Inventory how-to
How to lower freight costs per unit
You lower freight cost per unit mainly by ordering bigger, less frequent shipments and by consolidating orders with the same supplier or carrier.
Short answer: You lower freight cost per unit mainly by ordering bigger, less frequent shipments and by consolidating orders with the same supplier or carrier. The tradeoff is you hold more inventory, so you need to check that the extra holding cost is smaller than the freight you save.
Order in fuller quantities
Freight is often charged per container, pallet, or truck, not strictly per unit. If you order half a pallet, you pay close to the same freight as a full pallet but spread it over fewer units. Ordering to case pack or pallet quantities, instead of rounding down to the minimum you need, usually lowers your cost per unit.
Consolidate orders and timing
If you buy from one supplier across several SKUs, combine those into one purchase order and one shipment instead of three or four smaller ones. The same applies to timing: if two products from the same supplier are both due to reorder within a week or two of each other, push the earlier one out slightly (if stock allows) so they ship together.
Compare carrier and shipping method tradeoffs
Air freight is fast but expensive per unit. Sea or ground freight is slower but cheaper per unit, provided you order early enough to cover the longer lead time. If your supplier offers a choice, model both: higher freight now versus carrying more safety stock to allow slower, cheaper shipping.
Watch the holding cost tradeoff
Lowering freight per unit by over-ordering can backfire if the extra stock sits for months before it sells. Compare the freight saved per unit against the cost of capital and storage for the extra units before you commit to a bigger order.
Step by step
- List your SKUs by supplier and look for ones with lead times close together.
- Check your supplier's case pack and pallet quantities and round orders up to those instead of stopping at the minimum.
- Ask your supplier or freight forwarder for a per-unit cost at a few different order sizes (e.g. half pallet, full pallet, full container).
- Combine purchase orders to the same supplier into a single shipment where lead times allow.
- Compare the freight saved per unit against the extra holding cost of the larger order before deciding.
- Build the new order size into your reorder point so you do not run out before the bigger shipment arrives.
- Revisit this every few months as volumes and supplier pricing change.
Worked example
Say a supplier charges $400 freight whether you order 200 or 400 units of a SKU. At 200 units, freight is $2.00 per unit. At 400 units, it drops to $1.00 per unit, saving $200 total. If those extra 200 units sell within two months and your holding cost is roughly $0.10 per unit per month, that is about $40 in holding cost against a $200 freight saving, so the bigger order wins.
How SteadyShelf helps
SteadyShelf suggests order quantities rounded to your supplier's case packs and minimums, which naturally pushes you toward fuller, more freight-efficient orders. It does not calculate landed cost or freight-per-unit directly, so you still need to compare freight quotes and holding costs yourself outside the app.
$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related guides
- How to manage end of season inventory
- How to manage inventory as a one person Shopify store
- How to manage inventory for a product being replaced by a new version
- How to label shelves and bins
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FAQ
Does ordering bigger always lower freight cost per unit?
No. Below a certain size, freight may already be a flat minimum charge, so bigger orders help. But once you are filling a pallet or container, further increases usually do not reduce the per-unit rate much further, while holding cost keeps rising.
Can combining orders from different suppliers lower freight?
Only if they ship through the same freight forwarder or consolidator who combines cargo from multiple suppliers into one shipment to you. If each supplier ships separately, combining purchase orders across suppliers will not reduce freight on its own.
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