6 Tips for Improving Distribution Shipping Costs
Posted on: August 15, 2016 | By: Craig Thompson | Acumatica, Microsoft Dynamics GP, Wholesale Distribution
As a wholesale distributor, shipping costs are a necessary evil that many of us would rather do without. That being said, there are many resources out there that can help significantly lessen the blow and improve your distribution shipping costs to help benefit your business. Below are some of our favorite methods to consider when looking to lower and improve your shipping costs within your distribution company.
1. Demand Planning
Finding the right MRP for your distribution organization can be tough, however luckily for us, automated Wholesale Distribution ERP solutions like Acumatica ERP and Microsoft Dynamics GP can help simplify the demand planning process within your stocked inventory and ultimately improve your distribution shipping costs. Being unable to properly anticipate and forecast sales trends can lead to inventory shortages and rushed shipments of small numbers…aka very pricey shipments! With Acumatica, Dynamics GP and other automated ERP software systems, your inventory is forecasted automatically based off of seasonal trends so that you can place shipments when you need them, without having to pay for expedited shipping.
2. Consider all shipping fees before billing customers
If your customers are paying for shipping, be sure to charge them the full amount, not just the baseline. Often times special charges like fuel surcharges, signature fees, etc. are forgotten and absorbed by the distributor when in reality you could be saving a lot of money by getting the whole picture and making correct charges
3. Seek out a partnership
Are you a part of a professional association within the wholesale distribution industry? If so, you could qualify for special discounted shipping pricing for members within the association. Accredited shippers like UPS and FedEx often offer a hefty discount on certain services depending on the partnership and organization size.
4. Automate when necessary
Implementing an automated ERP software system like Acumatica or Microsoft Dynamics GP could seriously improve distribution shipping costs within your wholesale distribution organization. Some shipments are expected like clockwork, rather than having to manually go in and place every anticipated order separately, try setting up an automated shipping schedule to help improve distribution shipping internally and keep things much more organized and streamlined.
5. Don't be afraid to negotiate
I know that for some, negotiating shipping costs can be an intimidating task to take on, especially if you've never been bold enough to do it before. That being said, most shipping companies know that once you choose a shipping company, you will stick with them for a while, which is why the competition is usually very willing to offer you a lower price. Even if you don't make the switch to a different shipping company, having a competitors quote to compare with is often enough to get a little bit of leverage in the negotiation department.
6. Consider flat rate shipping options
If possible, talk to your account manager about the possibility of utilizing flat rate shipping options. This method could reduce your shipping costs by up to 15% and save you time. Many major shipping companies provide this option for wholesalers and have boxes that could work for your organization.
For more information on how Microsoft Dynamics GP or Acumatica could help lower your shipping costs, contact Logan Consulting your Chicago based Acumatica and Dynamics GP partners for a consultation or demo.
