30 Proven Ways To Reduce eCommerce Shipping Costs

Reduce shipping costs + free 24-hour shipping? Sounds impossible, right?

This news might be a relief – you’re not the only one struggling.

And it’s all thanks to a worldwide 6% bump in carrier costs.

However, shoppers still expect ‘fast and free’ shipping within 24 hours.

This is why we have studied the shipping cost reduction strategies of eCommerce giants – and devised these 30 strategies to reduce shipping costs for your small business:

How do I reduce shipping costs for my small business? 

▶ SET UP SHIPPING
1. Find the average shipping cost – and factor it into your pricing
2. Create shipping tiers to waive flat-rate shipping costs
3. Adjust your AOV to make up for the shipping cost
4. Use FOMO to charge for next-day delivery
5. Use your bestsellers to recover shipping costs
6. Cram more items with dimensional weight
7. Charge extra for gift packaging – or similar value upgrades
8. Get more people on your loyalty program
9. Let shoppers pick and pay shipping costs on holidays
10. Highlight your shipping policies better to reduce returns

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▶  SHIP FOR LESS
11. Negotiate lower rates with carriers
12. Switch carriers by costs, speed, package size, and weight
13. Reduce accessorial fees
14. Try lighter packaging – switch out packing material
15. Save costs on packaging
16. Don't ship with flat rate boxes, if you have varying SKU sizes
17. Use shipping rate software to find the best rates for your store

‍
▶ OPTIMIZE SHIPPING OPERATIONS
18. Integrate shipping software and automate the process (automate it)
19. Use carrier pickups to batch-process orders
20. Use ‘hybrid’ shipping for better shipping rates
21. Reduce the shipping distance of heavier items with fulfillment warehouses
22. Always get insurance
23. Choose ground shipping
24. Get prepaid labels (even if you've got a smaller order volume)
25. Offer a discount to customers for proof of delivery
26. Make sure you're getting the documentation right for international shipping
27. Enable pickup for surrounding zones
28. Buy competitor orders
29. Incentivize pre-orders
30. Open up a TikTok Shop for free shipping above $30 on repeat orders

30 Brilliant Ways To Reduce Shipping Costs

▶ SET UP SHIPPING

1. Find the average shipping cost – and factor it into your pricing

The goal here is to show the shipping as ‘free’ or make it ‘negligible’ – and factor in the shipping cost into your product price. Doing this helps you reduce shipping costs in the eyes of the shopper—all while allowing you to create a healthy margin. 

Often called the ‘flat-rate’ technique, this is how most eCommerce stores offer super cheap shipping costs. Let's understand this with an example:

How do eCommerce stores split shipping costs into product price?

Assumptions:

✅ Two products: A of $20 MRSP and B of $80 MRSP

✅ Shipping costs: A is $8/SKU and B is $30/SKU (domestic)

✅ Manufacturing cost: A is $2/SKU and B is $10/SKU

✅ No. of orders placed in a month: 50

✅ Max order limit: 5 SKUs for each product.

We’re also assuming A and B can be shipped in one package.

Revenue Calculation:

Total revenue: $5000 | Total manufacturing cost: $600 | Total shipping cost: $3950 | Excess shipping cost: $2050

Profit Margin:  $450 (just 9% of the revenue – which is almost dismal)

Adjustments needed: Price increase of $5 to $10 dollars for A and B, respectively to increase margin.

⚠️ Look out for: The pricing – it should remain competitive enough to get sales, but still cover shipping costs, without impacting the margin. So, how do you do it without adjusting the pricing? While this calculation is a really simple one, it’s clear as day that before you increase prices or cut shipping rates, you should: 

• charge a flat rate for shipping 
• create shipping tiers for early shipping and international shipping to drive more revenue 
• all while pushing for a higher AOV 

FURTHER READING: Pick the right product price: 8 eCommerce pricing best practices

2. Create shipping tiers to waive flat-rate shipping costs

Customers ordering locally should not bear shipping costs for international zones. However, no shopper would like to foot the extra 100 bucks it takes to ship out. 

