If your small business runs any kind of shipping operation in-house, you’re likely familiar with the common headaches that come along with order fulfillment: boxing sold items; taking several trips to the post office or UPS & FedEx stores, dealing with increasing rates, never having enough packing tape, and several more problems which sometimes lead businesses to abandon the process altogether or partner with a fulfillment company. There are, however, several modern methods business owners ought to try before giving up. In this introductory article to our series on shipping and ecommerce, we are laying out concrete strategies to keep shipping costs, and time commitments, low when fulfilling customers’ orders.
Over the past number of years, more and more storefronts began taking online orders and the COVID-19 pandemic forced those die-hard traditional brick-and-mortar shops to adopt shipping to survive. Running a shipping operation in tandem with a traditional storefront is near-Herculean for small teams, so for those teams where every dollar and every minute counts, these tips are for you:
Use Flat-Rate Boxes Provided by Carriers
USPS, UPS, and FedEx all have their own flat-rate shipping boxes you can use instead of your own boxes. Since these carriers all charge by your package’s dimensions, more often than not their flat-rate boxes will end up costing less per shipment. Even better, you can have flat-rate boxes shipped to your business in-bulk and often for free.
USPS in particular offers a near-unbeatable deal for their Small Flat Rate Box. If you are shipping objects smaller than 8 5/8″ x 5 3/8″ x 1 5/8″, you can use a Small Flat Rate box domestically for as low as $8.65 for a fully-insured delivery. The upper weight limit for USPS flat-rate boxes is 70 pounds per parcel.
One downside to using carrier packaging is, of course, the sometimes-aggressive branding covering the box. If you still want your own brand and business personality to shine through, you can simply place your own branded packaging within the box, but you can also do a number of other things inside your parcel to make the shipment memorable and personal. An example of this (and a great tip for small businesses still shipping in house) is to attach hand-written thank you notes to the inside of packages.
Take Advantage of Commercial Base Pricing
If you aren’t already using commercial base pricing to buy postage for your small business’ shipments, drop everything and start today. Commercial base pricing is a program from the USPS (also used by UPS) which discounts shipping rates when you buy postage from an online provider. Discounts for parcels can be lucrative with USPS First Class postage discounted 26% per parcel on stamps.com, one of the most well-known online postage providers.
There are no minimum or maximum postage limits on commercial base pricing, so businesses who ship parcels infrequently can benefit just as much as large ecommerce companies. All you need to take advantage of commercial base pricing is a computer and printer. Extra points if you are using a carrier’s flat-rate boxes! Making these two simple changes are important first steps to running a leaner shipping operation.
Weigh Packages Accurately to the Ounce
If you’ve chosen to take advantage of commercial base pricing postage and print your own shipping labels, it is essential that you use a digital postal scale to make sure you aren’t overpaying for shipping. Without a postal scale you are forced to estimate your parcel’s weight which can only lead to two things: overpaying for postage or getting the dreaded “return to sender due to insufficient postage” stamp. Underestimating postage is a headache for you and your customers but getting an ounce-perfect reading only takes one trip to Staples. Or better yet, new members to Stamps.com can snag a free digital scale for free when they make an account.
Counterpart to weight, measuring your parcels is good for accuracy but also opens another door for savings. USPS charges approximately $16.25 for packages measuring 11 1/4″ x 8 3/4″ x 6″ and then close to $22.65 for packages 12 1/4″ x 12 1/4″ x 6″ not accounting for weight. Meaning if you can shave only a few inches off your packaging, you can massively save on your per-parcel pricing.
See if Prepaid Shipping Works for Your Business
USPS, UPS, and FedEx all offer their own versions of prepaid shipping labels which offer a huge discount when bought in bulk. Prepaying for your postage is a great way to reduce headaches, but also can be quite the gamble for small businesses.
Prepaid postage is fantastic for small businesses that run subscription packages or any kind of item that is consistently sized and consistently shipped. For example, if you run a postal book club where you send the same book to a list of subscribers, prepaid shipping is likely a monstrous money-saver. Being that the company will know exactly how many parcels they will be sending, also since all the packages will be the same size, the company can confidently buy their postage upfront at the beginning of a month and likely save loads of money.
For companies that run more ad-hoc shipping, as in they only ship after orders are made, prepaid shipping may either leave them short or with too many labels at the end of the month. And, companies that sell several differently sized items may run into issues calculating prepaid shipping ahead of time.
Consider 3rd Party Shipping Insurance Companies
If you are still using major carriers’ insurance for your parcels, you’re likely missing out on savings. Parcel insurance is likely one of the last things on your mental checklist before a package goes out, so take this moment to reassess if you could be leaving money behind on each of your sales. Shipping insurance is often pennies on the dollar for smaller parcels, so small businesses with a healthy output of parcels would do well to see how they can save. The most well-known 3rd party shipping insurance company, Shipsurance, charges 90% less per sale than the USPS directly.
3rd party shipping services aren’t for every small business. If you are using base commercial pricing, for example, it is a near-certainty that the website you are using also maintains their own insurance system. A great example of when 3rd party parcel insurance may come into play is if you sell small, luxury items like jewelry. 3rd party parcel insurance companies generally are quicker to respond to claims and more directly reimburse for parcel contents compared to carriers like USPS. If you declare your items ahead of time, you can rest even easier.
Finding Your Dream Shipping System
Every small business is unique and so is every shipping solution. No matter if your small business ships one parcel a month or 1,000 there is a good chance there is still money to be saved. Do your research and get intimate with the details of your own shipping procedure. A few dollars savings becomes a boatload after a steady stream of parcels. The Internet and home printing were both revolutions for the shipping industry, but we are only enjoying the synergy of those several advantages right now. One thing is certain: small business owners have no excuse to wait in line at the post office anymore.