It’s hard to believe that it’s almost time to close the books on 2012. Before you do, now is a good time to take a look at your operational costs and efficiencies. With the New Year approaching, not only should you celebrate the accomplishments you achieved, but you should take time to assess your potential for improvement, too. Are there areas where you spent more money than you expected? Are there areas where you can lower costs? 

    One area worth taking a second look at is your shipping strategy, as rates often change from year to year and shipping product offerings evolve. Beyond that, your own product inventory could be evolving: maybe you’re no longer planning to sell certain items or perhaps packaging has become less bulky and some items will fit into smaller boxes than before.

    While using only one carrier or only one type of shipping product may seem like a simple solution, it may not be the most cost-effective one. Taking the time to identify the right shipping mix for your business and to select a shipping software solution that can accommodate your needs while keeping the fulfillment process streamlined and efficient is well worth the investment – it could not only save you time and money, but it may also allow you to offer more attractive shipping rates and deals to your customers, which could, in turn, help grow your business. 

    Below are key factors I recommend you evaluate when determining your shipping strategy for 2013. 

    Check Your Weight: One of the most important factors you should consider when shipping is weight. Generally speaking, the United States Postal Service® (USPS®) offers the best value for parcels weighing less than 5 pounds. In fact, the USPS has become a fierce competitor with the private carriers, and in 2013, will offer services like tracking and delivery information at no additional charge for most package classes, especially if you use electronic postage. What’s more, if you sell items that weigh less than 13 ounces, like socks, beauty products or certain office supplies, USPS First Class Package Service rates could save you several dollars per package over other rate classes. For heavier items, USPS Priority Mail Flat Rate® boxes may be ideal, and in some cases, a private carrier could be the least expensive way to ship a very heavy B2B item. One size doesn’t fit all for most businesses.

    Evaluate Surcharges: Unfortunately, with private carriers in particular, the base shipping rate can be far from the final rate you’re actually charged. Additional fees such as fuel surcharges, delivery area surcharges, rural surcharges, Saturday delivery surcharges and residential delivery surcharges can add up quickly and subtract from your bottom line, if you aren’t prepared for them. In fact, private carriers have up to 184 surcharges, with many billed separately from the original delivery fee, so double check your invoices and make sure you know how much shipping is really costing you and that you’re charging customers appropriately. 

    You should also review where most of your orders are being shipped to see if you can eliminate some surcharge costs by using a different carrier, at least for certain shipments. The USPS can be advantageous for shipping to residential addresses, especially rural ones along with addresses in Hawaii and Alaska. Since the USPS is already delivering mail to these addresses every day, six days a week, there aren’t additional charges for these types of deliveries.

    Insure for Less: Parcel insurance can give both you and your customers peace of mind. The reality is, no matter which shipping carrier you use and no matter how well you pack, sometimes items still get broken, damaged or lost. Perhaps you want to offer all of your customers the option to add shipping insurance for an additional charge, or perhaps, if you sell more expensive or highly breakable items, you want to require shipping insurance on certain purchases. It’s important to determine what insurance approach makes sense for your specific product offerings and your customers’ expectations. 

    Making insurance an option for your customers shouldn’t really cost you anything. If a customer decides to purchase insurance, certain shipping software solutions make this process nearly effortless – there are no extra forms or manifests for you to fill out just to purchase the insurance. In addition, most electronic postage providers sell third-party shipping insurance for much less than carrier insurance rates; in some cases, more than 50 percent less. Often, the claims process is easier with these third-party providers, too. 

    If you decide to offer insurance, be sure to note how the rates are calculated relative to the declared value. For example, if rates are calculated per $100 of value, you should consider whether it’s worth the additional cost to value an item at $410 or $427.82 instead of just $400. 

    Calculate Price Changes: Every year, shipping carriers evaluate their prices and products. With rate changes, you sometimes also get additional features or services for free, like delivery or signature confirmation, when there was previously an extra charge. If rates and shipping products change each year, it’s best to research each carrier, whether it’s one you currently use or not, to make sure your shipping mix for the current year will still be the most cost-effective for you and your customers in the coming year. In fact, not only should you check general rate changes, if your business is growing, you should see if you qualify for additional volume-based discounts. Generally, with regards to the USPS, electronic postage rates will always be less than retail Post Office rates. 

    It’s also important to make sure that any 2013 price changes and/or new product offerings – whether they become effective in January or at another time during the year – are immediately incorporated into your shipping software by the shipping technology company through timely automatic updates; otherwise, you won’t be able to take advantage of potential cost savings, and you actually may not be printing enough postage to ship your packages. 

    Reach More Customers: While it’s true that shipping internationally and shipping to APO/FPO/DPO addresses requires customs forms, it isn’t true that these shipping processes have to be frustrating, time consuming and expensive. If you’re restricting order delivery to domestic street addresses to keep your fulfillment process hassle-free, you could be unnecessarily limiting your growth potential. The USPS offers affordable shipping options for many international markets, and it’s the only shipping carrier that can deliver to APO/FPO/DPO addresses at domestic shipping rates. In addition, certain shipping software solutions make it easy for you to generate and print an integrated USPS shipping label with all of the necessary postage and customs information included. That package can then be picked up from your doorstep by a mail carrier, just like any other package with an electronic USPS postage label. 

    While it will likely require some additional research, investing the time to select the right shipping mix and shipping software solution for your 2013 product inventory can play an important role in helping you maximize your growth potential and achieve your performance goals in the coming year. 

    Amine Khechfé has worked in the mailing and shipping industry for 25 years. He currently serves as co-founder and general manager for DYMO™ Endicia®, the leading provider of customizable, easy-to-use and affordable shipping and mailing postage technology solutions. Since 1987, DYMO Endicia customers have printed more than $8 billion in postage, and tendered $1.5 billion of parcel business to the U.S. Postal Service in 2011 alone.