That's why it's a better idea to study your order history. The goal here is to charge a small fee that bears the price of international shipping and boosts up the revenue. 

How to create shipping tiers?

✅ Find common combinations of order sizes in your store

✅ Calculate tiers for shipping costs based on each product/location. 

✅ Best practices dictate you have separate flat-shipping rates for:

• Next day delivery
• International shipping
• Large order sizes 

✅ Ideally, once you get the average shipping cost of each order, add a percentage of the cost to the pricing of each product and accordingly create tiers

We continue from the previous example. Average excess shipping cost to split per order = $40 (excess shipping cost / no. of orders). To offset this cost, we create the following tiers:

• Flat rate: $9.99/order
• Bulk orders: $5/order
• Early delivery: $14.99/order
• International orders: $24.99/order

Revenue Calculation:

Revenue generated: $5469.65 | Shipping cost remains: $3950 | Revenue (excluding total shipping cost): $1894.65

Margin: $919.65 (which is 16.8% of the revenue – which is better than before – but can be improved)

⚠️ Look out for: The profit margin – while some products sell for a 20% profit margin, and some beyond 80%, there’s ideally no limit. However, a good middle would be around 40 to 50%. In this case, however, a 20% margin wouldn’t allow growth, and any change in the type of orders would wreak havoc on the margins. 

If you notice closely, the shipping cost bites into the margin for early delivery and international orders – but there’s profit made on shipping high AOV products, even without the shipping fee. 

The takeaway here: Limit the order quantity of high-value/oversized items to reduce shipping costs – and always set shipping cost tiers for international orders. (this leads us to 👇)

3. Adjust your AOV to make up for shipping costs

It's worth noting that people will abandon carts faster than a Jaguar – the moment they see a $9.99 shipping for a $20 item. 

The way out? Set a shipping threshold for a certain AOV. The idea here is to push for more high AOV orders.

How to offset shipping costs with Average Order Value (AOV)?

✅ Option A: Offer bundles at the price of your AOV with zero shipping cost – combine heavier / larger items and lighter items for better cost per shipment. You can also try cross-selling heavier items to get more out of your orders

✅ Option B: Set up a higher cost AOV and waive off shipping completely – with another tier, where you charge very negligible shipping fees (ideally the same as your bulk order shipping) instead of your flat rate

This ensures that your more customers are veering towards higher AOV orders – which will cover shipping costs – all while being able to cram more stuff into single shipments.

We continue with the same assumptions from point 1, except the order variety is different. Since we waive shipping partially, more orders on an AOV basis are expected. 

Tiers:

• AOV of $140 & above: Free Shipping
• AOV of $100: $5/order
• Bulk orders: $5/order
• Early delivery: $14.99/order
• International orders: $24.99/order

Revenue calculation:

Total revenue: $6,094.86 | Shipping cost included: $2212 | Manufacturing cost: $784

Total shipping cost: $3730 |  Excess shipping cost: $1518

Margin: $1580.86 (nearly 26% of revenue)

Pro Tips: 

• Always account for the maximum possible shipping rates and distances when calculating shipping tiers (same goes for packages) – this way your actual costs always come below the expected costs
• Increase prices by 10% to see a profit margin that’s over 32% of the revenue
• Offer a $0.99 upgrade on checkout  – to smartly add to your revenue without increasing prices – attribute it to package protection/green packaging for high AOV orders

⚠️ Look out for: The degree by which site visitors are aware of your shipping policies – or else, you may see an unhealthy bounce rate, right from the category pages. The way out? We discuss ways, in the upcoming points 👇

4. Use FOMO to charge for next-day delivery

The idea here is simple: provide slow yet low-cost shipping for free (which is way lower than the shipping cost included in your price)

This technique uses three psychological effects: decoy effect, FOMO, and loss aversion. 

How to create FOMO so that you can charge for next-day delivery?

