How to save on shipping with all of those holiday returns
Shipping is one of the highest costs for online businesses. With large eCommerce retailers such as Amazon, Target, and Wal-Mart offering free shipping on a variety of items, it’s difficult for smaller businesses to compete.
As a small business owner or independent contractor, it’s challenging to offer your customers free shipping because it cuts into your profits. But there are ways you can reduce your shipping rates, to save your customers money.
Or, if you insist on staying competitive with your competition, we can offer ways for you to save on shipping costs and still allow you to provide free shipping to your customers.
Educate yourself on weight calculations
Comparing shipping rates with the USPS, UPS, FedEx, and other shipping companies can be a little confusing. When you’re looking at prices, these companies will ask for a couple of different aspects of the product you’re trying to ship to help determine the cost of the shipment. First, let’s look at the weight.
When it comes to shipping, there are two kinds of weight:
- Weight – this is the basic weight of the product you want to ship, measured in pounds or kilograms
- Dimensional weight – also known as volumetric weight, this measures the deepness of the shipping box and is used to standardize shipping costs
Though there doesn’t seem to be that much difference in these methods, knowing how costs are applied, can save you money.
Typically, the USPS uses weight to calculate billing, while most of the other shipping companies like FedEx and UPS use dimensional weight. USPS usually increases its rates with every ounce, while the other companies increase rates by the pound.
To save in shipping costs based on the weight of your package, find a way to cut your shipment weight with USPS. Use a scale to weigh everything that’s going to go into your packaging like the filling, tape, inserts, and bubble wrap. The USPS will automatically upgrade a shipment from “First Class” to “Priority” if the package weighs over 16 oz. Save money with USPS by trying to keep your packages under 16 oz. “First Class” is a lot cheaper, and your package will get to its destination around the same time as “Priority.”
With UPS, FedEx, and others decrease the volume of the box you’re using to ship your item to reduce dimensional weight.
Because carriers who use the dimensional weight to set shipping prices vary depending on the dimensional factor they choose, costs can vary. FedEx, for instance, uses this formula to calculate its shipping:
(length x width x height / dimensional factor)
FedEx’s current dimensional factor is 180.
This formula allows FedEx to charge all boxes as if they are the same density. So, popcorn and charcoal will cost the same to ship at FedEx if the same sized box is used. But, FedEx offers flat rate boxes that are exempt from the dimensional weight, which means if you’re able to use the flat rate option, it’s usually cheaper for you.