Shipping · Couriers
Seven Ways to Cut Shipping Costs Without Slowing Down Delivery
Shipping is often the second-biggest cost after the goods themselves. These are the changes that usually save the most, roughly in the order we would try them.
- (Author)
- Rafael Ostrowski
- (Published)
- (Reading)
- 3 min
- (Section)
- Shipping
In this guide 7 sections
For many online businesses, shipping quietly becomes one of the largest lines in the cost base. The good news is that most of the savings come from a handful of changes, and none of them require a slower service for customers. Start by pulling three months of shipments: parcel sizes, weights, destinations and what you paid for each.
1. Right-size your packaging
Couriers commonly price on dimensional weight, so an oversized box costs money on every shipment even when the product is light. Keep three or four box sizes that fit your best sellers snugly, and use padded mailers for anything that does not need a box.
2. Ask for a rate review
Published rates are a starting point. Once you ship regularly, ask your courier account manager for a review, with your monthly volume and parcel profile in hand. A competing quote helps, and so does committing to a minimum volume if you can meet it.
3. Use more than one carrier
One courier is rarely cheapest for every parcel. Many businesses use one service for small, light items and another for heavier or larger ones. Shipping software can choose the cheapest option per order automatically.
4. Read the surcharge schedule
Fuel, residential delivery, remote area, oversize and address correction surcharges can add a meaningful amount to the headline rate. Ask for the full schedule before you sign, and check your invoices against it for the first few months.
Watch the address corrections
Some couriers charge a fee when they have to correct a bad address. Validating addresses at checkout usually costs less than paying those fees.
5. Set a free-shipping threshold, not free shipping
Free shipping on everything is expensive. A threshold set a little above your average order value encourages larger baskets, which spreads the shipping cost over more margin. Test the number rather than guessing.
6. Ship less often, in bigger batches
If you ship from your own premises, a daily collection is usually cheaper than ad hoc drop-offs, and batching packing into set times saves labour. Customers rarely notice a cut-off time if it is clearly shown.
7. Know when to hand it over
Past a certain volume, a fulfilment partner's negotiated rates can beat yours even after their fees. Our guide to choosing a 3PL covers how to compare the real costs, and our returns guide covers the other half of shipping spend.
The cheapest parcel is the one that fits the product, not the one that fits the shelf of boxes you already bought.
Whatever you change, put the new costs into your cash flow forecast: courier invoices often arrive weekly or monthly in arrears. National postal services publish their business rates, for example USPS shipping options, which make a useful baseline when you negotiate.
