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The Cheapest Shipping for Small Business Owners

by EasyPost
Woman receiving a delivery at her business

As costs across the board continue to rise, it's stressful to think about how to stay afloat as a small business. Inflation, increasing manufacturing costs, and shipping rate hikes are all nerve-racking concerns to navigate. 

But despite these challenges, your business can continue to attract new customers and provide a great customer experience—without breaking the bank. Today, we're here to show you how to get the cheapest shipping for small business owners and operators.

If you're a small business owner or employee looking to decrease shipping costs, you're in the right place. Here is a full overview of why shipping rates are so high and what you can do to reduce those costs.

What are shipping costs?

Shipping costs are any of the fees associated with fulfilling and mailing a package. In the ecommerce realm, this typically includes packaging materials, carrier rates, and any additional charges that occur throughout this process, such as peak season surcharges. Shipping costs can vary from order to order depending on a variety of factors, including the size and weight of the goods and the distance a parcel travels to reach its destination.

Small businesses shipping can be tricky when it comes to cost-savings. With limited logistics resources, maintaining competitive delivery times poses a major challenge. And if your industry faces fluctuating demand, you may find it especially difficult to plan for supply chain challenges that affect your parcel shipping. 

Decreasing your shipping costs will take time and experimentation. The first step is understanding how they’re calculated.

How are shipping costs calculated?

As previously mentioned, a variety of factors go into determining shipping costs. As far as supplies go, the amount you spend will depend on the materials you choose. For example, corrugated boxes are going to cost more than poly mailers. Depending on your products and priorities, you can choose the materials and price point that works for you.

Once materials are taken care of, the carrier you choose determines the majority of the remaining shipping costs. The main factors carriers consider when determining shipping rates are a parcel's weight, dimensions, and destination. Understanding how carriers charge for shipping can help you find ways to have the cheapest shipping.

For a more detailed breakdown of all the factors that determine shipping costs, check out this article.

How do small businesses save money on shipping?

Because small businesses ship fewer packages than mid-sized or large organizations, they may not have access to the best deals and discounts. The result? High shipping rates put a burden on customers and businesses alike. However, the good news is that it’s possible to reduce shipping costs significantly. 

Cheap shipping for small business—although it may sound too good to be true, small businesses can reduce their shipping costs in a variety of ways. Some methods may be easier than others, but here are five we typically recommend to our users to help them start saving.

1. Use free shipping supplies from your carriers

Did you know that some carriers will provide shippers supplies free of charge? That’s right—they’ll provide boxes, tubes, and mailers delivered right to your door. For example, if you ship flat-rate with USPS and FedEx, you can access flat-rate boxes and envelopes for free. Be sure to check with your carrier to see what offers they have available, as this is a quick way to cut down on your total shipping costs. 

If your carriers don’t offer free packaging, don’t despair! You can use other strategies to save on materials. For example, buying supplies in bulk or negotiating discounts with suppliers can lead to significant savings. Reusing or repurposing packaging materials whenever possible can also lower expenses. 

Remember, your packaging doesn’t necessarily have to be fancy. As long as it’s sturdy enough to withstand rough handling, your customers (and wallet) will be satisfied.

2. Ship with multiple carriers

Having more than one carrier is critical to a small business. Not only does a multi-carrier shipping strategy allow you to ship with whoever has the best rate for your package, but it also can increase efficiency and reliability. 

Meeting delivery times during the holiday season—or any high-demand time—is difficult when using only one carrier, but by diversifying carrier options, a small business can more consistently meet its customers' expectations. 

Whether you're looking for regional, national, or international carriers, exploring multi-carrier shipping solutions can lead to better savings and reliability down the line. One great way to access multiple carriers is to use a shipping API like EasyPost.

EasyPost allows you to integrate with over a hundred domestic and international carriers, automatically generate shipping labels, and optimize your shipping method selection. The best part? It’s free to use for small businesses! 

