Shipping is typically 26%-50% of Cost of Goods Sold depending on which print on demand market segment you are in – with higher value photobooks at the lower end of the range and apparel and merchandise at the upper end.
As a big cost driver, managing shipping costs effectively is a necessity for margins but also a potential source of advantage. Unfortunately far too many businesses accept standard agreements from a limited panel of logistics providers, but there are alternatives to win back power and control.
Shipping complexity and getting back control
The wide spread of items in print on demand with potentially widely divergent SLA, cubic, shipping weights and local/metro/remote variables means that it is complex to manage shipping. That complexity can erode (potentially significantly!) your margins. Traditional practices of handling shipping costs – awaiting invoices and reconciling them long after goods are dispatched – just don’t cut it in an industry as dynamic as ours.
There are 4 key steps to giving you back control:
- Get shipping bids in advance
- Dynamic ship selection
- Order association
- Automated reconciliation
1️. Get Shipping Bids in Advance
Traditional shipping cost management – waiting for invoices and reconciling costs after dispatch – is outdated and costly. It is important that a change be made to get real-time shipping quotes. Most logistic providers now provide API’s and Endpoints that enable estimates to be pulled or pre-consigning of shipments (that can be later cancelled). Using one of these techniques (and having a platform like ZenSmart to do it for you) allows businesses to:
- Estimate shipping costs upfront and integrate them into pricing models
- Tag every order, line, and consignment in the ERP, MIS, or POMS with an expected shipping cost.
- Set more accurate customer shipping charges and define intervention thresholds for supervisors before costs spiral.
This proactive approach ensures shipping costs are managed, not accepted, giving businesses greater financial control.
2️. Dynamic Ship Selection to Least Cost to SLA
Knowing shipping costs in advance enables real time, dynamic, least cost decision-making:
- If you are dynamically pulling shipping cost you can real time select the best provider for each shipment to least cost rather than defaulting to a single carrier
- Bid acceptance can be optimized for service levels – balancing speed and cost for different order types
- But doing this for the ship team is as simple as a barcode scan – everything is automatically and transparently done.
Instead of treating shipping as a fixed cost, it becomes an active lever for profitability.
3️. Order Association
With shipping costs estimated upfront, businesses gain the ability to match costs to each order in real time. This leads to:
- Accurate profitability tracking at an order and product level.
- Greater accountability for shipping-related expenses.
- Better cost forecasting for long-term financial planning.
By linking every shipment to a precise cost object, companies move beyond guesswork and reactive cost management.
4️. Automated Reconciliation
Errors in shipping invoices are common but often unnoticed. Over time, these add up, eroding profitability. With an automated reconciliation process, businesses can:
- Compare quoted vs. actual shipping costs and flag discrepancies.
- Ensure they’re only paying for services as agreed, avoiding overcharges.
- Use data-driven insights to renegotiate rates with providers based on real usage patterns.
Capturing accurate, granular data isn’t just about today’s cost savings – it builds a foundation for long-term shipping efficiency.
What this approach means
We have seen 6 figure savings achieved through applying these techniques. In print-on-demand, where margins are tight and competition is fierce, precision in cost management is non-negotiable. The right data and automation tools can transform shipping from a profit drain into a competitive edge. The beauty of the techniques I’ve outlined above is that they are almost completely automated. Once the initial rule base is setup – day to day achievement of the significant savings is transparent to users.
