3 Essential Tips to Control Your Shipping Costs

If you open your browser and Google “shipping,” you’ll find more than 2,000,000,000 results trying to tell you how to ship your packages. Choosing a wrong shipping partner or service can be painful for both your profits and your customers.

Apart from trying to create the best shopping experience for their customers, online sellers are ceaselessly seeking the most cost-effective shipping solutions. Here are three ways to control your shipping costs without compromising quality, speed or the overall customer experience.


Tip 1: Compare shipping rates and services

All three major carriers (UPS, FedEx, USPS) will raise their shipping rates annually. This generally occurs in January. Such rate changes include an increase in fuel and other surcharges, which can  impact your shipping costs and business profit margin. Recheck rates often.

According to Circle.us, 83% of users have two shipping partners, 9% have all three shipping partners and only 8% choose to have one. Instead of having one shipping partner, having several shipping partners seems to be the wise choice.

Here is a quick comparison of the most popular services of the three major carriers. UPS Ground promises “day-definite delivery typically in 1 to 5 days” to all 50 states and Puerto Rico, whereas FedEx Home Delivery promises shipment in 1 to 5 business days within the contiguous United States and 3 to 7 business days to and from Alaska and Hawaii, but with the convenience of delivery on Saturdays. Priority Mail Express is the United States Post Office’s version of next day delivery except that it isn’t always next day. Unlike FedEx and UPS which guarantees next day delivery, USPS will take 1-2 business days depending on location. However, Priority Mail Express provides a free pickup service.


Tip 2: Watch out for additional charges

If you have done your homework as a new shipper, you know there are some surcharges, like signatures, Saturday delivery, address correction fees, and so on. To fight such potential fees, be proactive and make sure you are clear about when you have to pay and how much you have to pay. Below are a few common additional charges you may neglect to account for.

Additional Handling
Most people believe packages over 70 lbs will incur an additional handling surcharge, but what most people don’t know is that weight is not the only factor. It also has something to do with the package dimensions.

For example, an Additional Handling charge of $10.50 per package with the longest side exceeding 60 inches (48 inches for Ground packages) will be assessed for any package that requires special handling as determined by FedEx and UPS. Since USPS shipments can’t exceed 70 lbs and in most cases, the maximum combined length and girth is 108 inches, there won’t be any additional handling surcharge.

An effective way to avoid such charge is to pack your products in several packages instead of just one, if possible.

Residential Delivery Charge
A residential delivery charge applies to shipments to a home or private residence, including locations where a business is operated from a home, or to any shipment in which the shipper has designated the delivery address as a residence. This charge will not apply to USPS shipments.

Pay attention to FedEx Ground and Home Delivery Services. FedEx Ground is designated for commercial addresses while Home Delivery is for residential addresses. But, if the delivery address happens to be residential, the Residential Charge will be $3.65, unlike UPS Ground, the Residential Charge being $3.25. So before you decide to ship a package with FedEx Ground Services, perform an address check to make sure whether the delivery address is commercial or residential. Optimal shipping and fulfillment software such as Circle.us will automatically perform the address check while you are creating a shipment.

Delivery Area Surcharge
A surcharge applies to each package delivered to certain ZIP Codes within the 48 contiguous states. Those ZIP Codes are either less populated or less accessible than others and carry a higher operating cost. Refer to UPS applicable ZIP Codes and FedEx applicable ZIP Codes. If the delivery address zip code is in the listing, most likely Delivery Area Surcharge (DAS) will apply. This surcharge does not apply to USPS shipments.


Tip 3: Pack your shipment properly

Conventionally, packaging is to shield the product inside from any harm. Over time, eCommerce has injected it with a new meaning – marketing. Some say the best way of marketing is to show your customers that you care. When it comes to online sales, the simplest way to do that is through packaging.

When customers receive their products, they expect more than just a brown box. What’s inside that box could be a beautiful dress they browsed for days or the latest iPhone model. In some way, they don’t just expect a box of protection. They expect a good presentation or rather a good online shopping experience.

But, as online sellers, let’s not forget the basic role of packaging. Packaging is also for protection. Customers will not have a satisfying shopping experience if their products arrive damaged. Many carriers provide packaging guidelines on their websites. Here are the general guidelines from FedEx and UPS, to give you a better idea. Furthermore, carriers will not honor a claim for a damaged package caused by improper packaging.

Take UPS for example. When the damage occurs, UPS will inspect the package and evaluate the packaging according to their packaging guidelines. So it is essential that you pack your packages according to the guidelines.

If you have packages whose weight is less than 16 oz., do not bother shipping with other carriers. USPS First-Class Package Service will be your most suitable choice. USPS First Class Package Service is a fast, cost-effective way to ship lightweight packages weighing up to 15.99 ounces to any U.S. destination. Deliveries can be shipped to any U.S. address, PO Box, and many APO/FPO/DPO destinations. USPS Tracking is included for free and the USPS offers several package pick-up programs.

USPS has another package service similar to First-Class called Media Mail. Media Mail is a cost-effective way to send media materials through the U.S. Postal Service. You can send books, videotapes, DVDs, CDs, printed music and other sound recordings through Media Mail as long as they weigh less than 70 pounds. If you ship media materials less than 8 ounces, it will be less expensive for you to ship your item using First-Class Mail.

There are also some other tricks to save unnecessary costs. Optimal shipping and fulfillment software is designed to help save money and spare you the trouble of searching for the best deals on shipping. Circle.us takes the hassle out of shipping by automating the comparison process resulting in higher profits and happier customers.

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