✅ 1st step: Create the decoy. Provide free shipping (but make it slow)

✅ 2nd step: Show what they will lose out on. Offer a next-day shipping charge 

✅ 3rd step: Harness the FOMO. Use microcopy like “delivering early”, “order within x to get by xx/xx”, or “free delivery expiring on xx/xx”

Here's a perfect example of this in action from Best Buy:

⚠️ Look out for: How you display pricing, especially on the font choice part – customers don’t really like to see a high shipping cost upfront. Instead, you can follow Best Buy’s policy and set free (but slow) shipping options, or you can always offer a clear explanation (in a smaller font) about your shipping. But how do you recover shipping costs?

We explain how in the next point. 👇

FURTHER READING: 20 Powerful FOMO Marketing Ideas for eCommerce

5. Use your bestsellers to recover shipping costs

The idea is to create a profit in terms of shipping costs when you sell a particular product that sells well. 

How to recover shipping costs by selling more best-selling products?

✅ Create a progress bar, so shoppers know how far they are from getting free shipping

✅ Cross-sell complementary products, so you can ship more out, without paying the shipping cost of 2 different products

✅ Tie in an upgrade at checkout – like gift wrapping for $3.99 (this helps create charm pricing, which makes customers believe they aren’t paying all that much – and are contributing to a greater cause)

⚠️ Look out for: The amount of cost you’re loading onto your price – the lower the cost added to the price, the better it is. Forecast how many bestsellers you need to sell to recover the shipping costs of your orders. Do this for all your bestsellers. 

FURTHER READING: How To Offer Free Shipping — And Recover Costs Too

6. Cram more items with dimensional weight

Dimensional weight (DIM) is about the space a package takes up. Different carriers have different factors for calculating this weight. 

However, there's a pretty neat way to use DIM. 

All you have to do: make the dimensional weight and the actual weight really close. 

For example, if a package weighs 3 lbs on dimensional weight, try adding in as much weight as 2.9 lbs. 

How to calculate dimensional weight to consolidate shipments?

✅ Measure the package in inches – the length, width, and height 

✅ Multiply the dimensions and divide by 139 or 166 – FedEx, UPS, and USPS have different DIM factors (the divisor)

✅ Then, weigh your package using a scale

✅ Choose the higher value between actual weight and DIM weight for pricing 

Pro Tip: If the weight is higher, consider a larger package, cause you can still cram more stuff, you as well may just take advantage. This ensures you don't pay extra to ship extra items in your orders separately.

⚠️ Look out for: How well the packaging holds – make sure you've packaged each item with enough flexibility – so that the items don't move enough, but also so that the packaging can take the blows of transit. 

7. Charge extra for gift packaging – or similar value upgrades

Gift packaging tends to be heavier. The extra load comes from the not-so-light cardboard notes and other decorative items.

Thus, the best way to reduce shipping costs (and reduce cart abandonment in some cases) is to charge for gift packaging. 

How to offer value upgrades on checkout?

✅ Show quick visuals of how a gift package looks – this will convince shoppers of the value (if needed some slow-selling stuff, for which the inventory costs are biting into overall revenue)

✅ Offer multiple shipping speeds with some goodies – like package insurance (call it ‘package protection’) or premium packaging materials that can be re-used like insulated boxes (this works especially well for food brands)

✅ Unlock a membership to your free-shipping loyalty program for a fee – this fee should be large enough to incentivize shoppers to keep shopping – but not large enough to make them bounce off (more on this in the next point)

⚠️ Look out for: How well you explain your gift packaging – ensure you've included a short explanation along with visuals of your gift packaging in your cart or checkout page. 

8. Get more people on your loyalty program

Upselling a membership for a small premium lets you offset shipping costs by offering perks that don't require you to foot additional shipping costs.

It's like Amazon Prime (but cheaper). 

How to set up your loyalty program to reduce shipping costs?

✅ Set up extra benefits like free samples with every order – or extended warranty, community access, early access to sales, ‘$X Off every order’ – the idea is to keep them shopping

✅ Consider introducing terms like 5X points for high AOV purchases – for example, if we are to take the $140 AOV from our previous examples, the AOV for a loyalty program would be much higher (by about 20%)

✅ Consider offering perks like free shipping for a period – like a year or shorter (the period will depend on your rebuy period – go longer if your products have a longer rebuy cycle – like gym equipment)

⚠️ Look out for: The trust-level – you will need an exceptionally trustworthy brand value to make this strategy a success – also, your products shouldn't be a one-time buy item. 

