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How Can Consolidated Shipping Save Your Business Money?

About 65% of consumers are willing to pay more for faster deliveries.

With any business that sells products, maximizing profitability should always be one of the most important focuses. While selling products is vital here, there are plenty of business operations that will affect the profits that your organization makes.

Shipping is one of the biggest factors, and the larger your business grows, the more important this will be. Consolidated shipping is a solution that can reduce costs, helping to improve your profits.

In this guide, we’ll take a look at the ways in which package consolidation can save your business money. Keep reading for more.

What Is Consolidated Shipping?

Shipment consolidation is a method of shipping goods that involves grouping multiple items together in the same package. This is a common practice with many businesses when it comes to small products. If you were to buy three pairs of socks from a clothing company, for example, you’d expect them to all arrive in the same package rather than three separate ones.

This isn’t seen so much with companies that sell large, heavy, or fragile products. Shipping such items can be more challenging, so most businesses default to packaging them separately.

Benefits of Consolidated Shipping

You may not want to immediately adopt a consolidated shipping approach, but it’s important to consider it as an option. There are several cost-saving benefits that can make it a good move for your business.

Less Expensive Shipments

If you can effectively consolidate shipments, your overall shipping expenses will drop. Every shipment has a cost, but consolidating multiple together into a single shipment will reduce these. You may even be able to share transportation with other shippers, and will then only have to pay for a portion of the costs.

Efficient Resource Utilization

Cargo space and transportation equipment are other costs you need to worry about. Consolidating shipments means that you can make the most out of these resources. More efficient use of space and vehicles means less expenses.

Reduce Carbon Footprint

Consolidating shipments helps to reduce the amount of space needed in transport vehicles. This means you won’t need to use as many trucks (or other shipment methods), leading to reduced fuel consumption.

Not only will this save money on fuel, but it’s also a more environmentally friendly approach. You can highlight this to your customers, as showing that your company is environmentally conscious will help improve your brand image.

Improved Delivery Speed

Consolidated shipping will often mean that your deliveries get to your customers faster. Faster transportation options generally cost more, so being able to save this money while still getting better results is ideal.

Enhanced Security and Reduced Risk

While it’s uncommon, there can be unexpected problems with deliveries at various points on their journey. With consolidated shipping, there are fewer transfers and handling points, which results in less risk of shipments being lost or damaged. Having to replace lost or damaged goods can be costly, so minimizing this issue can be a major benefit.

Streamlined Customs Clearance

If your business sends goods internationally, you’ll need to send them through customs. The customs clearance process can involve a lot of paperwork making shipments take longer. With shipment consolidation, you can streamline this process so you don’t have to spend as much time or money dealing with it.

Improved Customer Service

Quality customer service is vital for any business to succeed. When people order products online, they prefer to know when their goods will arrive, and being able to get shipments to customers faster is always a good thing.

Being able to meet delivery timelines and provide customers with better service will help with customer retention. It always costs less to retain customers than it does to get new ones, so this will help you maintain sales without having to worry so much about lead conversion rates.

Flexibility and Scalability

Having flexibility is always a good thing in business. Shipping consolidation offers adaptable scaling solutions, making it ideal for small and large businesses alike.

This also means it will be easier for you to scale your shipping needs as your business grows. Growth is always good, but it often presents challenges that many businesses aren’t prepared for. Being able to maintain efficient shipment practices and consistency will prevent issues that could end up costing your business a lot of money.

Collaboration and Networking

Shipment consolidation encourages collaboration between carriers, shippers, and logistics providers. This helps to foster networks and create opportunities for all those involved. Different businesses can then share resources and ideas to further benefit both of them.

Economies of Scale

As your business grows and sales increase, your cost per sale will go down. This is known as economies of scale, and consolidating shipments can help build this.

On top of saving on costs from each sale, your negotiation power with carriers will increase. You may then be able to get better rates and handling fees, as well as other potential cost advantages.

Scenarios Where Consolidated Shipping Is the Right Choice

Consolidated shipping may sound a bit complex. To get a better idea of when it would be most, consider these examples.

Firstly, if you often sell certain items together, you may benefit from consolidating them. For example, if you sell sporting goods, you might often sell skis along with items like helmets, goggles, gloves, etc. You could even offer them together as a package deal in your online store to encourage sales.

Another good example is if you have small items that could easily go into a larger box along with a large item. These small items might not need their own boxes, so you can save by packaging them with bigger items.

Just bear in mind that it’s not always the best option. Consider the potential drawbacks so you know what choice to make.

Improved Shipping and Logistics

Consolidated shipping can help you save money in a range of ways. It’s worth taking the time to refocus your logistics approach to reduce company shipping costs and make it easier for your business to grow.

Shield Works offers warehousing and 3PL services that can help you reach your business goals. Contact us today to find out more about how we can help your business.