E-commerce has just changed the way of business. Now, you can buy and sell everything online from the comfort of your home and town. Globalization has brought the entire world closer; however, it has increased the work of logistics. You can shop whatever you need from any other country and city, but the logistics cost is one of the biggest tension for small and medium enterprises. Due to the across-border shipping, you need to pay a high price on shipping; however, here are a few ideas by which you can reduce the logistics cost.
- Collaborate with Other Shippers
Many of you will find it a stupid idea, especially joining hands with your competitors; however, this is one of the best notions to cut the cost of shipping. Many companies do not want to collaborate with other shippers, but it can solve the problem of small and medium-sized companies. Especially, for an entrepreneur, this idea will definitely be going to work. At the initial stage of the evolution, every business needs to cut down the expenses, and logistic cost can engulf your budget; therefore, you need to generate a solution that can provide you the best services at the economic rate.
- Combine Sales and Inventory Data
Many companies do not scrutinize their entire sales system, this sluggish behaviors lead them to pay extra on the shipping. Thus, they need to combine the sales and inventory data in their system. Before stepping into the next order, you should know the available inventory; however, do not mix up the numbers. The radical thinking will say this is not an easy process, you might end up in the crucial analysis, but you need to do it to cut the cost of logistics.
- Try to Implement Cross-Docking Phenomenon
This is another effective way to cut the cost of shipping. This phenomenon allows you to unload the merchandise from the inbound delivery trucks and load them onto the outbound vehicles. This direct loading and unloading will save you time and cost.
If you are a struggling entrepreneur, you cannot afford or manage the cross-docking, then you can take the help of a 3PL partner. They will strategize to cut the cost of logistics and implement the resources of cross-docking.
- Build a Packaging Unit in the Distribution Center
Many retailers do the mistake of sending their packages from the distribution centers to the packaging firms and then back to the distribution centers. This increases the cost of logistics. They do not leave their goods at the factory or distribution organizations. Therefore, to reduce the shipping cost, a company or factory must need to build a packaging unit in the distribution center, so you can eliminate the cost of sending your packaging from one point to another. This way you can decrease the freight cost.
- Try to Reduce Chargebacks
Large Consumer Packaged Goods (CPG) companies have the assets to monitor chargebacks. You must have similar resources to reduce the chargeback fee, otherwise, you will have to pay a hefty amount and it will increase the logistics cost. Therefore, you need to collaborate with a shipping company that will ship for the multiple CPG companies and police outbound shipments.
- Increase Orders Capacity
As a business or factory, you need to make your consumers happy. When they are liking your products ultimately your sales will surge. You can take the benefit from the digital customers experience feedback. When you can make your customers happy, you will receive high volume orders. The bulk shipment will reduce the cost of logistics.