Last week I wrote an article on how to lower your PayPal fees and this week I wanted to share with you some tips on how to save on shipping costs from your e-commerce site. As you know, if you ship products to your customers (which most of you do), shipping charges can really add up!
Here’s a quick tip that you can implement right away to save on shipping charges
If you are shipping packages that weigh less than two pounds, it’s best to use the USPS services (First Class or Priority Mail). If you are shipping packages that weigh more than two pounds (usually for wholesale orders), it’s best to open an account with FedEx or UPS since, at this weight, they are less expensive than the Post Office.
If you go this route, make sure to sign up for a UPS or FedEx account online (at www.ups.com or www.fedex.com) and print your labels ahead of time instead of going directly to their physical store. You’ll pay up to 50% more if you ship directly from the store without an account. You can still drop them off at their store to be picked up, but make sure to already have a label that’s already been printed and pre-paid online.
Also, keep in mind that it costs less to use FedEx and UPS to ship to a commercial/business address than it does to ship to a residential address. And, stores like Mail Boxes Etc. charge A LOT of fees to ship your products, so avoid them if possible.
How to save on shipping – More than 30 tips
Safety is our priority
I ship two main things. Glass terrariums, and terrarium kits (bags of soil, gravel and moss – no glass). Due to the fragile nature of glass, these have different requirements, which affects how money can be saved. Each business will have different requirements. For me, it is safety which means I need a reliable service which offers tracking and has a low rate of lost parcels. For my terrarium kits, delivery time is important to ensure the moss does not die, but also cost, as the item is only $10, shipping must be cheap. Packaging – this is part of the process, reducing your packaging cost is a great way to save on delivery. This can also reduce size/weight which can decrease costs for some services. A good example would be ensuring your box is just the right size for your product, or looking for a cheaper alternative to void fill (packing peanuts) such as newspaper. – Thanks to Adam from Geodesium
Avoid locking yourself in one carrier
The best way to save money on shipping and postage is to avoid locking yourself into one carrier. Instead, we recommend choosing the best carrier for each order individually. While it may seem time and labor intensive to reassess your shipping choice every time you receive an order, different shipping carriers can offer drastically different rates based on the weight, dimensions, and destination of your package. USPS, for example, doesn’t charge residential fees whereas FedEx and UPS do. That can add up to a substantial amount of money over time. By leaving yourself open to all your options, you’re better able to cut costs and go with the most advantageous rate. – Thanks to Dave from OnlineLabels.com
Use USPS flat rate boxes
We use USPS flat rate boxes to mail our packages. We also use a service called ShipStation, which syncs up with our website and allows us to create labels easily. Using this gives us discounted rates on our shipping as well. I was a bit skeptical about the flat rate boxes at first, however, they seem to be the cheapest option for us. We sell skin care and beauty products so they tend to be on the heavier side, and after doing a lot of research, we found that these would work the best. I have no complaints so far! – Thanks to Stephanie from DermWarehouse
Use zone skipping
The most effective method to save in our business is zone skipping. We ship rather large products, so dimensional weight and even actual product weight make our rates quite expensive when shipping across the country. Zone skipping is a consolidation service where you gather all the packages going to a distant region and send one LTL freight shipment (in our case) to the consolidator offering the service in that zone. The consolidator then ships the packages from their distribution center to our customers within that same zone, drastically bringing down shipping cost per package. Of course, this does not work for express shipments, but the savings from zone skipping help us cover the high cost of express when needed. – Thanks to Mario from CeremonialSupplies.com
Send by freight
One of the things we do to save on shipping is send by freight instead of UPS or Fedex. For this to work the order needs to be large enough to make sense. You can even split up an order on different freight trucks, but only do this if the customer agrees to it as they may arrive at different times. – Thanks to Dustin of ShippersSupplies.com
Negotiate with multiple carriers
Shipping cost is one of the most important factors to staying competitive in the e-commerce’s industry. Through experience I was able to find ways to trim my shipping cost. Most small business owners are unaware they have negotiating power. Don’t be afraid to negotiate with multiple carriers to see which company will give you the lowest rates. Because when carriers know they are vying for your business they will have an incentive to offer more competitive pricing. Let the carrier agents know about your business and give them a brief rundown on your strategy to grow. As shipping rates are determined by your volume. Another thing to help lower your cost of shipping is by using packaging provided by the carriers. UPS, Fedex and USPS all offer free boxes and bags. I was able to save over 65% of my packaging cost just by switching to Flat Rate Boxes provided by USPS. You can also use recycled packaging to lower your packaging cost. Remember to always negotiate for better rates as your business continues to grow. – Thanks to Lisa Chu from www.blacknbianco.com
As a small e-commerce business owner, I’ve often struggled to pay for packaging to ship my products. I’ve managed to save money on packaging costs simply be reusing packaging that I get in the mail. Bubble wrap, packing peanuts and boxes can all be expensive when you’re having to buy them regularly, but these items can all be reused multiple times. I even ask friends and family to give me their spare packaging too! – Thanks to Max from Fish Tanks Bank
Ship by First Class Mail
There a number of different ways to ship products. Which shipping option is best for your business obviously depends on the size, shape and weight of what you are shipping. For most businesses shipping tangible products, they will either use USPS First Class Mail or USPS Priority Mail. First class mail is usually cheaper so if your products qualify for first class mail, use that instead of priority mail. Don’t pay for a more expensive shipping service than you need to! – Thanks to Andrew from The Kratom Connection
Belong to a professional association
If you belong to a professional association, see if they have negotiated a discount with major private carriers. I enjoy a good discount with UPS, one benefit provided by by Green America, a nonprofit membership organization promoting ethical consumerism, which I joined. –Thanks to Reena from Eco-Artware.com.
