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Tips for Cutting Costs in Your Supply Chain

Let’s face it: getting your product from point A to point B can come with a lot of fees (both obvious and hidden). We’re breaking down the four key areas of your supply chain where we recommend reviewing your costs:

Operations & Shipping

OK, this one is a no-brainer. Shipping product is not free. Our world may be mostly tech-based, but for most companies – especially startups – it takes manpower to get a product ready to ship. From assembly and kitting to the cost of the packaging itself, where you can leverage cost-saving strategies? Ask yourself the following questions:

  • What are your shipping costs per order (on average)?
  • What is the cost for returns per order (on average)?
  • What is the cost of packaging per order (on average)?
  • How often are you shipping?

Some costs you cannot control – but others you can. Set up your shipping terms so that they are more favorable to you. Furthermore, limit your returns policy to lessen any additional burden to your cash flow.

Sales & Marketing

Even if you’re new to owning a business, you know by now that sales and marketing is an ongoing, adaptable process and never a definitive “magic bullet” that will secure your income for the rest of the quarter. To limit extraneous costs here, target your customers. Know who they are, what they like, and how likely they are to purchase from you. The higher the likelihood, the greater the chance they won’t mind paying additional fees (such as shipping or returns) for your product.


We know it’s tough finding the right fit for partnerships. That’s why we recommend you do an audit of who you are paying, what you are paying them for, and if there are any areas where you can cut costs. Consider the following checkpoints within your vendor list:

  • How many vendors are you working with?
  • What are the payment terms?
  • What are the terms of each sale?

Most importantly, have a conversation with the vendors you value the most. Where can they help? Perhaps they have recommendations for a different type of order picking or they can give you support with secondary sources. As a benefit to helping your business succeed, the vendor may be entrusted with more of your business.


Shipping your products safely and effectively is paramount, and the packaging that is used is critical for requirements. That being said, is your packaging helping or hurting you?  There is a thin line between packaging that protects the product during transit and packaging that wastes money unnecessarily. Two major areas you should review are the weight of the packaging and the quality. The weight of packaging will add to the overall shipment weight – which of course impacts the cost to ship. And consider if you have had multiple claims due to broken products during shipment. If so, you may need to change the packaging to reduce your claims and reduce costs.

Bottom Line: There are dozens of areas in your business that you should evaluate for ultimate cost savings. If you’d like another set of eyes on your supply chain, contact our team. We provide complimentary Supply Chain Checkups (a $150 value). Contact us today to schedule your complimentary call!

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