FURTHER READING: 14 eCommerce Loyalty Programs Backed By Science (Examples)

9. Let shoppers pick and pay shipping costs on holidays

Holidays are prime time for surcharges. Sure, your packages will get delivered (but, you may end up paying a whole lot more). Also, one free 5-day shipping option won't cut it during the holidays. 

How to reduce shipping costs around the holidays?

✅ Step 1: Start early – run a notification bar, well in advance about shipping date cuts (like an ‘order now to get it by {holiday}’ messaging)

✅ Step 2: Ensure your most loyal and recurring customers know about the cutoffs – email them when you start (and send an SMS when the cutoff ends)

✅ Step 3: Create tiers for shipping speeds – along with relevant holiday shipping costs right from the product page – this will enable you to offer an option that suits shoppers’ budgets.

✅ Step 4: Create a last-chance deal to clear out high-AOV items with paid express shipping

⚠️ Look out for: How you display holiday shipping rates – show clear delivery dates – but, don't show the entire costs upfront (or else, a $140 delivery might scare them off) – say something like “Get it by XX/XX with Express Delivery by $XX.XX.”

10. Highlight your shipping policies better to reduce returns

Returns bite into your profit margin – especially, if they keep happening regularly. Moreover, if shoppers aren’t aware of your policies, they won’t just place an order. This is why if you want to reduce costs and get more orders, make sure to check for the following:

How can I effectively communicate my shipping policies to customers?

✅ Set up a sticky live chat and handle FAQs on how to: report missing packages/items – track shipments – initiate a return

✅ Highlight iconography about delivery speeds and return processes – for each product on the category page, above the fold on the product page, below the order summary on the checkout and cart pages

✅ Show correct product photos: Make sure your product photos show the product in a real-world setting, with the package it will come in – if possible, feature an unboxing video from shoppers

✅ Inform shoppers about how to be eligible for returns – ideally the steps – or what to do when receiving an order – like recording an unboxing

✅ Validate addresses using geolocation on checkout (autofill some form fields) 

✅ Show a quick summary with a warning – reconfirm if the shipping and billing addresses are different

FURTHER READING: Reduce eCommerce Returns with Intelligent UX (+ Smart Handling ideas)

▶  SHIP FOR LESS

11. Negotiate lower rates with carriers

How do you get the best shipping rates? Ship more. It’s as simple as that – most businesses that ship a minimum number of parcels per month, get qualified for huge savings from carriers (think discounts starting from 30%). 

If you’re wondering “how many orders do I need to negotiate better shipping rates” – the number is not 1000 orders per month, 50 to 100 orders will be enough to get started. 

Ultimately, there are actually five extremely specific ways that deserve a point on their own, which we have listed down below (and will be covering in detail in the following points):

How to negotiate lower rates with carriers?

✅ Step 1: Choose the right carrier

✅ Step 2: Reduce surcharge fees and cut down packaging sizes and dimensions

✅ Step 3: Don't use flat rate boxes, if you have varying SKU sizes

✅ Step 4: Automate shipping – the best discounts and the best possible rates with customer satisfaction 

✅ Step 5: Optimize shipping operations – like scheduling pickups, using hybrid shipping, or using data to reduce shipping distances

Want more ideas to get sales? Also read: How To Increase eCommerce Sales: 27 Immediately Actionable Ideas

Pro Tip: Aim to ship out daily orders, if possible (but every alternate day is fine too)

12. Switch carriers by costs, speed, package size, and weight

Sticking to one carrier is a sure-shot way to increase shipping costs. 

Try exploring options like shipping brokers for postage, packages, and carriers. 

For example, shipping brokers like Pirateship will help you get the best shipping agreements for your packages. 

Meanwhile, sites like stamps.com or Etsy shipping help you find postage at commercial brokered rates. 

How to choose the right carrier based on your need?

