Update: We originally published this article in 2010 with tips for reducing shipping expenses. Carrier services, pricing structures, and shipping technology have changed considerably since then, so we updated the guide with practical ways to save money on eCommerce shipping today.
Shipping costs can affect product margins, customer pricing, and whether an online order remains profitable. Yet the cheapest listed service is not always the least expensive option once delivery speed, package dimensions, surcharges, and customer expectations enter the calculation.
Merchants can reduce shipping expenses by comparing services, improving packaging, automating routine decisions, and measuring the true cost of fulfilling each order.
1. Compare Shipping Rates Before Buying a Label
Carrier rates can vary based on the package’s weight, dimensions, destination, delivery speed, and service level. A carrier that offers the lowest price for one order may not be the best choice for another. Rate shopping allows merchants to compare cost and delivery speed before purchasing a label.
Ordoro’s shipping and order management tools let merchants compare available shipping options, create labels, process orders in batches, and manage fulfillment from one place. Ordoro also supports real-time Rate Shopping so users can view carrier cost and delivery speed side by side.
2. Use Discounted Commercial Shipping Rates
Retail counter rates are not always the lowest rates available to an eCommerce business. Shipping software and carrier business programs may provide access to discounted commercial pricing. For example, USPS offers lower Commercial Rates through its online and business shipping services.
Ordoro provides access to discounted carrier rates within its shipping platform, including discounted USPS and UPS options. Merchants can review the available services and pricing before creating each label.
3. Reduce Package Size and Empty Space
Carriers may charge based on dimensional weight when a package occupies more space than its actual weight would suggest.
FedEx and UPS explain that shipping charges may use either actual weight or dimensional weight, depending on which is greater. That means a lightweight item in an unnecessarily large box may cost more to ship.
To reduce dimensional-weight charges:
- Use boxes that closely fit the product
- Remove unnecessary empty space
- Choose lighter protective materials when appropriate
- Keep a range of packaging sizes available
- Record accurate dimensions for commonly shipped products
- Review packaging after products or bundles change
Packaging still needs to protect the item. The goal is to remove wasted space without increasing damage or return rates.
4. Enter Accurate Weight and Dimensions
Incorrect shipment details can lead to carrier adjustments and unexpected charges. Weigh the complete package after adding the product, box, protective materials, inserts, and tape. Measure the exterior length, width, and height at the package’s widest points. UPS advises shippers to enter correct package dimensions to avoid dimensional-weight charge corrections.
Connecting a scale to your shipping workflow can also reduce manual entry. Ordoro can capture package weight from a compatible USB scale and use it when determining shipping rates.
5. Choose the Right Service for Each Order
Expedited delivery is not necessary for every shipment. Review the customer’s promised delivery window and select the least expensive service that can reasonably meet it. A ground service may work for a nearby destination, while a different carrier or service may offer better value for a shipment traveling farther.
Consider:
- Delivery commitment
- Destination
- Package size and weight
- Tracking
- Insurance or declared value
- Residential delivery
- Weekend delivery
- Customer expectations
Avoid relying on one default service for every package without checking whether it still makes financial sense.
6. Use Flat-Rate Packaging Selectively
Flat-rate shipping can be useful when a qualifying product is heavy, travels a long distance, and fits comfortably inside the approved packaging. However, flat-rate packaging does not automatically provide the lowest price. A lighter package or nearby shipment may cost less with a weight- and zone-based service.
Compare the flat rate with other available services before purchasing the label.
7. Review Carrier Surcharges
The base transportation rate may represent only part of the final shipping expense Depending on the carrier and shipment, additional charges may apply for:
- Residential delivery
- Delivery-area service
- Address corrections
- Oversized packages
- Additional handling
- Fuel
- Saturday delivery
- Signature service
- Remote destinations
Review invoices and carrier adjustments regularly. Repeated fees can reveal address-quality problems, incorrect package data, or shipping rules that need attention.
8. Validate Customer Addresses
An incomplete or incorrect address can delay delivery and create additional carrier charges. Address validation can help merchants identify missing apartment numbers, invalid postal codes, formatting problems, and other issues before purchasing the label. Merchants should still review unusual addresses and provide customers with a clear way to correct their information before fulfillment begins.
9. Use Shipping Automation Rules
Employees do not need to evaluate every routine order from the beginning. Shipping automation rules can apply predefined actions based on criteria such as:
- Order weight
- Destination
- Sales channel
- Requested service
- Product type
- Shipping method
- Order tags
- Warehouse
For example, a merchant might create a rule that applies a particular package type and shipping preset to qualifying orders.
