What Are Shipping Discounts?
Shipping costs can significantly impact your bottom line. The world is buying online, and if you don’t have access to cheaper shipping, you can’t compete with other online businesses offering low-cost shipping. For this reason, many businesses turn to United Parcel Service (UPS), FedEx, and USPS to get shipping discounts and reduce their shipping spend.
Many eCommerce retailers and small businesses pass on shipping discounts to buyers with orders over a certain amount. This is an effective way to encourage customers to buy more from your store.
In this post, we’ll look at the main factors that affect shipping prices and then dig deeper to see how shippers can get discounted shipping to mitigate their business spending.
Factors to Consider in Shipping Rates
The cost of shipping depends on several factors, including:
- Shipping distance: Distance is one of the main factors in determining your shipping costs, excluding flat-rate boxes. Carriers such as FedEx, UPS, and USPS have the United States mapped out into shipping zones from zone 1 to zone 8. The higher the shipping zone or the greater the shipping distance, the higher the shipping cost.
- Shipment speed: Shipping carriers offer a variety of standard (2-7 days) and express (overnight and next day) shipping options. The quicker you want your package to be delivered, the higher the shipping cost.
- Weight and dimensions: Apart from the shipping distance and speed, dimensional (DIM) weight is an important shipping cost factor (again, excluding flat rate boxes). DIM weight pricing is based on how much space your package occupies in relation to its actual weight. Carriers use the higher value among the DIM weight and actual weight to calculate the cost of shipping. Using Sifted’s DIM weight calculator, you can see how package dimensions affect your shipping rate. For a quick estimate of shipping costs, enter information like the dimensions and weight of your package, and choose your shipping zone and preferred shipping service.
- Shipping surcharges: Shipping surcharges are additional fees added to the shipping cost by the carrier. Common shipping surcharges include fuel surcharges, residential surcharges, additional handling surcharges, and oversized package surcharges. Some sellers pass on the cost of shipping surcharges to their customers to offset the additional expenses.
- Taxes and duties: International shipping is tricky, accompanied by taxes, tariffs, and duties. Cost can vary depending on the place of origin and destination of the package and should be accounted for when determining the total landed cost.
Merchants have two options for import fees in their overall shipping strategy: either let the customer pay the duties and taxes upfront and deliver the package to the doorstep, or let the customer pay the import fees when they receive the package.
How to Get Discounted Shipping Rates with FedEx, UPS, and USPS
Here are some popular ways eCommerce retailers and shippers receive shipping discounts from carriers.
Check Out UPS’s Commercial Base Prices
USPS offers a range of discount programs on different service levels to reward its loyal customers. Commercial Base Pricing (CBP) is a discounted rate provided to USPS customers who buy and print shipping labels online.
Using discounted USPS labels gives you cheaper shipping rates (up to 89% lower) than the regular price (charged at your local Post Office or USPS.com), regardless of your shipping volume. In addition, some USPS services offer incentives based on your shipping volume.
USPS offers Commercial Bases Pricing for the following services:
- First Class Mail®
- Priority Mail®
- Priority Mail Express®
- First Class Package International®
- Priority Mail International®
- Priority Mail Express International®
- Global Express Guaranteed®
Consider the FedEx Advantage Program
The FedEx Advantage® Program is a discounted rate offered to high-volume FedEx customers. FedEx Advantage® is free to join and ranges between 5 to 50% depending on your service level. The discounts are not based on volume minimums but are determined based on a shipper’s past year activity.
FedEx Advantage® is also a helpful shipping option if your shipping volume varies from month to month.
Find Shipping Partners
Finding the best shipping option among large carriers like FedEx, DHL, and UPS can be complicated. Should you look for alternative options? Or even create a mix of national or regional carriers. You need to consider your requirements, such as shipping distance and speed, surcharges and import fees, and dimensional pricing.
For example, USPS is cheaper for lightweight packages. FedEx is a great option for eCommerce shippers looking for more reliability and last-mile tracking. Similarly, UPS offers additional discounts if your small business meets its volume requirements, whereas DHL is known for being an efficient and cost-effective option for shipping international packages.
UPS and USPS offer discounts on various domestic and international shipping services when you ship through eCommerce solutions such as Shopify, eBay, and Etsy. Discounted USPS and UPS shipping services include:
| Delivery service | Domestic services | International services |
|---|---|---|
| UPS | UPS Next Day Air® UPS Next Day Air Saver® UPS Next Day Air Early® UPS 2nd Day Air® UPS 2nd Day Air AM® UPS 3 Day Select® UPS Ground® UPS Standard® | UPS Worldwide Express UPS Worldwide Saver UPS Worldwide Expedited UPS Worldwide Express Plus |
| USPS | Priority Mail® Priority Mail Express® Media Mail® Parcel Select Ground® First-Class Mail® First-Class Package Service® | Priority Mail International® Priority Mail Express International® First-Class Package International Service® |
eCommerce merchants can save up to 88% with USPS services and up to 69% with UPS services through Shopify.
Stock Up on Prepaid Labels
A prepaid label is a shipping label paid in advance. As the shipper has already paid the shipping fee in advance, they don’t have to worry about paying any extra delivery fees. This saves money on shipping costs and ensures the safe delivery of their packages.
According to a Pitney Bowes study, 72% of customers are delighted when a prepaid shipping label is included in their package.
You can include prepaid return labels in packages as it speeds up the returns process and minimizes address mistakes. Moreover, a prepaid return label lets you choose how the product is returned to your warehouse, helping you control the return cost.
Optimize Your Shipping Rates With Sifted
Every year shipping carriers increase their rates. Therefore, shippers need to secure discounts to control their shipping costs.
Sifted understands the importance of affordable shipping. We offer logistics intelligence tools that help you break down and compare shipping rates across carriers and maximize discounts.
Negotiate with carriers for discounted shipping rates. Get a free demo from Sifted!
