8 Ways to Reduce Ecommerce Shipping Overhead

Man with clipboard in warehouse


Shipping costs are one of the biggest expenses for any ecommerce business — from a small to warehouse-sized operation. However, it is possible to reduce your overhead on shipping so that you can maintain your profit margins and still meet customer expectations. Here are 8 ways to reduce your ecommerce shipping costs.


1. Negotiate Your Shipping Rates

Shipping carriers will negotiate their rates based on your annual shipping volume. The more you ship, the lower your rate. Once you have secured a lower rate with your carrier, you can easily add it to ShipWorks. We’re also proud to offer our users discounted rates through UPS. UPS announced an adjustment to its UPS® Digital Access Program rates. Effective April 11, 2021, customers who sign up for a UPS account on [Insert Partner] will now enjoy discounts of up to 50% off UPS® Ground shipments, up to 66% for UPS 2nd Day Air® service, up to 65% for UPS Next Day Air® service, and up to 76% off International services on eligible packages.


2. Know Where You’re Shipping

If you primarily ship to one specific region, a regional carrier may be your best bet. Regional carriers often provide lower rates than national shipping carriers because they cover a small geographic area. 

For example, OnTrac is a ShipWorks partner that covers the West Coast and they offer fast deliveries within California, Arizona, Nevada, Oregon, Washington, Utah, Colorado, and Idaho.


3. Use Third-Party Shipping Insurance

Carriers charge more for shipping insurance than third party companies. Carriers charge about $0.85 for every $100 of insurance, and third-party companies charge about $0.55 cents for every $100. These savings can add up, especially when you’re shipping valuable items.


4. Watch Out for Shipping Carrier Fees

Depending on the shipping carrier you use, you may be charged for things like Saturday delivery, fuel surcharges, delivery signatures, and residential delivery charges. Understand these fees in advance so that you don’t pay for a delivery feature that isn’t important to you and your customers.


5. Print Your Postage Online

This one is obvious to ShipWorks users, but if you’re new to shipping, you’ll quickly learn that there is a huge cost saving when you skip the Post Office counter and print your postage online. The USPS has authorized Endicia and Stamps.com to provide internet-based postage. You’ll use your computer to buy postage from either of these companies and then the USPS will deliver the package for you.


6. Take Advantage of Discounts for Priority Mail Express and Priority Mail

If you prefer to ship with USPS Priority Mail Express or Priority Mail, make sure you purchase postage through Express 1. Express 1 is a USPS partner and they provide substantial postal discounts to companies. The great part of this is that you get the discount regardless of your shipping volume and without signing a contract. If you’re using ShipWorks, Express 1 is free and it’s easy to use.


7. Optimize Your Packaging

Shipping carriers charge based on the package’s size, weight, and destination. It may seem obvious, but you can save money on shipping by using lighter and smaller packaging. It may require increasing your packaging options in the warehouse, but it can allow you and your team to better optimize the packaging for each item and avoid high shipping costs. 


8. Use Free or Discounted Shipping Supplies

Depending on the shipping method you plan to use, you can often get free shipping supplies from USPS, FedEx, and UPS. Alternatively, you can purchase discounted supplies when purchasing in bulk online.

If you use your own packaging, you may have a “dimensional fee” for packages that exceed the carrier’s size regulations.  You can avoid these charges by using the carrier’s packaging.


* Reduced rates are limited to shipments within the continental U.S. These rates and discounts exclude shipment origins from Alaska, Hawaii, and Puerto Rico. Rates and any applicable discounts are subject to change at any time without notice.