Ordoro supports shipping automation rules and presets that can act on orders as they arrive, helping merchants make routine fulfillment decisions more consistently.
10. Process Similar Orders in Batches
Creating labels individually can add unnecessary labor to fulfillment. Batch shipping allows merchants to select multiple orders, apply the appropriate settings, and create labels together. This may not reduce the carrier’s charge directly, but it can lower the labor cost associated with each shipment.
Ordoro supports batch processing and bulk label creation as part of its shipping workflow.
11. Match Packaging to Common Order Types
Review frequently shipped products and order combinations. Then create standard packaging options for those common shipments. For each package configuration, record:
- Box or mailer type
- Empty packaging weight
- Exterior dimensions
- Protective materials
- Eligible carrier services
- Typical shipping cost
Standardization can improve packing speed and reduce the chance that employees select packaging that is larger than necessary.
12. Evaluate Free Shipping Carefully
Customers may respond positively to free shipping, but the merchant still pays the carrier. Before introducing the offer, calculate how it affects:
- Average order value
- Product margin
- Shipping cost per order
- Conversion rate
- Return costs
- Overall profit
Merchants can protect their margins by setting an order minimum, limiting eligible products or destinations, or offering free shipping only through an economical service.
For a deeper look at the decision, read Ordoro’s guide to building a sustainable free-shipping strategy.
13. Reduce Fulfillment Errors
A wrong product, incorrect quantity, or duplicate shipment can cost much more than the original label. These mistakes may lead to:
- Replacement shipping
- Return postage
- Additional packaging
- Lost merchandise
- Customer-support time
- Refunds or discounts
Barcode scanning, order verification, organized pick-and-pack workflows, and accurate inventory records can help reduce preventable shipping expenses.
14. Consider Regional and Alternative Carriers
National carriers are not the only option in every market. Regional or alternative carriers may offer competitive pricing or delivery performance for specific locations. However, merchants should evaluate coverage, tracking quality, pickup requirements, claims procedures, integrations, and customer experience before changing services.
The best carrier mix depends on the business’s package profile and where its customers live.
15. Measure Shipping Cost per Order
Merchants cannot manage shipping expenses effectively without measuring them.
Track:
- Carrier charge
- Packaging materials
- Fulfillment labor
- Insurance
- Surcharges
- Shipping software
- Return shipping
- Reshipments caused by errors
- Amount collected from the customer
Compare shipping cost by carrier, service, destination zone, product, sales channel, and package type.
This analysis can reveal that one product is expensive to ship, one box causes dimensional-weight charges, or one sales channel collects too little from customers.
How Can Shipping Software Reduce Costs?
Shipping software helps merchants compare rates, access discounted pricing, automate routine decisions, create labels in batches, and centralize orders from several sales channels. It also gives businesses more consistent shipment data. That makes it easier to identify expensive services, packaging problems, and unnecessary manual work.
Software alone does not make every shipment cheaper. Merchants still need accurate package information and well-designed fulfillment processes.
Shipping Cost FAQs
What is the best way to save money on eCommerce shipping?
Start by comparing carrier rates for each shipment, using discounted commercial pricing, and reducing unnecessary package size. Then review surcharges, fulfillment errors, and packaging costs that may not appear in the initial rate.
Which carrier is cheapest for small businesses?
No single carrier is always the cheapest. The best option depends on weight, dimensions, destination, delivery speed, negotiated rates, and available services.
Does using a smaller box reduce shipping costs?
It can. Carriers may calculate charges using dimensional weight when a box is large relative to its actual weight. Reducing unused space can lower the billable weight.
Are commercial shipping rates cheaper than retail rates?
They often are. Carrier business programs and shipping platforms may provide rates below standard retail-counter pricing. USPS, for example, offers lower Commercial Rates through eligible online shipping services.
Is flat-rate shipping always cheaper?
No. Flat-rate services may save money for some heavy or long-distance shipments, but lighter or nearby packages may cost less through another service.
How can automation reduce shipping expenses?
Automation can apply presets, package information, and shipping rules consistently. It also reduces repetitive decision-making and helps prevent expensive fulfillment mistakes.
Compare Rates and Lower Shipping Costs
Lower shipping costs come from a combination of competitive rates, efficient packaging, accurate shipment data, and organized fulfillment.
Ordoro helps eCommerce businesses import orders, compare carrier rates, access discounted shipping options, automate shipping decisions, create labels in batches, and send tracking information from one place. See Ordoro’s Shipping Tools
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