If you’re not using a shipping API or software, make sure to check each carrier’s individual shipping rates calculator to learn exactly which service is best for your shipments. As a general rule, USPS is one of your best shipping options for lightweight parcels (those under 5 pounds). For heavier packages going longer distances, UPS and FedEx might provide a better deal.

Man checking and scanning packages in the back of a van

3. Get shipping discounts based on volume

If you're regularly sending out packages, you shouldn't be paying the retail price on shipping rates. Even small businesses can negotiate with carriers for discounted rates on their shipping volume. If you haven't already, you absolutely should reach out to your carrier and see what discounts they can offer you.

These tips can help you during the negotiation process:

  • Leverage shipment volume. For better or for worse, it’s all about volume! You’ll be able to negotiate better rates when you demonstrate your potential shipment volume. Carriers often offer a grace period for discounted rates; if you can increase shipment volume by an agreed-upon amount during that period, you get to keep your discounts.
  • Explore alternative options. Don't settle for the first carrier that offers a quote. Instead, research and approach multiple carriers to compare rates and services. You should also consider regional carriers or niche providers that offer competitive rates for specific routes or types of shipments.
  • Negotiate service level agreements (SLAs). In addition to negotiating rates, negotiate favorable terms and SLAs that align with your business's needs. This could include delivery guarantees, flexible pickup options, or discounted rates for services like express or international shipping. 

If you can't get the rate down, don't feel discouraged. Shipping software, APIs, and other programs already have pre-negotiated rates that they can extend to you regardless of your personal shipping volume.

For example, through EasyPost you can ship with USPS, UPS, FedEx, DHL, and LSO at a discounted rate. Best of all, there are no fees or volume minimums to access these discounts, so you'll definitely want to take advantage of them.

4. Reduce the size and weight of your packages

Shipping costs are usually determined by service level, cubic size, weight, and zone. Some of these factors aren’t in your control—you can't choose where your customers want to receive their packages, and often it's difficult to be competitive without offering fast shipping. 

However, you can control the size and weight of the packages as they go out your door.

Did you know that using smaller boxes brings down shipping costs? This is because carriers charge more for large, lightweight packages. If a package has a dimensional (DIM) weight that’s higher than its actual weight, you’ll have to pay more to ship it. Avoid DIM weight charges by packing items into perfectly sized boxes that don’t leave lots of extra room. 

In addition to packing goods in smaller boxes, opt for lighter-weight packing materials like bubble mailers to bring down the weight. More compact packages mean less waste both from the packaging itself and transport, leading to more environmentally friendly shipping.

Group of people packing packages

5. Choose the right parcel type

When you’re shipping products to your customers, don’t just start sticking things in boxes. Depending on the carrier you use, you may get access to more cost-effective shipping by using certain parcel types. 

For example, when shipping with USPS, using the right parcel type can make a big difference. In some cases, flats can be cheaper to ship than parcels. 

Always check to see which classifications meet your needs and will give you a better price. A little research can go a long way in helping small businesses find savings.

For example, if you're shipping any media, such as books or CDs, and not in a hurry, you can use USPS Media Mail for significant savings. Be sure to check with USPS guidelines to see if your package qualifies.

Your small business shipping strategy

We’ve reviewed the cheapest shipping for small business owners, but it’s important to remember that no two small businesses are quite alike—especially in ecommerce.

Designing a shipping strategy can help you save on shipping costs for years to come, but these changes don't happen overnight. You need a fast, flexible, and reliable logistics operation to help all of these moving parts come together. And that's where EasyPost really shines.

EasyPost helps thousands of companies, ranging in size from multinational Fortune 100 companies to small neighborhood stores, ship billions of packages around the world.

Using our suite of shipping APIs, users can print labels with the best uptime in the industry, find the best shipping rates across 100+ carriers, implement real-time tracking updates through custom-branded tracking pages, and more.

Start shipping for free with EasyPost.