Hey there! Are you a seller looking to save money on your shipping costs? Negotiating lower rates with shipping companies can be tricky. But it's an important part of running a profitable online business.
In this post, I'll share 7 proven tactics to get better deals from shipping and logistics providers. Whether you use Vietnam Post, GHN, J&T Express, Best Express or other carriers, these negotiation strategies will help you reduce your fulfillment costs.
Let's dive in!
1. Do your research
First things first - learn everything you can about the shipping company.
- What services do they offer?
- What are their rate cards and pricing structure?
- What additional fees or surcharges do they have?
- Who are their major customers and competitors?
Arm yourself with this information before you start negotiating. It'll help you ask smarter questions and identify areas where they can potentially offer discounts.
For example, Best Express may have minimum volume requirements to qualify for their best rates. Whereas Vietnam Post could offer special e-commerce customer rates.
The more you understand the shipping provider's business, the better position you'll be in to negotiate.
2. Know your own shipping data
Analyze your own order history and shipping metrics.
- How many packages do you ship each month?
- What are the most common dimensions and weights?
- What destinations do you ship to most frequently?
Crunching these numbers will reveal your shipping volume patterns.
You can then use this to negotiate better pricing for your frequently shipped package types and destinations.
For example, if 70% of your parcels go to Hanoi and Ho Chi Minh City, push for special rates for those routes. Back it up with data to strengthen your case.
3. Bundle multiple services
Are there other services you can bundle along with shipping? This can help you get volume discounts.
For example, many sellers use GHN for shipping as well as their warehouse storage and fulfillment services.
You may be able to negotiate 5%-10% off on shipping if you commit to using their fulfillment center for 1 year.
The more business you can give a logistics provider, the more willing they'll be to negotiate lower prices. Think about all the services you use and see if you can optimize costs.
4. Commit to higher volumes
Shipping companies love guaranteed volumes. If you commit to sending them X number of parcels per month, they may offer you very attractive rates.
But don't just blindly commit to impossible targets. Offer volume commitments based on realistic growth projections.
For example, let's say you currently ship 800 orders per month through GHN. Offer to ramp that up to 1,000 orders by Q3 and 1,200 orders by Q4.
The company will see you're a growing customer and be more flexible. Just make sure you can actually hit those volume targets - or renegotiate if needed.
5. Offer exclusive business
Similarly, offering exclusivity can help reduce rates too.
This means promising to use the shipping provider as your sole fulfillment partner for a set period of time.
In return, ask them for 10%-15% off their standard pricing.
But again - only do this if you're confident about hitting those exclusivity targets. Renegotiating an exclusivity deal is much harder once signed.
6. Get quotes from multiple providers
The best way to negotiate is to have leverage.
Shop around and get quotes from at least 2-3 shipping companies. Let each one know you're exploring options.
For example:
"We’re currently using GHN for shipping but are open to switching providers if we get better rates. If you can offer 10% off GHN's pricing, we’re ready to move our business over."
This type of competitive bidding puts the power in your hands. Shipping companies will be much more aggressive with discounts to win your business away from competitors.
7. Offer to improve shipping performance
Finally, you can negotiate lower rates by offering to improve the shipping experience for the logistics provider.
This could mean:
- Preparing shipments faster.
- Better package labeling and documentation.
- Smoother handovers for pickup.
- Providing shipment forecasts.
- Giving feedback to improve services.
Any effort from your side to make the shipping process easier can give you justification to ask for better pricing.
It shows that you want an long-term partnership - not just the lowest rate right now. This builds goodwill and the shipping company will be more flexible.
So next time you're looking for better shipping rates, keep these 7 negotiation strategies in mind. Done right, you can potentially save 5%-15% on your fulfillment costs. That goes straight to your bottom line!
Let me know if you have any other shipping negotiation tips. I'd love to hear how you've gotten better deals from logistics companies!