Zero Orders or 5,000 Per Month: Get Discounted Shipping Rates with Ease!
A guest article by ShipsALot, an order fulfillment and warehousing solution for online retailers. Save time and money by increasing order accuracy and ship time by outsourcing your fulfillment to their state of the art facility.
There is a dizzying number of Shopify apps offering assistance in the fulfillment and shipping steps of operating your eCommerce business. Some advertise discounted rates while giving discounts that amount to pennies per order, others only give you discounts on some services while increasing prices on other services.
We recommend going right to the source: the carriers (or their licensed vendors, in the case of Endicia) themselves. We’ll be talking Endicia, UPS, and DHL during this article. These three agents are industry leaders in three very specific niches.
Endicia is a USPS postage vendor. They also have the ability to grant entrance into all but the highest of the discount tiers available from the USPS. The USPS is king in the following order profile:
- Your customer wants their goods in less than 5 days but doesn’t need an overnight service.
- Is a domestic order.
- Package is less than 10 pounds (for nearby zones) or less than 5 pounds (for distant zones).
- Can fit into one of the major flat-rate containers (see table below). These boxes are free if you ship them as intended.
|Box||Length (in.)||Width (in.)||Height (in.)|
|Flat rate envelope*||12.5||9.5||About 4|
|Padded flat rate envelope*||12.5||9.5||About 2|
|Small flat-rate box||5.38||8.63||1.63|
|Medium flat-rate box (top loader)||11||8.5||5.5|
|Large flat-rate box (top loader)||12||12||5.5|
*Flat rate envelopes do not have to be flat, you can stuff them full of material. As long as they have not been cut or taped into a new configuration, it is fine.
USPS retail rates, however, are unacceptably high for a keen eCommerce operator such as yourself. That being said, it is actually incredibly easy to obtain some very nice discounts as a direct consequence of being a commercial enterprise. Let’s talk about shipping tiers for commercial ventures at the USPS for a moment; it’s fairly obscure knowledge.
From worst to best:
- Retail prices- you get the prices that someone walking into a Post Office gets. This tier is padded with a very large margin.
- Commercial Base Pricing (CBP)- Significant discounts against retail. This tier is reserved for shipments made by virtually any domestic commercial enterprise.
- Commercial Plus Pricing (CPP)- Higher discounts than the base, very significant against retail. I’m not sure of any hard requirement for revenue or number of shipments. My friends at USPS say they have been very lax with this tier in the past and are planning to restrict entry further in coming years.
- Negotiated Service Agreement (NSA, “No Such Agreement”)- A tailor-made discount plan meant for businesses shipping, at a minimum, hundreds of thousands of labels per year. Recipients of NSAs are famously secretive about the discounts received and the agreement requires confirmation by the Postal Regulatory Commission.
So, how do these tiers actually compare? Let’s take a look at some hard numbers!
The following rates are for a shipment from Cleveland to Los Angeles with varying weights and fixed dimensions. The dimensions (9”x6”x3”) are chosen to be “reasonable”, so the package does not incur dimensional-weighting. All figures are USD.
Pretty neat, huh? This is but a taste of the sweet discounts available to you!
Now, what if I told you that all of this was available with a few clicks? All that you have to do to get Commercial Base Pricing is register an Endicia account.
Once you have a couple months of history shipping orders through your account, call them up and tell them you’d like to receive Commercial Plus Pricing on your account. I would recommend waiting until you have at least 1,000 orders per month.
UPS is a cherished B2B carrier and with good reason. They have a well-developed and strategically deployed fleet of long-haul trucks able to efficiently transport large shipments. These assets are coupled with famously efficient (and enormous) last-mile trucks to complete their delivery network. Occasionally, UPS (along with FedEx and DHL) will delegate to USPS for the last-mile portion of delivery.
This being said, UPS is typically the carrier-of-choice for shipments meeting the following profile:
- Large in volume (in excess of 8,000 cubic inches) or heavy (over 15 pounds).
- Is a domestic order.
- 10-15 day delivery timelines are acceptable
UPS has a slightly more complex rate calculation method than USPS. There are really only two major factors that you should be aware of when using UPS: the fuel surcharge and the residential delivery fee.
The fuel surcharge is a percentage of miles traveled based on current fuel prices.
The residential delivery fee is currently $3.25 for retail accounts. This fee can actually be waived by a UPS sales representative once your business is shipping moderate volumes.
Below, you can see some of UPS Ground’s currently quoted rates, similar to the USPS table. The rates quoted here do not include any additional charges and are for the UPS Ground service from Ohio to California. All figures are in USD.
|Weight||Retail||Introductory Discount*||Moderate Discount**|
*Available to anyone.
**Available upon negotiation with UPS Sales personnel.
This introductory discount (typically to the order of 10%), is available to anyone who simply creates their own UPS account.
I will only be discussing one of DHL’s many services: DHL Express Worldwide.
DHL is, personally, one of my favorite carriers. They have kept a very keen eye on every package I’ve ever shipped and their employees have called me anytime something has gone wrong. They’ve been very helpful in resolving problems and assisted us greatly in gaining the ability to ship lithium batteries worldwide via aircraft.
Their most significant assets to the Express Worldwide service are their aircraft, their knowledge of customs, and their skill in delivering within foreign countries. If you have orders that meet the following profile, this service may be the right fit for you and your customers:
- International destination.
- Customer needs delivery in 2-5 days.
- Express-level price points are acceptable to the customer.
- High level of certainty that the shipment will clear customs.
It is actually not constructive for me to list any DHL Express Worldwide rates here, since there is a good deal of complexity that goes into their determination. They are typically generated on a case-by-case basis.
I can say that both us and our customers have been tremendously happy to have them as a business partner. No other carrier we have worked with has been able to deliver international shipments with such consistency and speed.
To inquire about DHL Express International, I recommend contacting their sales department.
The brands and services discussed in this article have been fairly slow to react to the paradigm shift in the nature of ad consumption. While countless Shopify app developers are marketing their discounted shipping rates to you, the very places they get their rates from are sitting quietly in the background. Bypass the middleman and get your own discounts in minutes!