Be as accurate as possible with weights and descriptions
We have found that the best way on how to save on shipping is to be as accurate as possible with our weights and descriptions. The more accurate we are the consumer saves by not being over charged and we save by not under estimating what our shipping will be. – Thanks to Jennifer from ShowMeDecorating.com.
Know your box size
Know your box sizes, especially if you ship both fright and ground. Make sure boxes than are small and light enough to be shipped ground do get shipped ground — this is a common mistake many shippers make, assuming that a large/heavy box should go freight. Obviously, the more boxes that get shipped ground the more money you will save, but also, the better your customer service will be because freight shipments can be a customer service nightmare. – Thanks to William Shuhaibar from TheBathOutlet.com
Outsource your shipping
Purchase a label printer
Ship Boxes by Cubic Weight
Use FedEx SmartPost or UPS SurePost
Use discounts from a fulfillment center
Fulfillment centers like ShipMonk can negotiate a better rate with couriers due to greater shipping volumes. Additionally, not only will you benefit from their expertise, you can also leverage the fulfillment service’s negotiating power on packaging and shipping costs. – Thanks to Kevin from ShipMonk.com
Use FBA (Fulfillment by Amazon)
Consolidate your packages
Be strategic about the location of your fulfillment center
Ship books by Media Mail
Use a service like Shipwire
Get your shipping labels online
Use Priority Mail
Use a scale
Use a scale prior to applying postage to every package. We’ve discovered those who pick & pack become accustomed to applying the same amount of postage to similar shipments, but it’s easy to be deceived by small items. Since we ship via USPS almost exclusively, applying postage for 1 fewer ounces than needed can result in a returned package, added postage expense and an unhappy customer. Placing postage for an extra ounce is unnecessary and adds up over the course of a year. Getting it “just right” has had a positive impact on our bottom line and on our customers’ delight. – Thanks to Mark from www.visacuity.com/
Use multiple carriers
In order to see the biggest savings on shipping costs, we use two carriers. We ship our heaviest goods (2-20 lbs) via Fedex, using a corporate account (Fedex gives discounted rates), we ship anything under 2 lbs USPS Priority (for roughly $5 per package), anything smaller and lighter than a 1 lb, we use First Class Mail USPS (usually less than $2). We did this for a couple reasons: 1- Fedex is the least expensive major parcel carrier, and does not charge extra to pick up at a commercial location. 2-USPS provides free Priority shipping supplies and free pickup from residential and commercial locations. 3- We carefully monitored and balanced rates and carriers to ensure that we are getting the best price using the above formula. – Thanks to Audrey from www.stop-germs.com/
Package it efficiently
My number one tip for saving money on shipping orders is to package your items in smart way. I have found that it is best to that is not too large; your item should fit in it comfortably with out too much empty space. To ensure my chocolates make it to their destination without loss of quality I have to include ice packs and make sure the items with not be damaged in shipping. Using light and airy packing material also helps to have on shipping costs. If this is not possible, making use of the flat rate boxes from USPS is a great way to go. I like my packages to have an aesthetic feel to them when the are opened so placement of items in the boxes is important to me. By using, or reusing, air packets this helps to keep my products in top shop and I can save money on supplies when I reuse them from materials I have ordered. – Thanks to Christopher from http://sinfulsweetsonline.com/
Use Etsy’s shipping service
I sell on Etsy and they give me the option of printing out a shipping label right from their site. I find that it is about half the cost of the post office and they mail a tracking number directly to my customer. By having all the tracking numbers emailed for me and the labels printed out at home, I can ship out my orders at any time, even if the post office is closed. This option saves me the most of amount of time and money, and as all small business owners know, every dollar we can save is one dollar closer to success! – Thanks to Jenny from www.shesacrafty1.etsy.com/
Our ecommerce store is on the Shopify platform. For $15.95/mo we got an Encidia account which reduces our shipping costs considerably. Packages under a pound ship First Class Mail for around $2.75 (boxes are 6″ cubes) and packages over a pound ship Priority Mail for around $5.50. It integrates with the shop to eliminate potential typos and deals with the customs labels for International shipments. Shipping Easy is also available outside of Shopify or a store integration. – Thanks to Jen from hwww.purseandclutch.com/
