Reducing Shipping Costs for International Ecommerce Brands

Expanding into international markets is a powerful way for ecommerce brands to grow their audience and increase sales.

However, global shipping costs can quickly eat into profits if not managed effectively. From navigating complex customs processes to optimising carrier selection, reducing shipping costs is a critical aspect of sustainable international expansion.

This guide offers actionable strategies to help international ecommerce brands minimise shipping expenses while maintaining reliability and customer satisfaction.

Consolidate Shipments to Regional Warehouses

Shipping products in bulk to regional warehouses near your target markets is one of the most effective ways to lower international shipping costs. This approach reduces per-unit costs and speeds up delivery times for your customers.

Benefits of Consolidation:

• Lower Shipping Costs: Bulk shipments reduce freight costs compared to individual order shipments.
• Faster Delivery: Items stored locally can be delivered quickly within the region.
• Reduced Customs Hassles: Clearing customs in bulk streamlines the process and avoids repetitive fees.

Pro Tip: Partner with a fulfilment provider that offers multi-warehouse solutions for seamless inventory management across regions or find different 3PL partners in your key sales markets who similar fulfilment technology, processes and customer service.

Optimise Packaging to Reduce Dimensional Weight

Shipping carriers calculate costs based on the greater of actual weight or dimensional weight (DIM). Oversized packaging can inflate DIM, leading to higher shipping fees.

Packaging Optimisation Tips:

• Use Right-Sized Boxes: Select packaging that fits your products snugly to minimise excess space.
• Lightweight Materials: Choose eco-friendly, lightweight materials to reduce overall weight.
• Flat Packing: For items like apparel or accessories, use flat packing to reduce volume.

Pro Tip: Use automated packaging machines or AI tools to determine the ideal box size for each product.

Negotiate Rates with Multiple Carriers

Working with multiple shipping carriers allows you to compare rates and secure the best deals for your specific needs. Many carriers offer discounts for businesses with consistent shipping volumes.

Steps to Negotiate Better Rates:

• Leverage Volume Discounts: Commit to a minimum shipping volume to qualify for discounted rates.
• Request Custom Contracts: Ask carriers for tailored pricing based on your unique shipping patterns.
• Use Multi-Carrier Software: Automate rate comparisons to select the most cost-effective carrier for each shipment.

Pro Tip: Review contracts annually to renegotiate rates as your shipping volume grows.

Leverage Free Trade Agreements and Customs Expertise

Customs duties and taxes can significantly increase the cost of international shipping. Understanding and leveraging trade agreements can help you minimise these costs.

Customs Tips:

• Know Free Trade Agreements (FTAs): Research agreements between your home country and target markets to reduce or eliminate tariffs.
• Classify Products Correctly: Use accurate HS (Harmonised System) codes to ensure fair duty rates.
• Partner with Customs Brokers: Work with experts who can navigate complex regulations and reduce delays.

Pro Tip: Include customs fees in your pricing strategy to avoid surprises for customers and maintain profit margins.

Offer Multiple Shipping Options to Customers

Giving customers flexibility in their shipping options can help you balance costs while meeting different delivery needs. Some customers may prioritise speed, while others prefer budget-friendly options.

Shipping Options to Consider:

• Economy Shipping: A cost-effective option for non-urgent orders.
• Express Shipping: For customers willing to pay a premium for faster delivery.
• Carrier Pickup Locations: Allow customers to pick up orders at carrier hubs to reduce last-mile delivery costs.

Pro Tip: Clearly display estimated delivery times and costs at checkout to help customers make informed decisions.

Take Advantage of Shipping Zones

Shipping carriers often use zone-based pricing, where costs increase with the distance a package travels. Strategically positioning inventory in key regions can help you stay within lower-cost zones.

Zone Optimisation Strategies:

• Analyse Your Target Markets: Identify regions with high demand and position inventory nearby.
• Use Distributed Warehousing: Partner with one or more fulfilment providers offering warehouses in your strategic global locations.
• Localise Product Offerings: Reduce shipping distances by sourcing products closer to your target market.

Pro Tip: Use heat maps and data analytics to pinpoint demand hotspots for better warehouse placement.

Partner with a 3PL Provider

Outsourcing fulfilment to a third-party logistics (3PL) provider can significantly reduce international shipping costs. 3PL providers often have established networks, bulk shipping discounts, and expertise in cross-border logistics.

Benefits of a 3PL Partner:

• Access to Discounted Rates: Leverage their relationships with major carriers for lower shipping fees.
• Customs Expertise: Avoid costly mistakes and delays with experienced customs support.
• Scalability: Easily adjust operations to accommodate seasonal peaks or expanding markets.

Pro Tip: Choose a 3PL partner with a strong presence in your target countries and experience in your product category.

Conclusion

Reducing international shipping costs is a critical component of building a successful global ecommerce brand. By consolidating shipments, optimising packaging, leveraging trade agreements, and working with reliable partners, you can streamline your logistics operations while maximising profitability.

At E-PickPack, we specialise in helping international ecommerce brands optimise fulfilment and shipping processes. With multi-warehouse solutions, bulk shipping discounts, and customs expertise, we make it easy to expand into global markets without breaking the bank.

Ready to cut your international shipping costs? Check out our pricing to learn how we can help your ecommerce brand succeed worldwide.

FAQs

Q1: What is the most cost-effective way to ship internationally?
Consolidating shipments to regional warehouses and negotiating volume discounts with carriers are two of the most effective strategies.

Q2: How can I reduce dimensional weight charges?
Use right-sized boxes and lightweight materials, and flat-pack items where possible to minimise DIM weight.

Q3: Do free trade agreements apply to all products?
No, free trade agreements often have specific rules of origin and product categories that qualify for reduced tariffs.

Q4: Should I pass customs fees to my customers?
Including customs fees in your pricing or offering DDP (Delivered Duty Paid) options can enhance transparency and avoid surprises for customers.

Q5: How do 3PL providers help reduce shipping costs?
3PL providers offer bulk shipping discounts, expertise in customs, and access to multiple warehouse locations to lower overall shipping expenses.