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Options for The Cheapest Shipping for Small Businesses

Shipping costs are rising – and they are a huge expense for eCommerce retailers. Many online businesses are looking for ways to cut down on this expense and find the cheapest shipping options, regardless of the size of the business. If your online store is looking for a way to cut down on shipping costs, here are some tips for finding the cheapest shipping for small businesses available.

What Is the Cheapest Way to Ship Packages for Small Businesses?

It’s scary to think about all the time and effort you’ll have to put into actually making, packing, and shipping your products after someone makes a purchase. However, once you’ve handed it off to the shipping company, you have no more say in the matter.

The shipping company is responsible for ensuring that your package arrives on time and undamaged. The customer may form a negative opinion of your business if they receive a damaged or lost package.

To understand the cheapest options for shipping as a small business, it’s important to understand everything that goes into shipping – which is more than just the postage! 

Shipping costs include the money spent on getting a product to the buyer, like:

  • Boxes, packaging, tape, and shipping labels.
  • Employee salary for order fulfillment.
  • Carrier costs for shipping and delivering items.
  • Import/export fees if shipped internationally.

As an online retailer, you should determine and explain shipping costs on your website. Some of the most common questions you’ll get will be about shipping costs, timelines, and tracking. To get ahead of the questions, creating a shipping policy that sets expectations will help your customers understand how your company works. 

Customers’ purchasing decisions are affected by shipping costs and speeds, in the world of free two-day shipping options on many major online retailers. Baymard Institute is a research group that found nearly half of all online shoppers abandon carts because shipping and taxes are too high.

While you have no control over local sales tax, there are steps you can take to minimize shipping costs in your eCommerce store to keep that sale.

Finding the Cheapest Shipping Rates for Business

When planning a shipping strategy, it’s important to take into account the specifics of the items being sent. Weight, distance, and shipping speed are typical factors in determining shipping costs. There are a variety of flat-rate packaging options available from various carriers that you can take advantage of depending on the size and shape of your products. 

Ship by Package Weight & Size

Shipping costs are heavily influenced by the total package weight. Dimensions, such as cubic feet, should be taken into account as well. United States Postal Service (USPS) First Class Mail is the most cost-effective shipping option for packages weighing less than 1 pound.

USPS Priority Mail is the most cost effective shipping method if your package weighs less than five pounds. FedEx Ground and UPS Ground are likely to be the most cost-effective shipping options for packages weighing more than 5 pounds. 

Ship by Shipping Speed

It’s up to you to give buyers a choice of shipping speeds. Knowing the least expensive options will help you and your customers save money if you plan to offer express shipping options like two-day or overnight shipping. 

Two-day delivery guarantees are not provided by USPS. Check out FedEx 2-Day Shipping for next-day business delivery and UPS 2nd Day Air if you’re interested in providing two-day shipping options to your customers. UPS and FedEx are your best bets for affordable and hassle-free overnight shipping. Major shipping providers have multiple overnight service options. 

Regardless of the specifics of your shipments, a third-party logistics provider (3PL) can help you negotiate the most cost-effective carriers for cheap shipping at faster delivery times. 

What Is the Cheapest Way to Ship for an Online Business?

cheapest way to ship - AMS FulfillmentDepending on where you are and how quickly you need a package delivered, you can choose from several different shipping options. Some options will be cheaper than others:

  • Flat rate shipping: The shipping cost is a set amount, regardless of the package’s dimensions or weight. Each order from a customer will be charged the same flat rate that is determined by the generic package size chosen.
  • Local shipping: Orders are packed and delivered to the customer without using a shipping service.
  • Pick-up: The customer picks up their order from a select location.
  • Free shipping: You as the store owner would cover the shipping cost as part of the purchase.
  • Real-time rates: Accurate shipping costs based on dimensions, weight, and distance are calculated in real-time and displayed at checkout using real-time carrier rates.
  • Same-day delivery: The customer makes a purchase and receives their order on the same day.
  • Overnight delivery: The order arrives the day after a customer places their order.
  • Expedited shipping: Same day, next day, or two-day are examples of expedited shipping, which are methods guaranteed to arrive faster than other shipping speeds. 
  • International shipping: If you’re sending an order to another country, you’ll need to use an international shipping method.

