Shipping & Fulfillment

Discount Shipping: Faster and Cheaper Than Ever

Jackie Ostrov / 9 min read

Discount Shipping: Faster and Cheaper Than Ever

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Now, more than ever, quality shipping and handling has become not only fast — within two business days or even next-day delivery — but accessible, too. Depending on the size of your business, you won’t always have access to cheap shipping services in huge quantities, but that shouldn’t stop you from providing affordable shipping to your customers.

Shipping costs can have a huge impact on your sales. That’s because many customers factor delivery costs into their purchasing decisions. Don’t take our word for it, in fact the stats speak for themselves:

  • A recent study by Statista shows that 63% of consumers abandon their shopping carts when shipping rates are too high.
  • Similarly, online shopping is growing so fast that the global online shopping market size is predicted to hit 4 trillion in 2020. In the U.S. alone, we’re expecting to have 300 million online shoppers in 2023. That’s 91% of the entire country’s population!
  • Meanwhile, merchants are providing more international service than ever before: in 2019 we saw BigCommerce merchants ship to 116 destination countries.

Translation: the world is buying online, so if you can offer discounted shipping rates, you’ll also be able to maximize your sales opportunities. A successful logistics strategy is more than a delivery experience, it encompasses the entire supply chain, from inventory, to fulfillment, customs processing, reverse logistics, and at it’s top-line, pricing.

How Do You Get Shipping Discounts?

As a small/medium-sized business, you may think that you have to pay the full retail price for shipping. And indeed, it may be a real issue if you’re shipping 5 to 10 parcels a month. However, some of the major carriers do offer small business discounts. Here are some of the best discount shipping options from popular couriers:

  1. USPS: Offers exclusive Commercial Base prices on shipping that range between 5%-40% off normal post office rates. To qualify, you will need to ship a minimum of 200-500 pieces each month, depending on the service you use. USPS also provides some free shipping supplies.
  2. FedEx: US-based businesses with FedEx accounts can save between 5-32% via the FedEx Advantage Program which is based on the participants actual shipping activity. Earned discounts will be based on a 52 week frequency, and applied annually to the merchants account.
  3. DHL: DHL offers many promotions to entice small businesses to start shipping, they range from up to 30% off on discounted rates for a merchants first shipment, to savings on all shipments varying by volume when you join their DHL Express program for small business solutions.

Many shipping consolidators exist to help you with things like pickup, sorting, and transportation. You may also be able to use a consolidator to get shipping discounts, like Easyship to help you compete with high-volume shippers. They will help you find shipping discounts that will allow you to provide your customers with high-quality, fast shipping solutions that will ensure their satisfaction. Here’s how:

1. Find a shipping partner.

USPS, UPS, FedEx and DHL are all great couriers. But, picking one isn’t a one-size-fits-all proposition. Some things to consider include whether you typically send large or small packages, and if you need to ship globally.  Instead, you should take a detailed look into the different services each one offers to find the right solution for each of your shipments. For example, FedEx 2-Day shipping may be useful if you want to send a parcel that needs to be delivered quickly. On the other hand, if you’ve got a heavy package, DHL ground shipping may be the way to go. To get started, first you need to understand your product and customer requirements, then you can use a shipping rate estimator to better understand what discount shipping is available for your store.

2. Small business discounts.

To ensure that you aren’t leaving money on the table, check with your courier to see if they have small business discounts. When you sign up for a service, make sure you check for any special discounts on your initial shipping costs. The savings and discounts available here can vary. UPS offers up to 20% off their services, while FedEx Save Now offers up to 16% on select services. Most couriers will work with you to give you a custom rate based on the volume you ship. As such this can be a great way to save when your company is still finding its feet.

3. Prepaid shipping labels.

Buying prepaid packages and labels can help you save significant amounts of cash. Let’s face it: as your ecommerce business grows, so will returns — and your customers won’t want to print labels for those return boxes. But, once again, you’ll get better pre-paid rates with higher volume. Luckily, small businesses can use shipping automation platforms and leverage their volume to access discounted, pre-negotiated rates.

How To Choose Shipping Partners

Shipping partners play a huge role in determining your rates — choose them wisely. Here are a few things you should be thinking about when deciding which ones to go with.

1. Price.

There are a lot of factors that go into determining the final cost of your shipping, and understanding these is the first step to getting good shipping discounts.

Let’s talk about the differences between express couriers (UPS, Aramex, SF Express, etc.) and postal couriers (such as HK Post, SingPost, and USPS.) With postal couriers, the pricing is simple – you will pay mostly for the shipping costs. However, the speed of their services are slow and the service quality is low.

