Over the years, China has grown into one of the world’s powerful countries in terms of technological and economic development. It is also home to thousands of mega-factories offering various products to all suppliers all over the world. Importing products from China is also a great way to start an online business especially if you are planning to sell via Amazon. In other words, China is the top of mind when it comes to product sourcing.
Product shipping from China to its destination requires the following procedures. Likewise, the seller/importer should follow these guidelines or else he or she may experience delays in delivery or even not being allowed by Amazon to sell the products. That is why it is important to have a comprehensive shipping plan and avoid all the stress that may come along the way.
Of course, you should also consider your budget allocation for your business – including shipping costs. It can eat a large chunk of your budget. However, there are different ways to reduce your shipping costs. By knowing these 10 tips in reducing shipping costs, you can save a lot on your budget and use the extra cash to grow your business further.
How to reduce your shipping costs
There are various ways to slash shipping costs. Before anything else, it is important to note that shipping cost can be higher than your products’ actual price. At the end of the day, properly managing your shipping costs can make or break your entire business.
Handling your shipping costs can also reflect on your business’ consistency and cost-efficiency. It can also affect your product’s prices which may or may not appeal to many of your customers. That said, business owners should carefully plan how they can reduce their shipping costs. Doing so can help improve their overall financial performance.
Without further ado, here are the 10 best tips to reduce shipping costs when importing products from China:
1. Plan ahead.
As mentioned, all businesses should have a comprehensive plan. These include the strategies on how they will run the business and the budget they need to implement these. Likewise, you should also have a shipping plan. This includes the total order quantity, shipment frequencies, expected lead time, projected expense, and other documents needed for the entire shipment.
Having a plan can serve as a tool so you can negotiate with freight forwarders or agents for a lower shipping cost. Also, make it a habit to place orders in advance instead of doing it at the last minute. Rush orders and deliveries can cost additional expense and affect your business’ overall budget.
It is also important to consider the delivery lead time which depends on the transportation method you will choose. For large/bulk orders, you can opt for sea freight although it can take a month or two to reach its destination. Regardless, choose one depending on the total weight and intended lead time.
2. Choose a trustworthy and reliable shipping provider.
Importing products from China can be already tedious in itself. That is why it is a must to hire a trustworthy and reliable shipping provider for your importation needs – more so if you are new to this business. There are a lot of them in China – you just have to find the one that offers the best services and has been in the industry for years.
Some freight forwarders also offer shipping discounts and other limited promos for their clients. Availing these promos can surely help you save on shipping costs.
You can search for them online, attend trade fairs, or ask for a referral you’re your business owner/importer friends. Skim down to your chosen suppliers, compare their services and costs, and then decide which among them can help your business – hopefully in the long run.
3. Utilize your packages.
Shipping costs depend on your total product weight and volume. You would also have to pay on extra space on your total freight, which can be a total waste of your money. That is why it is important to optimize your packing so you make the most out of your shipping cost. Details will be discussed in the next list.
4. Consider the right container.
There are also two types of container loads – full container load (FCL) and less than container load (LCL). The former is applicable if the total order quantity is sufficient to fill up a full container. FCL containers also vary depending on the total amount of weight it intends to carry.
For example, the FCL 20-feet is meant to carry heavy products – may be few in quantity but heavy in nature — such as industrial equipment and minerals. Meanwhile, the FCL 40-feet is designed to carry items in volume or bulk such as clothing, furniture, and toys among a few. FCL is usually cheaper than LCL and can reduce cost per unit.
On the other hand, LCL is used if it does not fill up with your total order quantity. If you want to save extra costs and vacate the additional container space, you may have to share the container with other products. You can consolidate smaller orders so you will eventually fill up the container. It may also be a practical option if you have smaller orders.
5. Consider shipping lead time.
It refers to the period when your shipment reaches from point A (China) to point B (destination country). Determining the shipment lead time is crucial because it can affect your product inventory. The last thing you want to happen as an online seller has depleted product stock and that your next batch of products is still on freight travel.
That is why you should consider having longer shipment lead times – at least a month or more. Ideal lead time should include the loading period, expected departure and arrival, and other possible delays that may occur due to administrative reasons or bad weather. Longer lead times can also help optimize cargo loads and reduce shipment costs.
6. Consider shipping in off-peak periods.
You should not be surprised if you experience shipping delays, especially on peak months. This is mostly due to congestion, hence delays and higher shipping costs. Shipping can also be delayed due to national holidays. In the case of China, it is best not to schedule shipment during the Chinese New Year because a lot of people may be taking their vacation for a few days or weeks.
To avoid such delays, you may want to ship before or after the peak periods. This will help you save some extra budget from shipment costs. However, choosing your shipment period will still depend on your business nature.
7. Avoid labeling your shipment as “urgent”.
No business owners want to experience shipment delays. That is why most of them tend to label theirs as “urgent” even though they’re technically not. However, this common practice can literally put a price on your shipment.
For one, “rush orders” normally incur additional shipment cost. Your products may have reached on time or even earlier, but you spent more than you have originally planned. Unless you really have a tight schedule to follow, then labeling your items as “urgent” may be necessary. Then again, a thorough shipment plan should be implemented here as well to prevent such instances.
8. Have freight insurance.
No one will ever know what might happen while the products are in transit. Worst case scenarios may happen – say an air crash or sea accidents. That said, business owners should be in advanced-thinking mode all the time.
Getting freight insurance is optional, but it can be one of the most sensible investments you as an online seller can ever make. You can inform your freight service provider if you want to avail this, and get the best price there is. No worries though — it does not come with an exorbitant price.
9. Follow the shipment and documentation rules and regulations.
Not doing so may cost you some cash, and maybe a big one at that. In worst cases, you may not be allowed to have your products shipped due to improper documentation and not following shipment rules and regulations. Ultimately, you will waste money in the process and that’s the last thing you want to happen on your business.
10. Hire a sourcing agent to help you with your product shipment.
A reliable sourcing agent will help you all the way – from product sourcing to shipment. He or she should know the twists and turns of the entire importation process. In other words, hiring a sourcing agent can be a great investment for your business. At the same time, he or she can help reduce shipment costs thanks to the agent’s extensive importation knowledge.