Buy your packaging in bulk
Buy all your packing materials in bulk, and be thoughtful about it. At eLUXE, packing materials (shipping boxes, paper receipts, tissue paper, etc.) are an integral part of our customers’ experience: they need to be beautiful and stylish so that the customer feels as if they’re opening a present! Whether you’re shipping in branded boxes or clean and simple brown ones, equipment and supplies are expensive, and it’s tough to balance a palatable cost with materials that fall within your brand’s guidelines. The best you can do is to look at your historical data and put your analytics cap on: how many boxes typically ship out monthly/quarterly/yearly? What is our projected growth rate and how will this affect our outbound volume? Take the time to hunt for the best deal based on your findings (often the best deals are offered online), and buy deeply (if you don’t get through all your materials this year, you will next year). If don’t have the data to refer to, don’t be afraid to look ahead and guess — it takes time to get it right. – Thanks to Samantha from www.eluxe.ca/
Know your weight
Save money on shipping by using Fedex for purchases over five pounds. For packages under five pounds, get savings by using USPS. Use the lightest box or bag as possible since some boxes can weigh three pounds or more. Save money by using a box that fits your product exactly, so you are not paying shipping on the unused cardboard space. To reduce the cost to Canada by USPS, we pack our weighted blankets in the smallest box possible since Canada Post factors in box dimensions in the cost. – Thanks to Eileen from www.cozycalm.com/
Ship online, not at the store
My best tip to save on shipping orders from e-commerce stores is to ship online. For USPS orders, we use Stamps.com which allows us to save time and money by being able to do everything from our home. We also receive the online price versus the in person price by going this route. In the event that we have an order that’s too big for USPS, we ship UPS as you can usually find groups that offer discount plans (such as the Handcrafted Soap and Cosmetics Guild) that allow you to save up to 30% which is huge when you’re shipping packages on a regular basis. – Thanks to Ashley from www.thegnarlywhale.com/
When we decided that we wanted to do free shipping for our customers we needed to find the most cost effective way. We met with UPS and Federal Express and couldn’t believe how expensive it was to ship with them compared to the United States Postal Service. We decided on going with the good old United States Postal Service and have been so happy. For the first year we were in business I spent my days going back and forth to the post office and getting used to waiting in lines and small talk with the Postal workers. About six months ago, I looked into Stamps.com and was so surprised at the discounted rates that we could have been taking advantage of all along. Not only are we saving money, but also saving a lot of time. No more waiting in lines! –Thanks to Stacy from www.rainraps.com
Don’t pay for insurance
When choosing shipping options and looking at how to save on shipping, it’s important to consider insurance costs. We’ve shipped thousands of boxes, and only had two lost packages. So the likelihood of a package getting lost or stolen is pretty low, and we can keep costs down for everyone by insuring only high value packages. For lower value packages, we assume the risk of loss ourselves. We also manage risk of loss by sending packages that look “boring” on the outside. – Thanks to Adrianne from TurtleLove.com
Use the right type of Priority Mail
Many e-commerce sellers use USPS Priority Mail for packages under 5 lbs. going to a residence. But did you know there are three types of Priority Mail that can help you with how to save on shipping? With regular Priority Mail, Priority Mail Flat Rate and Priority Mail Regional Rate, it is hard to figure out which service is the best option to save money. Make sure you research all Priority Mail options before you print your shipping labels. Hint: Priority Mail Regional Rate Box A is usually the cheapest option for packages weighing 3 lbs to 15 lbs. – Thanks to Eric from www.stamps.com
If you have an American Express card and ship via FedEx, you can save 5% each time you bill your shipment to your American Express card. I saved hundreds of dollars over the last four years doing this.
Do you have any tips for saving on shipping charges? Please share them below.