Trade Secrets to Help Boost Your Bottom Line

There are several ways to reduce your inbound freight costs. The first step, however, is to know what your freight costs are. You should be able to track your inbound freight and state it as a percentage of your total monthly or annual purchases. If you’re above the 3-percent to 5-percent range, focus on the following tips:
- Certify a freight company (or companies), or use a third-party freight consolidator/broker to consolidate your volume and get the best discounts. Then specify this to the carrier on your shipping instructions.
- When negotiating with product vendors, always ask for a unit price without freight added on. Never agree to let your vendors pre-pay freight and add it to your invoice — they may mark it up, and you won’t know it. After you have the lowest unit price, then ask for free freight, or let the vendor quote the freight and compare it against your certified carrier’s cost.
- Audit your freight bills regularly, or hire an outside service to do this for you.
- Make sure you’re not bringing in too many smaller shipments from the same vendor. This often is done to reduce the amount of inventory being carried. However, those cash-flow savings often can be offset by the large increase in freight costs for so many small shipments.