5 Ways to Effectively Lower Your Landed Costs

A new year is a chance at reflection while strategizing for an even more productive and successful year than the last. One important step in reflecting is to identify opportunities you may have not yet realized, and to set goals and milestones based on those opportunities. If you’re looking to lower your landed costs this year to either help improve margins or pass the savings to customers, here are five ways to reconsider your shipping operation and strategize to do just that.

Lower Your Landed Costs1. Optimize Warehouse Operations

The beastly core of any shipping operation is the warehouse, where products pass through to reach their final destinations. In the midst of the holiday rush, things might have moved around where you would least expect. Start off by checking and ensuring that all goods are where they should be. Next, figure out if there’s a better way to hold goods. Are there products that you should order fewer of? A well-organized warehouse means less time spent looking for goods and equipment, and more time spent shipping instead.

2. Improve Your Own Logistics

Once your warehouse is in order, it’s time to look inward in other ways. Across your company, staff in the warehouse helps bring goods in and pack them for final delivery to a customer or retail store. Can you better manage or staff your team so every hour is spent efficiently? Would new solutions, such as drop shipping, fit well with your current shipping needs? Research these opportunities to figure out ways to begin the year with better internal logistics, helping prevent lost goods and other costs that creep up into your landed cost and overall bottom line.

3. Research New Potential Suppliers

A new year is a new time to review contracts and relationships with the businesses that help your company succeed. Depending on what you ship, evaluate your agreements and figure out if it’s worth spending time to find new suppliers, distributors, or other partners. For example, if you depend on a lot of foreign imports, then it might help to re-evaluate your foreign partners to recalculate costs. Are there other regions you can purchase from? What is the difference in cost compared to an American distributor? How do import costs impact your bottom line? All of these things contribute directly to your landed costs, and removing logistical steps can potentially mean lower costs if you find better potential partnerships.

4. Reconsider Shipping Partners

This year saw the USPS bump shipping prices for the first time in three years, seeing a 9.4 percent increase in Priority Mail pricing for parcels among increases in just about every shipping service provided by the government’s service. Whether or not USPS is your shipping partner, it’s important to constantly consider which shipping partners you work with, their performance, and what you can do to improve your shipping costs. If you work through a logistics reseller, consider a direct partnership if possible, or what a competitor might offer instead to meet your business needs. Finding a partner that also provides more consistent delivery performance also helps keep customers happy without unnecessary delays or other costs in time and money.

This extends beyond the last mile shipping operation too. Depending on where your warehouse is located, it might help to research a third party courier service or other white label shipping operation for regular, consistent shipping needs. All of this depends on your volume, types of goods sold, and other factors, but it might be worth looking into.

5. Consider Better Inventory Management software

Last, but certainly not least, you should consider the tools you use to manage your existing shipping operation. Can your software do everything you need it to do this year? Often companies resort to bootstrapping software together, dealing with bugs and other errors quietly whilst slowing down the overall shipping operation, meaning higher landed costs and more unhappy customers. As your business grows and shipping gets more complicated, it helps to have software that makes all this easier, such as QStock Inventory. With QStock you can do everything under the sun, from integrating seamlessly with Quickbooks, to better identifying and managing your inventory with better barcoding, all within a seamless tool communicating between the store, the warehouse, and the office. QStock can be a great fit for your shipping needs, so be sure to contact us today and learn how we can better serve your needs.

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