On the other end, express couriers provide fast and reliable services, but the pricing is much more complex and will depend on various factors.

Let’s break down the express courier costs into three main categories:

  1. Shipping-related charges
  2. Parcel handling-related charges
  3. Tax & duty-related charges

Shipping-related charges

These are related to the details of the shipment, such as the pickup location, the delivery destination, and the delivery hours.

  • With express couriers, the main additional charge that you will face is the fuel surcharge. Calculated as a percentage of the shipping costs, this varies weekly or monthly depending on the country.
  • If you read the fine print, you may be surprised that depending on the pickup location, you can face a “remote area surcharge”, as these locations are often spread out and put more wear and tear on the vehicles. If pickup is in a residential building, an additional surcharge may also apply.
  • Optional value-added services can be chosen as well to take care of your shipments, such as insurance (in case of lost or damaged shipment), delivery out of regular working hours (such as Sundays, public holidays or within a short time frame.)
  • Finally, mistakes happen, and unfortunately you can be charged for this. Some of these fees include “address correction fee”, “delivery reattempt” or even “return fees”.

Parcel handling-related charges

This has to do with the items you want to ship, their container, the weight, and the dimensions.

  • Shipping “dangerous goods” has a price. You usually will be charged an additional fee, mostly as a percentage of the shipping costs or the value of the goods (sometimes even both!)
  • The material and the shape of the containers can lead to additional fees. If your container is made of wood or metal, or if it’s cylindrical, you can expect extra fees to be charged.

Tax & duty-related charges

As you may know, shipping internationally means the sender or the recipient will have to pay for taxes and duties under certain conditions and the amount will vary depending on the destination.

  • For DDU shipments (Deliver Duty Unpaid) the recipient is responsible for paying the taxes and the duties. In this case, you won’t see any additional charges from the courier.
  • For DDP shipments (Deliver Duty Paid), you (the merchant) will pay for the taxes and the duties. Typically the seller includes these duties and checkout and directly collects payments from the customer for DDP shipping. In addition to the fixed “DDP handling fee” for taking care of those taxes & duties, you can also expect a “disbursement fee”, calculated as a percentage of the amount of T&D they will advance on your behalf.
  • Here are some other tips on what to do if your shipment is stuck in customs.

Now that you are aware of the hidden fees and additional charges that can occur for international shipments, we hope you can learn to budget for these accordingly (or avoid some of them entirely.) Perhaps the most important thing, though, is that you should always be upfront and offer transparent pricing for your clients.

Many of these price factors for services can be pricey when not running larger volumes of parcels. Through Easyship, we guarantee tax & duty and list all potential surcharges in our shipping quotes at checkout so you will never be caught off-guard again.

2. Speed.

Speed is something to consider. Some businesses thrive off 2-day shipping, while standard shipping works perfectly well for others. While many customers value the instant gratification that comes with fast delivery, many more appreciate having choice. That means that as well as offering fast delivery services, you should be giving your customers a range of options that include value-added services or more affordable rates. This way, they can decide what works best for them. And, giving customers more choice can help with conversions.

3. Support.

Packages get lost, refunds need to be made, and tracking numbers can be jumbled. That’s why you need solid support from a dependable partner. Look up reviews of the couriers you intend to use, to see what customers have to say about their services.

Identify any issues they may have had and see if they were resolved. If no solution is mentioned in the review, take note of this and bring this up with the courier to see if they have changed their processes to account for these shortcomings.

You should also be looking at things like delivery times, pricing, insurance options, and tracking capabilities to ensure that your customers’ post-purchase experiences are in line with their expectations.

Best Shipping Partners For Discounted Rates

It’s important that your shipping rates are competitive. But it’s more important to consider everything that goes into these rates, because sometimes you’ll find that the cheapest rates don’t offer the best functions. Here are a few things to consider:

  • Price: Has everything been factored into your price, including surcharges and taxes? If not, you could get stung later and end up paying more than you wanted.
  • Volume: Is your shipping volume large enough to access the best rates? Many couriers have minimum shipments to qualify for discounted rates, so you’ll need to find one that works within your range.
  • Delivery Lead Time: How quickly does your shipment need to get to its destination? In general, the faster you need to get a package somewhere, the more you’ll have to pay for it.

