UPS customers share ways they've reined in shipping costs to directly benefit the bottom line. Could these ideas work for your business?
Some of the best ideas for saving money on shipping come from UPS customers. Here, shipping managers and business owners share how they're leveraging UPS to cut down on shipping-related costs.
"We use UPS Capital to finance materials we bring in," says Eyal Levy, founder of Yogibo. "There are long lead times and sometimes you have to pay up front – UPS Capital helps finance the inventory for a month or two."
1. Revamp your warehouse. Shipping bottlenecks can create profit-robbing problems. Brushy Mountain Bee Farm, based in Moravian Falls, N.C., faced a three-week backlog of orders until UPS helped redesign the company's warehouse. Daily revenue jumped 70.4 percent.
That kind of payoff is not uncommon, says UPS's Scott MacDonald, director of customer solutions engineering services. "At a small company you can get twice the throughput with the same number of people, without having to expand," he says.
2. Move product faster. In 2013, UPS analyzed the Best Bully Sticks supply chain and found that a mix of delivery options allowed the company to guarantee three-day shipping within the 48 contiguous states for a flat fee. The company relies mostly on UPS Ground for the Eastern states but uses UPS 3 Day Select® shipping for Western states to ensure three-day-maximum transit times to all online shoppers.
3. Choose the right shipping system. UPS Internet Shipping is best for low-volume or occasional shippers. A step up is WorldShip® software, which can be integrated with your order entry, customer service, accounting and billing processes. If you want to put online shipping in the hands of employees at multiple locations, UPS CampusShip® is a good option because it gives you visibility into who's shipping what, by location and department. Here's a comparison chart to help you decide.
4. Explore shipping options. There are many cost-saving solutions. For example, Judith Sperling of JMS Products/Horseplay, which sells merino sheepskin products, used UPS Hundredweight Service® shipping to save 30 percent on shipping multiple boxes to trade shows. The service is ideal for nonpalletized, multipackage shipments that weigh 100 to 500 pounds and go to the same place on the same day.
5. Take advantage of the UPS Customer Technology Program. State-of-the-art shipping technology is available through the UPS Customer Technology Program at a discount – or even no cost.
"Customers may qualify for a subsidy," says Deddra Henderson, UPS customer technology marketing manager. "Customers should contact their sales person to determine if they qualify."
If you don't want a subsidy, you can still buy what you need at discounts up to 35 percent. To see whether you qualify, contact your UPS account executive for a needs assessment.
6. Integrate order entry with shipping. Milwaukee-based Cream City Ribbon integrated WorldShip with its manufacturing and order entry system, saving an estimated $35,000 in technology costs and 400 hours of labor per year. To make that happen, the company used OzLINK®, an order management and fulfillment solution available through the UPS Ready® Program.
"Dozens of UPS-approved solutions are available, from e-commerce shopping carts to warehouse management systems," Henderson says. "Because these applications are plug-and-play, you don't need integration expertise." Another benefit: UPS Ready software qualifies for subsidies through the Customer Technology Program. (See No. 5.)
7. Bundle services. One way to save money is to rely on one carrier. Virginia-based Best Bully Sticks ships to online buyers but also needs freight shipping for inbound inventory and outbound deliveries to pet stores and supermarkets that carry its natural dog treats. "We use UPS almost exclusively, and we get highly competitive rates," says CEO and owner Avrum Elmakis.
8. Reduce WISMO calls. Like many online sellers, Cream City Ribbon faced many "Where's my order?" calls. Quantum View Notify® functionality cut those calls down to size. These alerts can be sent from UPS at no extra cost when you process a shipment. "This freed up one of our employees to move from handling those calls into a sales support role," says owner Eric Crawford.
9. Get smart about inbound international shipping. North Carolina-based Plasticard Locktech International makes hotel key cards, gift cards and customer loyalty cards. Raw materials come from Thailand, and an initial UPS review showed that for years the company had been paying an unnecessary 5.8 percent duty. Using UPS Customs Brokerage saved about $2,000 per shipment, which adds up to over $200,000 per year.
10. Get strategic about outbound shipping. Plasticard Locktech International's global customers demand quick delivery. Using UPS's global distribution system, the company stores inventory at UPS locations in Canada, the Netherlands and the Middle East rather than lease or build its own warehouses. A location in Asia is next on the agenda. "We've done the math," says CEO Peter Krauss. "Everything we needed would literally cost us millions."
11. Master packaging. Aunt Sadie's Inc. sells its hand-poured candles from an 1865 farmhouse and barn in rural Vermont, shipping them nationwide. "In the beginning we knew nothing about proper packaging," says co-founder Gary Briggs. Since their candles are poured into fragile lidded containers, damage was an issue. "UPS helped design double-wall packages with nested inner boxes, and it's been years since we've had a damage claim," Briggs says.
You can get UPS packaging guidelines and advice online.
12. Consider UPS Capital for financing. In 2010 Yogibo launched a unique line of beanbag chairs from a home basement in Nashua, N.H. The products are so comfortable that sales mushroomed nationwide – sales are five times higher than three years ago. Materials are sourced in Israel and China, says founder Eyal Levy, and containers can take one or two months to arrive. "We use UPS Capital to finance materials we bring in," Levy says. "There are long lead times and sometimes you have to pay up front – UPS Capital helps finance the inventory for a month or two."
13. Spread the word. Ryan Novak's Chocolate Pizza Company Inc. sells a chocolate-and-toffee confection poured in a pizza pan and delivered in an authentic pizza box. His goal is to build a national brand, and one way he's doing that is to imprint the Chocolate Pizza logo on his UPS shipping label. "We get a lot of feedback from customers who say they like that – especially when they are sending a pizza to someone as a gift," Novak says. "It's awesome from a marketing standpoint and helps build your brand."
Have a tip of your own? Tell us in the comments below.