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Tips for reducing postage costs
When your business depends a lot on sending out items via courier or post, your postage and packaging costs can quickly become a major component of your budget. This article mostly deals with the Australia Post mailing system, clearly other countries will be different but the principles should still apply. Learning to correctly determine postage charges and minimise packaging costs are priority items that if not kept in check will eat away your profits.
Buy your packaging in bulk
If your packaging is derived mostly from the stock held at the local PostOffice, then buy in bulk, not 10 off or 20 off, but rather 100 at a time. As an example, a single Toughbag from AusPost may cost $1.10, in lots of 10 it drops another 10% to $1.00, at lots of 50 the price is down to about $0.70 per bag but at 100 it's an amazingly low price of about $0.65 per bag. To put that into perspectie, that's $110.00 if you buy 100 individually, or $65 for a single purchase of 100, a huge saving of $45*. This sort of discounting applies to most of the items you'll find in Austrliaa Post. One of the big reasons why it's such a huge discount from the one off price is because most of the items are supplied in boxes of 100, so for Australia post it's a simple matter of just handing you a sealed box, that's a big saving for them on labour. Next time you're in the post office, ask them about their discounts for bulk lots of the items you're thinking of needing, you'll be plesantly surprised most of the time.
Learn what weight limits to keep under
Going over a package weight by 1 gram or 1cm can be very costly. For domestic packages if you can stay under 500g the prices are quite reasonable but if you go over to 501g the price will instantly double for a lot of items. For international packages the limit starts at 250g. Invest in a set of good quality scales so that you know exactly what the weight of the packages you're sending are. Don't forget to factor in the weight of the packaging too, even a small cardboard box can add 100g to the total weight.
Understand the different between volumetric and dead weight
You will often encounter statements like "Postage is calculated on the greater of the volumetric and dead weight", what does this mean? Dead weight is the actual weight of the package as indicated by your scales. Volumetric weight is a weight based on the size of your package. Most courier and freight companies work on a 250kg per cubic metre volumetric weight. Working out the volumetric weight of your package is actually very simple, multiple the length, width and height of your package (in meters) by 250 (for this example) and that'll be your cubic weight. Say we have a package that's 80cm x 35cm x 12cm, then we work out its cubic weight using 0.8 x 0.35 x 0.12 x 250 = 8.4kg.
Couriers and the PostOffice will charge you for the greater of the two weights, so if your package weighs 5.5kg but it's volumetric weight is 8.4kg, you will be charged for 8.4kg.
(Australia Post) Work out what can be sent as a letter rather than a parcel
Next time you're at the post office, ask to see if you can get one of Australia Post's letter gauges. Using this gauge you can often find that a would-be parcel can be repacked into sufficiently small dimensions that you can have it classified as a letter, thus saving you postage.
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