✅ How cheap are 1 to 2-day deliveries – this rate changes for each carrier across zones (USPS is somehow always cheap, in this case)

✅ Check the declared value surcharge – most carriers will always charge you for this (cause the more expensive the package is, the more careful carriers have to be)

✅ Is there a delivery reattempt charge  – compare between carriers 

✅ Do packages need to be compulsorily boxed – anything UPS has to be boxed

✅ How well does the carrier deliver fragile items and eatables – USPS isn't particularly reliable here

✅ Is there a first-time discount – for example, FedEx gives a first-time discount for creating an account

✅ Are there options to pick up on back routes – routes through which shipping vehicles return to the depot 

✅ When are you charged for return labels – FedEx doesn't charge till the label is used, (meaning returning labels are essentially free till used)

⚡ Quick takeaways:

• For extremely light packages (under 2lbs): USPS offers the cheapest shipping rates under 2lbs with Priority Mail and First Class Mail
• For light packages (2 to 4lbs): USPS Priority Mail and UPS are awesome – especially USPS (free boxes) and if speed’s primary, UPS
• For heavier packages (over 5lbs): FedEx one-rate boxes are awesome – and also, if you can negotiate bulk discounts, but for slower deliveries USPS Ground Advantage is pretty sweet 
• For overnight delivery: UPS or FedEx, without batting an eyelid
• For slower deliveries: USPS Priority Mail boasts a competitive price, but transit times can vary

⚠️ Look out for: The actual weight – and if you can save with a prepaid label. By this we mean, get a postage scale. Calculate the actual weight as well as the dimensional weight. Depending on which gets you the better deal, buy a prepaid label. 

13. Reduce accessorial fees

Also known as surcharges, accessorial fees are costs that shipping carriers charge when they provide a service to you (like handling a C.O.D. order). However, you can always reduce most of these charges, with these clever hacks:

How to reduce shipping surcharges?

✅ Ship to access points, so shoppers can pick the package up (lower cost for you)

✅ Charge shoppers a fee for C.O.D. orders

✅ First verify the address with USPS (reduces address change, failed deliveries)

✅ Avoid order pickups (for small businesses) 

✅ Schedule order pickups on alternate days (if needed drop off orders)

✅ Skip verification for orders (will lead to a surcharge)

✅ Opt for prepaid shipping (heavy discounts)

✅ Keep weekday shipping on focus – weekend surcharges cost heavy

✅ Avoid pickups for returns so as to cut down on shipping for returns

✅ Send printed ‘drop at access point’ return labels with your orders – but set them to expire within your return period (you can use FedEx for this – they don’t charge till the label is used (meaning returning labels are essentially free till used)

14. Try lighter packaging – switch out packing material

Poly Mailers or corrugated boxes come with lesser weight, dimensions, and lower shipping costs. 

But, how exactly do you make sure that you actually reduce shipping costs? Here are some ideas:

Creative ways to optimize packaging for lower shipping costs: 

✅ Make the package stackable – or else, be prepared for an ‘additional handling surcharge’ (most carriers charge this, cos of truck space)

✅ Use a vacuum to suck out the air inside – if you're using polymailers 

✅ Go modular, if you can, when designing packaging – so you can disassemble products to fit better in boxes (this comes in as a life-saver for furniture, but not car parts)

✅ Use tubular packaging for fabric/wallpaper – to retain protection, usability, and lower costs

✅ Make sure you aren't using only 30% of the container – try making the container/packaging as close to the product as possible

✅ Avoid weird/irregular shapes that may end up taking up more space

✅ Use bubble/padded envelopes for extremely light or small items – below 16 oz

Pro Tip: If your polymailer gets bulged, with the product package in it, fill it with packing peanuts, so the rest of the package gets fluffed up, evenly, and becomes stackable. 

Remember: Even air has weight. 

⚠️ Look out for: Instant recognition – avoid over-branding on your boxes to reduce doorstep thefts. 

15. Save costs on packaging

Stocking up on packaging eventually leads it to become slow-moving. While it may seem trivial, you can cut down on these costs even further. 

