Are you wondering how you can reduce the landed cost of a product? Perhaps your product costs are through the roof and you need to sell something that gives you a bit more of a profit.
The landed cost of your product is the total cost that you, as the supplier, pay associated with a product from the time it’s made until the time you had it off to your customer. So let’s talk about how we can reduce them:
Find Great Suppliers
If you’re trying to reduce the landed cost of a product, it pays to look at your suppliers. Whether you’re purchasing raw or finished goods, it’s a great idea to go back to your contracts and see if you can get a better deal.
If there’s nothing more that can be done, there is the option of looking for new suppliers that can provide your goods at a cheaper price as well. Other great options can be finding a local (or not international) supplier because that will help with shipping and import costs as well.
Find Great Shipping Partners
Shipping is a HUGE expense, especially if you’re running products all over the world. But not all shipping partners are equal in price and quality. So, sometimes cutting costs means seeing if there’s a better deal.
In the long run, a shipping partner that gets things to their destination when it’s supposed to be there will save you money because you’ll have less customer complaints. So, you don’t want to simply go with the cheapest option. But price does have to factor in.
Optimize Your Warehouse Operations
Your warehouse is a massive expense in your product operations. It’s where you store all of your items before they make their way further to your customers. And many warehouse operations aren’t optimized fully.
Are you keeping too many products on site? Are there ways you could cut warehouse costs by outsourcing tasks? Can you never find anything? An organized warehouse that keeps what you need instead of what you think you need will help cut costs.
Reevaluate Your Logistics
Your warehouse is a complex operation and the logistics is how you coordinate it all out. That means everything from what happens when product or raw goods arrived, who does what, and how it gets back out the door.
Is there a possibility for you to better manage your warehouse staff. Or perhaps you can try a service like dropshipping which could eliminate your logistics costs fully? No matter how efficient your team is, there is always an opportunity to improve.
Invest in Good Inventory Management Software
Believe it or not, your inventory management software can make a huge impact on your budget—both negative and positively. And you best bet that you need to get a good software for your organization.
Good inventory management software can reduce complications and help you save time and money in the long run. Especially if you have a large busy warehouse. It helps with organization and overall management.
How do you reduce the landed costs of a product? Share your tips and tricks below!
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Tae started out as a journalist before following the money into the corporate world. But it turns out that the grass isn’t always greener and now you can find her spending most of her time writing about all the things she loves. Namely, money, travel and business with a hefty dose of self-deprecating humor. She is a podcast fanatic, blogging aficionado and loves to find new ways to turn passions into cold hard cash!