate items. You can also use shredded paper - just make sure that none of the shredded sheets are confidential, as the information may still be legible.

So long as you take care with the wrapping and the packaging, there's no reason why the customer should think any less of your brand by using recycled materials. You could even get some stickers or a stamp made saying 'Recycled packaging' to highlight the fact you're re-using, recycling and taking care of the environment!

What about alternative packaging solutions? Think outside the box and try alternatives such as popcorn! Of course, make sure it's unsalted, un-sugared and definitely not toffee flavour - just plain popcorn makes a great green alternative to Styrofoam peanuts - it's cheaper too. You'll have to pop it first though – and just remember when sending internationally to check that corn isn’t a prohibited item in the destination country.

Size matters

As you probably already know, parcel size has an impact on postage costs too, as prices are calculated on volumetric weight, so it's unwise to use bigger boxes than are necessary. If you use less packaging materials, you might be able to reduce the size of the box. For very small items it might be possible to avoid using boxes altogether and send the items in padded envelopes instead.

Buy in bulk

Buying your packaging in bulk is a great way to keep the cost down and get a good deal - as long as you have the space to store it all. Boxes full of, well, boxes, take up a lot of space. Generally due to their nature they don't weigh a lot though, so can be safely stored in an attic space or high up on shelving units if need be. Just be sure to keep them somewhere dry and not in a damp area such as a garage, as this will cause cardboard items to deteriorate, making them ugly, weak and possibly unusable.

Hunt around for the best price and you should be able to find a competitive deal, particularly if you can afford to buy a lot in one go.

Be frugal with branded boxes

Branded boxes and padded envelopes can look really snazzy, but will also rack up the costs. If you really want to use these then consider only using branded packaging for particularly high value orders to keep costs down.

Why not make your own branded address labels or return labels by printing them yourself?  Most labels will come with a downloadable template; allowing you to customise them yourself with your logo and branding. What's more, you'll always be branded no matter what size box you use. This is also a great option if you use recycled boxes as the stickers will cover old address labels.

With tips like these you can certainly save money on your packaging; combined with great postage deals from ipostparcels, there's no reason for using courier services to be a challenge to your small business, in fact it can be easy!

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