Did you notice what happened in January? USPS and FedEx raised their costs. So did CanadaPost. These weren’t massive price hikes – only about 3-5%. But it may have been enough to cause you to furrow your brow when you tallied up the month’s expenses.
Shipping costs are unavoidable, of course. But there’s every reason to keep them down. So here are a few ways to do that for your online shop, Shopify store, or your brick-and-mortar business.
Apply even a couple of these, and you’ll more than make up for the price increase from January. You might even trim your costs by 20% or more.
Here's how to save on shipping costs
1. Join a professional organization that offers shipping discounts.
There’s safety – and power – in numbers. It’s true in life, and ends up being true in shipping, too.
There are a bunch of professional associations that offer shipping discounts to their members. Here are just a few:
- The Specialty Food Association gives its members o Up to 29%* on select FedEx Express® o Up to 20% on select FedEx Ground® o Up to 10% on select FedEx Home Delivery®
It costs $300 and up to join.
The National Association of Wholesaler-Distributors offers Up to 36% on UPS Air letters including UPS Next Day Air®* Up to 32% on UPS Air packages (1 lb.+)* Up to 34% on UPS International imports and exports Up to 24% on UPS Ground shipments
Many local Chambers of Commerce also offering shipping discounts.
2. Get a good scale.
If you’ve been guessing about the weights of your packages, please stop. And if you’ve been trying to make do with a bathroom scale for the larger packages, it’s time to upgrade. You need to get a precise weight for every package, or you could be overspending.
Which scale you get should depend on what you’re shipping. If your orders tend to be really light (like less than 4 lbs) a regular light-duty postal scale might be fine. But most scales like that will become useless for packages over 4 lbs.
Look at it this way: A good-quality scale for packages of 4 lbs or less will cost you maybe $30. If it saves you even 50 cents a day, it’ll have paid for itself in two months.
3. Save time, too – get your packages picked up.
Unless you’re a post office nerd, you probably don’t relish running to the post office every day to drop your packages off. So don’t: The US Postal service will pick up First-Class, Priority Mail, Priority Mail Express, International, or Return Service packages for you. It can kind of be a lifesaver.
If the pickup area is secure, you don’t even have to be there when the packages get picked up. Just tell USPS where to find the packages when you fill out that form.
Voilà: One less thing to do.
4. Print your labels online.
Have you been buying your shipping labels at the post office counter, or at one of those self-self kiosks? If so, you’re overspending. It’s cheaper to buy those online, and then just print the labels at home. You’ll save up to 22% on First-Class packages and up to 54% on Priority Mail Express.
5. Consider the weight of your shipping materials.
Know why so many companies use peanuts to fill boxes? Because they’re really light. Same goes for those air pillows you’ve probably seen in some packages.
But what if you can’t afford those air pillows, or you don’t have a spare closet empty to store shipping peanuts in?
Just scrunch it. Some paper, I mean. Scrunch up newspaper, or any light paper. It’ll fill the packages nicely, is super light, and doesn’t cost so much. It’s a great way to keep kids busy, too (though you may need some fun paper to keep them interested).
Almost any paper will do. Ideally, you want it to be just strong enough to hold its shape, but light enough not to nudge your scale.
Word to the wise: Don’t try to shave grams off your shipping weight by using flimsy shipping boxes. Exterior boxes need to be sturdy enough to make it through an occasionally rough journey through the post office.
One way to conserve costs? The poly mailer. If you’re shipping items that aren’t likely to be damaged by a bump (like clothes), a simple poly mailer could shave a couple of ounces off each package. And you could dress it up (ahem) with some custom printing.
6. Use boxes that fit the item.
It may mean you have to buy a couple of different box sizes, but you’ll probably save money in the end anyway. And you won’t be one of those companies that ships a tiny item in a huge box.
7. Consider skipping shipping insurance.
Any package shipped via priority mail is automatically insured for $50. So if your orders aren’t usually worth more than $50, you probably don’t need insurance at all.
For the packages that are worth more than $50, you may want to do some math. (No really – this is math you’ll want to do).
Let’s say your package is worth $100. If it gets lost, you’re out $50. The cost of insuring it for that extra $50 is $2.65.
Not bad, but if you bought insurance for 100 of these orders, it would cost you $265. If you skipped the insurance, you could lose up to five $100 orders and still break even. That’s because you’d be covered for the first $50 of those five $100 orders. And the remaining $50 for the five orders comes to $250.
But are you really going to lose five out of every 100 packages? One out of every 20 packages? Probably not. So maybe you could skip the insurance for $100 packages.
The math would change (of course) for more expensive packages. So maybe you’ll only want to insure packages that are worth $150 or more. It depends how much risk you want to take, how often packages go missing, and how valuable each package is.
8. Use a rewards card.
We’re not sure if this is cheating, or just a creative way to cut your shipping costs. But there are plenty of “rewards card” credit cards that give cash back with every purchase.
Usually it’s only 1%. But some cards give much more (up to 6%) in certain categories. If you pick the right card and if you’ve got the credit rating to qualify for the card, you could finagle a way to get 6% back on your shipping costs.
Just don’t carry a balance, or the interest rates will rapidly eat up anything you’ve saved.
9. Use Stamps.com, Endicia or Etsy’s shipping option.
Some shipping services and sales platforms give generous discounts if you use their shipping features.
For instance, Stamps.com gives its users:
- 26% off first-class package service
- Up to 53% off priority mail
- 10% off priority mail express.
Their site also says you can save up to 40% on package insurance “compared to USPS rates”.
Other sellers have gone with Endicia, which is more sophisticated than Stamps.com (and better designed to support larger operations). They also offer serious discounts.
And then there’s Etsy. According to some sources, Etsy’s “create a shipping label” will let you save almost half the cost of what the USPS would charge.
10. Shop and negotiate for prices.
There’s a thread running through all the tricks we’ve mentioned here: It pays to shop around.
So here’s how to act on that: Open accounts with all the big shippers. Then plug in some numbers and check their prices for the package types and sizes you’re most likely to ship. Usually there are significant differences in price points across the different carriers.
The best choice depends on your business and your packages. And maybe, based on which other deals you can get through the tactics mentioned above. Who knows - maybe all your packages below 2 lbs should go by USPS, while most of the ones over 2 lbs should go UPS… and the international orders should go via FedEx.
Until you do some homework, you’ll never know.
Want to really surprise and delight your customers? See if you can ship their package for less than your checkout cart quoted, then refund them the balance. So if they paid $10 to ship their order, but you can get it to them for $7, refund the $3.
Then send an email notifying them of the refund.
Something like this will cost you a bit to set up. And it’ll take some time and skill to manage. But who would ever forget getting a refund for something like that?
Maybe this isn’t something you can do for every order. Maybe only your very best customers will get this kind of treatment, or you’ll only be able to do it for orders over a certain size. But this kind of white-glove treatment will not go unnoticed. It’s this kind of above-and-beyond care that makes customers stick around.
As you can see, there’s plenty of ways to cut shipping costs. But don’t get totally focused on the money. Service – for your customers and for you – matters, too. It doesn’t help to save 5% on shipping if a certain carrier is awful to work with. And it definitely doesn’t help if you save even 10%, but suddenly your packages are getting lost or delivered late.
Back to you
Got a trick to save on shipping costs that isn’t mentioned here? Tell us about it in the comments.