Keeping shipping costs down is increasingly tough for businesses in New Zealand. Even if sales increase, shipping costs still eat into your profit margins.
It’s getting harder to compete with big international players who can afford cheap or even free shipping, and 48% of shoppers abandon carts due to shipping costs.
But there are ways to keep shipping costs down.
By negotiating better rates, optimising packaging, buying supplies in bulk, offering transparent shipping options, and automating where possible, you can cut shipping costs while improving customer experience.
This guide breaks down some practical tips, and how Zappy can help you turn shipping from a cost burden into a competitive advantage.
Keep reading to start saving.
1. Negotiate lower shipping rates with carriers
Small business owners often don't realise that shipping rates are negotiable and that you’re not getting the best deal by going direct. That’s because:
- Most carriers reserve their best rates for businesses that ship hundreds of parcels daily.
- Without specialised knowledge of carrier pricing structures, it's difficult to know what discounts are possible.
You could pick up the phone and negotiate with couriers directly – but you don’t have time to do that for every order.
Shipping solutions turn this around by providing:
- Collective negotiating power: Your shipments combine with thousands of others, creating the volume leverage needed to secure better rates
- Multi-carrier comparison: Access all major carriers (domestic and international) in one place, comparing not just between companies but between service levels (standard vs. overnight)
- Automated rate shopping: Our system automatically finds the best rate for each shipment without the need to check multiple websites
Zappy customers typically save a significant amount on shipping compared to standard rates, improving their bottom line.
2. Use accurate product packaging
Shipping is all about volumetric weight – size trumps weight, and empty space is surprisingly expensive.
Carriers don't just charge for what your package weighs. They charge for the space it occupies. Think of it as renting real estate on a delivery truck.
Calculate the volumetric weight of your package using this formula:
(Length × Width × Height in cm) ÷ 5000 = Volumetric Weight in kg
Here’s a practical example:
Your 5kg package measuring 50cm × 40cm × 30cm has a volumetric weight of 12kg. Since carriers charge whichever is higher, you're essentially paying to ship 7kg of nothing but air.
Trim these costs by:
- Right-size your packaging: Ditch the one-size-fits-all approach. That small t-shirt doesn't need a box fit for a winter coat. Zappy's system suggests optimal packaging sizes so you're not playing a costly guessing game.
- Embrace flexible packaging: Poly mailers and padded envelopes conform to your product's shape, reducing dimensional charges dramatically.
- Consolidate when possible: One optimized package often costs less than two smaller ones.
- Mind the void: Necessary protection is important, but excessive padding is just expensive fluff.
By optimising for volumetric weight, businesses typically slash shipping costs without changing carriers or negotiating new rates.
3. Buy packaging materials in bulk
Small businesses often fall into the packaging trap – buying packaging materials at eye-watering retail prices while wondering why their margins keep evaporating.
It’s the equivalent of buying all your groceries from the dairy.
Consider these common costly mistakes:
- Grabbing boxes from the local office supply store (at 3-4x wholesale prices)
- Using standard desktop printers for shipping labels
- Purchasing packaging materials on an "as-needed" basis
Packaging economics are like everything else – volume unlocks value.
With Zappy, you gain:
- Wholesale pricing access: Tap into bulk-order packaging materials without massive minimum orders or storage headaches
- Professional-grade shipping labels: Access thermal printing options that eliminate expensive ink costs while producing more durable, professional-looking labels
- Consistent brand presentation: Use higher-quality materials that enhance your unboxing experience without the premium markup
- Equipment discounts: Save on specialised tools like label printers that pay for themselves through efficiency and reduced consumable costs
Remember: While packaging might seem like a small piece of your operational puzzle, it's often where significant savings hide in plain sight.
4. Boost conversions by giving customers options
The secret to reducing shipping costs isn't just finding the cheapest rate – it's structuring options strategically.
Sometimes, the winning formula is locking in an affordable base shipping cost, but providing a list of options for customers to pay extra when they want express.
Here’s how that works with Zappy:
- Secure your base rate first: Lock in competitive prepaid shipping rates through Zappy for your standard delivery option. This becomes your cost foundation and the rate you're willing to cover as a business.
- Layer premium options on top: Add faster delivery options where customers pay only the difference between your base rate and the premium service.
- Your prepaid standard shipping costs: $7.50 (3-5 business days)
- Express shipping actual cost: $12.50 (1-2 business days)
- Customer sees: Standard ($0) or Express (+$5.00)
- You pay the $7.50 base rate either way, but customers wanting faster service cover just the $5 upgrade cost.
- Implement free shipping thresholds: Set a minimum purchase amount that makes free shipping profitable – "Free shipping on orders over $150!"
This approach increases your average order value while making customers feel like they're getting a deal. Win-win!
5. Automate shipping processes where possible
Many Kiwi and Aussie online retailers spend hours each week on shipping operations tasks that could be much faster and more accurate if automated.
Relying on manual data entry for every order can lead to costly mistakes, delayed deliveries, and dissatisfied customers.
Here are some helpful examples of what you can automate using delivery management software:
- Order synchronisation: Integrate Zappy with your e-commerce platform and watch orders flow automatically into your shipping dashboard, eliminating manual data entry and reducing errors.
- Courier selection: Zappy's algorithm instantly compares available carriers for each delivery address, providing you with the most cost-effective options based on package dimensions and delivery timeframe.
- Label generation: Batch-print shipping labels with a single click instead of processing orders individually – this can dramatically reduce their daily fulfillment time.
- Customer notifications: Automated e-commerce order tracking keeps customers informed without requiring staff intervention, reducing "where's my order?" inquiries while improving customer experience.
- Reporting insights: Access consolidated shipping data to identify patterns and optimisation opportunities.
By implementing these automation strategies, your shipping processes can scale smoothly with your business growth without proportionally increasing your workload or error rate.
Make shipping your competitive edge with Zappy
The best e-commerce brands don’t see shipping as a cost, they see it as a growth lever that boosts conversions, builds loyalty, and sets them apart.
In the fast-moving NZ and AU markets, an optimised shipping strategy isn’t just nice to have – it’s a competitive necessity.
Turn shipping into your advantage with Zappy.
Shipping cost FAQs
How do I make shipping cheaper?
Streamline your packaging to reduce weight and size, use a shipping aggregator like Zappy to access bulk rates, and offer options like local pickup or flat-rate shipping to keep costs predictable.
How do I minimise my shipping cost?
Compare rates across couriers, negotiate better deals based on volume, and consider zone-based pricing to avoid overcharging for short-distance deliveries. Tools like Zappy help automate this process and find the best rates.
Why is shipping so expensive in NZ?
There are many factors contributing to this, but some of the biggest ones are New Zealand’s distance from major markets, a relatively small population, and limited competition among couriers driving up shipping costs. Optimising your logistics and using a platform like Zappy to access pre-negotiated bulk rates, automate tasks, and find opportunities to cut costs can help.
How to negotiate shipping costs?
Leverage your shipping volume, build relationships with multiple carriers, and use rate benchmarking to push for better deals. Zappy does the hard work for you by securing wholesale shipping rates that small businesses usually can’t access on their own.