Every company has its own unique shipping needs, so you can choose from any of these methods when setting up your shipping preferences during the checkout process. Some (like flat-rate and free shipping) are great because they help manage expectations for your customer and provide transparency, while others prioritize quick delivery over low prices.

How to Find the Cheapest Shipping Rates for Small Packages

Reduce the weight of packages. Package weight is a major factor in shipping costs. Shipping costs will increase proportionally with the product’s actual weight or dimensional weight. Although it may only be a few cents per package, multiply that by hundreds and you’ll see how quickly the savings add up. This is why saving money on shipping costs and increasing profits is facilitated by using lightweight packaging. 

Tips to reduce package weight:

  • Pack products in corrugated boxes. Stronger and more lightweight than standard cardboard boxes, corrugated boxes are a popular choice for online retailers. The space between the inner and outer layers is filled with air and divided into rows of tiny grooves, reducing the weight of the packaging itself to reduce the weight of the shipment.
  • Use lightweight packing material. Some forms of packaging material are heavier than others, but there is a wide variety to choose from. Air pillows, packing paper, bubble wrap, foam inserts, Versa Pak wadding rolls, and excelsior are all good lightweight alternatives to consider. This should help to keep items packed tight and lower their weight.
  • Design a custom shipping package. The less packing material you need, the more closely your shipping container’s shape and size match those of your items. If your product sells in large quantities, the cost of making a custom container may be quickly outweighed by the savings on shipping.
  • Consider flat-rate packaging. If you need to ship something very heavy, you may want to look into the flat-rate packaging options offered by your preferred carriers. These offer the same shipping price regardless of weight.

You can save weight on every shipment by switching to lightweight packing methods. In the long run, this could increase your profits by a significant amount and be a worthwhile use of your time and energy.

Choose the Right-Sized Packaging

One way to save money on transport is to use different packaging.

It’s easy to find shipping materials that are just a little bit bigger than what you’ll be sending inside. As an alternative to a box, you could use a poly mailer or, if extra cushioning is required, a padded envelope.

The weight and size of the package determine how much it will cost to ship. Since cardboard is so heavy, any area where you can reduce weight will benefit you in the long run. Additionally, doing some research could help you save money if you are paying for your packaging. Many carriers provide packaging at no or low cost.

Knowing what kinds and sizes of packages you use the most frequently can help you save money whether you’re getting your packaging for free or ordering custom packaging. Looking at your order history will help you determine whether you’re selling one item at a time or several. Then, order packaging that would go with your typical orders.

Use Flat-Rate Shipping When Possible

The geometry and cost of shipping containers are constantly changing, but not in a way that will increase your profits. It can be hard for many businesses to keep up with all the changes. Due to rate increases, online retailers are considering flat-rate shipping to reduce shipping costs.

No matter the item’s weight, size, or shape, the shipping fee is always the same with flat-rate shipping. Converting variable costs into fixed costs is the immediate advantage of flat-rate shipping.

Therefore, you are aware of the cost in advance if you decide to ship 10 items that fall within the allowed weight range. You can use this information to set up shipping rates in the checkout area of your store.

Know When Rates Change

Keep up with pricing adjustments to avoid having your profits affected. Every year, shipping companies review their pricing and raise prices to reflect rising costs for things like labor and fuel. Every January, new prices go into effect, but they can also do so at other times.

Having a logistics partner to keep up with rate changes can help you be in the know – and even help negotiate discounts for your packages.

Offer Local Delivery or Pick-Up

Choosing not to use a carrier at all is one way to cut shipping costs. People are now increasingly choosing to shop at small, locally-owned businesses, a trend that has emerged since the COVID-19 pandemic.

Local delivery allows customers to purchase your products from an online store and have them delivered to their homes. Customers could also pick up their online orders in person from your business. You can save money by using local delivery and pick-up instead of shipping with a carrier.

Additional benefits of local delivery and pick-up can include:

  • Make it simpler for locals to buy from your brand and engage with the community.
  • By eliminating shipping delays and variable costs, you can improve customer experience.
  • Boost sales by increasing cart sizes and average order values

Removing the barriers to purchase by offering local delivery options to customers has a positive effect on your bottom line. You have the opportunity to increase customer loyalty and cut shipping costs as well.

The Benefits of a 3PL in Finding Cheap Shipping Costs

cheap shipping costs - AMS FulfillmentIn supply chain management, a 3PL’s responsibilities can include everything from order fulfillment to reverse logistics and quality control services. Because a 3PL is so comprehensive, outsourcing your order fulfillment to a logistics company can relieve you of a lot of responsibility and free up your time to run your business. 