Understanding how to leverage your shipping partner is also important to making sure you’re getting the most bang for your buck. These are a few ways to maximize the opportunities your shipping partner provides:

  • Checkout Functionality: Many platforms give retailers the ability to display important information to customers at checkout. Being able to show things like delivery times and any additional costs (like surcharges and taxes) goes a long way to improving conversions.
  • Offer Various Rates: We’ve already discussed how important it is to give your customers options, and showing them a range of delivery options at different price points and delivery times will give them more choice and encourage them to make a purchase.
  • Automate: Most shipping platforms understand that retailers want shipping to be an easy process. That’s why some of them offer the ability to automate many parts of the fulfillment process, from filling out paperwork to completing labels.
  • Hybrid Solutions: By using a third-party shipping partner, you may be able to access hybrid shipping solutions that are very cost-effective for international shipping.

Now that you know what to look for in shipping providers- and how to get the most out of them –  you can leverage a shipping partner, like Easyship, a leading domestic and international shipping software, for a monthly fee. Easyship provides discounted shipping to ecommerce businesses of all sizes, while also providing access to global fulfillment solutions, label generation, integrated checkouts, as well as, customizable branded tracking experiences.

Shipping Discounts By Country

Even if you’re not a high-volume user, you can get discounts for businesses that consumers aren’t eligible for. Here are the special Easyship programs by carrier and country to help save and ship further:

1. United States.

  • Savings up to 13% with Priority Mail Express
  • Savings up to 40% with Priority Mail
  • Savings up to 40% with First Class Mail
  • Up to 5% off International First Class, Priority Mail, and Priority Mail Express
  • Savings up to 40% with DHL Express
  • With Easyship you also have the option to link your own discounted Fedex, DHL or UPS account, to automate shipping solutions, while leveraging your own discounted rates

2. United Kingdom.

  • Save up to 20% off retail Hermes rates
  • Save up to 40% off DPD rates

3. Canada.

  • Save up to 22% off Canada Post rates
  • With Easyship you also have the option to link your own discounted Fedex, DHL or UPS account

Using Multiple Shipping Carriers.

For global shipments, hybrid solutions can offer the best discounted shipping rates. These are often based on the size and weight of your package, as well as the shipping method and origin/destination. Since local shipping carriers can be cheaper than international ones, hybrid solutions are often cheaper than using one international carrier. Shipping software – such as Easyship – can make it easier to find and access these solutions.

Why Ecommerce Needs Discounted Shipping

1. Shipping rates increase regularly.

This is not new. The price of Ground and Air shipping fluctuation along with global demand and inflation. As more and more customers buy items online, the demand placed on fulfillment resources will grow. Plus — as relationships between geographies change (like tariffs, taxes, and embargos), it will be important to establish discounts and deals prior to any shift in global availability.

2. Dimensional weight is becoming a major factor.

As ecommerce becomes more popular and more shipments are being made, couriers are realizing that they can provide tailored pricing that could save shippers money by not using the “cookie cutter” flat-rate box. After all, a lighter package uses less fuel and handling, so it should be a different cost than one that may weigh more.

3. Fees increase as service features improve.

Things like insured packages, signature delivery, and tracking are becoming more and more expensive. More and more consumers are shopping for high-value items online — like furniture, cars, and jewelry — and the costs associated with handling and insuring these items will continue to rise with their value.

4. USPS is implementing huge price increases.

USPS (United States Postal Service) has had to increase prices to keep up with competitors, raising some package prices by almost 10% in a single year. It is important to keep an eye on shipping announcements so that you are not hurt by increases nor are your returning customers surprised when the shipping costs increase at checkout.

5. Customers have come to expect a free shipping threshold.

In a BigCommerce survey of 3,000 consumers, 84% of the people surveyed said that they made a purchase because the shipping was free and 30% of respondents said that they would increase the size of their orders to be eligible for free shipping. This means that as an industry, online retailers need to find ways to lower the costs of shipping so they can remain competitive with retail giants such as Amazon that have taken their logistics and shipping in-house to offer free shipping to their Prime customers.

Conclusion

In conclusion, shipping can take up way too much of your budget if you don’t properly research all the available options. To ensure you’re accessing the best shipping discounts – whether you’re a big brand or a small startup – it’s important to find the right shipping partner.

Using a third-party shipping platform like Easyship can help you by leveraging their shipping volume to access cheaper rates (and better services). Plus, you’ll have the advantage of better features like automation and checkout facilities. All of this translates to a better customer experience for your clients and cost-effective shipping solutions that protect your bottom line.

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    Jackie Ostrov

    Jackie Ostrov

    Jackie Ostrov is a marketing leader that helps companies scale successfully. Since 2018 she’s been part of the management team at Easyship, where she gets the chance to help ecommerce companies grow their own businesses with global logistics and elevated checkout experiences.

    View all posts by Jackie Ostrov

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