In 2019, the United States Postal Office determined that small businesses spend an average of $359 per month on shipping costs. Every year, carriers have been raising their prices, and eCommerce businesses experience the brunt of it.
Competing with corporations like Amazon who offer free, fast shipping, only leaves small businesses looking for ways to replicate a quick shipping process from home without paying the hefty prices.
Reduce Shipping Costs as an Ecommerce Business With These 6 Methods
Want to reduce shipping costs for small businesses? Here are six effective ways to lower the cost of shipping.
1. Look For Cheap or Discounted Supplies
Shipping carriers, including USPS, FedEx, and UPS, will provide you with free shipping supplies such as boxes and envelopes.
The downside is that whoever you get the supplies from, you have to ship with them. Trying to use a USPS package because you like the dimensions but then shipping with FedEx because the prices are lower technically violates their terms of service.
Businesses have been able to get around this by wrapping the boxes in brown tape or paper or flipping them inside-out, but this can be dangerous territory.
Additionally, in a world of online shopping, chances are you have an excess of shipping materials around the house. It's easy to reuse boxes as long as they fit what you're sending. Just make sure you remove the original shipping label.
If you're continually shipping fragile items, you can easily reuse bubble wrap for your products. You can also purchase supplies in bulk to save money.
2. Measure and Weigh Your Packages
The price of shipping is determined by the distance, weight, and diameter of your package.
If you're printing labels and shipping from home, consider investing in an accurate shipping scale that will help you cut shipping costs by eliminating the need to guesstimate or use an unreliable bathroom scale.
Dimensions are the second determinant of how much shipping will cost. Even if your package is lightweight, shipping will cost more if it's in a large box. Use a package that is close to your product's size so that you're not paying any more than you have to.
Conversely, some businesses only use flat rate shipping, which remains the same price regardless of dimensions and weight, but this can be more expensive than regular shipping in some cases.
3. Schedule Packages for Pick-Up
A great way to reduce shipping costs for small businesses revolves around scheduling. All of the leading shipping carriers offer free package pick-up. If you choose to have the packages picked up during regular mail delivery, it doesn't cost anything extra, and you can have a multitude of containers picked up with no additional cost.
This will save you time and gas, as you no longer have to travel to the post office or drop-off locations.
4. Use Hybrid Shipping
Hybrid shipping like that offered by third-parties like Easyship is a process that mixes mail carriers to cut costs.
For example, shipping internationally to Europe may cost nearly fifty dollars with USPS, but you can switch to an international mail carrier to save money. If that international carrier doesn't have a shipping station near you, though, then you can start the process with the USPS and have it handed off to the international carrier at a checkpoint.
While this saves money, it results in longer shipping times and can deter customers looking for quick delivery. Important to note as well, there are restrictions on weight, volume, and dimensions.
5. Ship Through Your Selling Platform
You can buy and print labels through selling platforms, saving you time, but most importantly, the connections they have save you money. Instead of purchasing directly from the mail carrier, purchasing labels through a platform like Etsy saves you money because they receive discounts from USPS, FedEx, UPS, DHL, and more.
When selecting a shipping label, you can also compare shipping rates between companies instead of bouncing between different websites.
If you’re thinking about using Shopify as an Ecommerce platform for your business, our article on starting a Shopify store will help.
6. Ship in Bulk
Shipping in bulk only applies to businesses that ship out hundreds of packages each month. Although it can seem daunting upfront, bulk shipping can reduce shipping costs for small businesses in the long run.
USPS offers commercial rates for businesses that meet a minimum quantity, which varies by mail class (first-class, media mail, parcel select, etc.).
To take advantage of commercial mail prices, you have to obtain a mailing permit, pay an annual fee, and follow a series of instructions such as presorting your mail according to zip code, minimizing package size, and dropping off at a specific location.
Frequently Asked Questions About Reducing Shipping Costs
With the number of mail carriers and third-party options available to small businesses, unanswered questions come with the territory.
How Do I Order Free Packaging?
You can easily order free packaging to be delivered to your home or business by visiting the carrier's website, navigating to their supplies, and placing an order without having to input any payment information.
Do I Have to Insure My Orders?
The decision to insure a package is ultimately up to you. Mail carriers such as UPS will automatically include insurance for a package valued up to $100, but you will have to pay extra for anything more.
Take into consideration the price of what you're shipping, and the likelihood that it could be stolen by researching the area you're sending it to, or if it's evident from the outside of the packaging that the product is high-priced and can easily be resold. If something happens and the order isn't insured, you'll be responsible for replacing it.
There are many ways to reduce eCommerce shipping costs especially for small businesses. You can target your shipping materials, process, or carrier, and make changes to each area to save money. Most of the time, planning is an essential step you can take in your order fulfillment process to save you time and money.
If you're overwhelmed by the sheer amount of orders you're receiving and are struggling with the shipping process, you can visit third-party all-in-one services such as ShipDaddy that will help you get things under control in just a few clicks.
Or, if you're just starting in the eCommerce world and you're not sure where to start, check out our eCommerce Business Plan, which includes a full-length, detailed guide, and an included worksheet to help you get on your feet.