There are many advantages to working with a 3PL in order management to help you lower shipping costs.

Decreased Shipping Distance

Shipping zones range from Zone 1 to Zone 8 for domestic shipments within the United States, with Zone 1 covering a 50-mile radius (and no more) from the fulfillment location. In general, the package delivery time and cost will increase proportionally as the package’s distance from the shipping zone’s origin increases. If you avoid shipping to higher zones, you can save money while taking advantage of superior shipping options. Working with a 3PL that has multiple, conveniently located warehouses is one option.

More Accurate Packaging & Shipping Strategies

When sending bulky items, you’ll want to look into flat-rate shipping to save money. Right-size packaging is a technique that can be used by a 3PL to help with cost prediction and reduction. Because of the high volume of orders they place with carriers regularly, 3PLs typically negotiate discounted shipping rates for their client brands.

Up-to-Date Information on Shipping Rate Changes

General rate increases (GRIs) are annual price increases implemented by major shipping companies. These increases can be as much as 5% on average but can be significantly lower or higher depending on the specifics of your situation (carrier, service level, weight, etc.).

During busy shipping periods (like the holiday season and the fourth quarter), carriers may impose additional fees. Large package surcharges and signature-required surcharges are just two examples of the additional fees they add every year. 

These rate increases and surcharges can only be avoided in shipping costs by including them in the shipping fee charged to customers, absorbing the costs yourself, or finding some other way to compensate for them. If you’re having trouble estimating your shipping costs, or figuring out how to factor them into the price of your product, working with a 3PL that monitors changes in carrier prices can be a huge help. 

Discounted Shipping Rates

An experienced 3PL will offer discounts based on shipping volume, so you can take advantage of those benefits as well without having to negotiate with carriers yourself. A 3PL’s longstanding relationship with carriers allows them to negotiate volume discounts, which they then pass on to their customers.

Discounted Supplies

3PLs can save you money on shipping costs and other packaging expenses. Companies typically invest between 10-40% of the retail price of the product in its packaging. Boxes, dunnage, bubble wrap, airfill, and poly mailers can be expensive, but by partnering with a 3PL, a business can save a significant amount of money.

Third-Party Insurance

Depending on the value of the product being shipped, working with a 3PL can help you save money on shipping by eliminating the need for services like shipping insurance. The shipping insurance offered by a 3PL can often be significantly less expensive than purchasing it independently. If you sell high-value items, this could be a huge benefit for your store. 

Seamless Returns Management

More than $761 billion worth of goods were returned to online retailers in the United States in 2021. For high-volume brands, returns can be a significant source of stress and financial loss. Working with a 3PL that specializes in eCommerce fulfillment shipping services can help you drastically cut down on returns by ensuring that orders are picked and packed correctly.

Reverse logistics management (or returns management) services are another way in which a 3PL can reduce the stress of returns.

Strategic Packaging Strategies

Small, non-fragile items, such as clothing, can often be shipped in a mailer envelope or poly bag. This method is more cost-effective for stores selling lightweight, non-fragile items because it takes up less space on delivery trucks and requires fewer packing supplies like tape and bubble wrap. 

Shipping Industry Changes, Deadlines, & Shutdowns

If you run an online store, it’s important to remind customers well in advance of the deadline for placing orders during your busiest sales periods. To guarantee on-time holiday gift delivery, carriers implement various service cutoff times. Customers can save money on shipping by placing orders as close to the cutoff time as possible rather than opting for faster shipping at a higher cost.

Time constraints aren’t the only thing that can affect deadlines; things like a lack of available workers, bad weather that prevents carriers from delivering, or national holidays that force businesses to close could also play a role. A 3PL can help communicate this to you so your store is prepared for the holiday season.

AMS Fulfillment Can Help Negotiate Low Shipping Costs

low shipping costs - AMS FulfillmentIf you’re ready to partner with a 3PL to lower your shipping costs, AMS Fulfillment is ready to help. From small businesses to large enterprises in B2B and B2C eCommerce, we can help you find the right shipping strategy to reduce expenses, improve efficiency and keep your customers happy.

Get in touch today to start discussing how we can help find the cheapest shipping options for your business.


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