Here are some ideas to try out for reducing shipping costs: 

How to reduce cost on packaging?

✅ Reuse/recycle packages (if needed, just paste a sticker over them)

✅ Design a  product package that can be shipped (as is)

✅ Reuse packaging material as much as you can – like bubble wrap from orders you’ve received before

✅ Avoid overbuying in bulk – compare and source 6 months of supplies based on your order volume from brands like Staples, EcoEnclose, PackagingPrice, PaperMart, The Boxery (here’s the complete list)

✅ Instead of bubble wrap, opt for air pillows (much lighter) – or use newspapers – you can get about 25lbs of newsprint paper also from Amazon for $32 

✅ Get free packaging from carriers (most will give you one) – for example, FedEx gives packaging free, when using any Express service – even USPS gives you free supplies

⚠️ Look out for: 

• Sustainability initiatives – cardboard boxes aren't eco-friendly – and, so aren't poly mailers. Thus, it may not be a great idea to use them, if you are supporting green initiatives
• Polymailers ripping – packages can rip when sent through machines, so it's always a good idea to tape down corners (tape is always a great investment)

16. Don't ship with flat rate boxes, if you have varying SKU sizes

Flat-rate boxes are champions for long-distance shipping – most carriers will ensure you get the service required for a relatively lower cost. However, if you have products that won’t fit in boxes provided by shipping companies, a flat rate box may not be for you. Here are some scenarios, when you should absolutely avoid flat-rate shipping:

When to avoid shipping flat rate?

✅ For shipping over short distances (check which mode offers better pricing)

✅ For shipping low-weight products – or, rather products that have an average weight limit.

✅ For shipping unnaturally large/weirdly shaped products – like car parts will be troublesome – for example, there's little room to fit a muffler in a box – or a car hood

How to ship and save with flat-rate boxes?

✅ Buy corrugated cardboard separator sheets the size of your chosen flat rate box – so as to make the product fit in layers within the boxes

✅ Some carriers recommend using tubular packaging for fabric/wallpaper, to retain usability and lower costs – here’s how UPS recommends packing products in their flat rate boxes:

Tl;dr: If you sell items that don't easily fit in boxes, don't go for flat rate shipping

17. Use shipping rate software to find the best rates for your store

Usually before checking for the lowest shipping rates, founders often need to consider these three questions:

• Check where you’re shipping to
• How fast do you need to get it there
• How much reliability do you want 

Therefore, the best shipping rate for your small business may not be the cheapest one. However, bulk shipping providers like GoShippo, EasyShip, Shopify Shipping etc., can take care of all three factors, all while saving massively on costs. 

Even if you don't have a track record of sending orders, shipping software can make it really easy to start off with finding rates that are at least 70 to 80% lower than the retail rates.

What kind of rates do you get from shipping rate software?

For example, here’s what GoShippo quotes (approx): for 1-day shipping of a package weighing 2lbs and 15x14x5 inches size from New Jersey to DC:

• USPS priority mail express: $32.40 + Free tracking + $100 insurance
• UPS Next Day Air® Early: $66.40 – however, the average retail rate for USPS Priority Mail Express is around: $43.36 and UPS retail rates put next-day air at nearly 120 bucks

Plus Go Shippo gets you FedEx Ground Economy, without signing up for a contract.

⚠️Look out for: The plan limits – you can outgrow the limits of plans pretty quickly, the long run is always led by carriers themselves – at which point the shipping software remains useful for store integrations and managing shipments. In our opinion though, paying for shipping software is better than losing hundreds and thousands in shipping costs and basic convenience. 

▶ OPTIMIZE SHIPPING OPERATIONS

18. Integrate shipping software and automate the process (automate it)

Other than automatically finding the lowest rates, you can also automate the pickups, order packaging, and transactional emails your shoppers receive when orders are packed, in transit, and out for delivery.

How to automate your shipping processes?

✅ Use 3rd party shipping software like Shipbob, PirateShip, GoShippo, etc – or directly integrate your carrier into your backend

✅ Integrate shipping APIs from carriers like FedEx, UPS, and USPS directly into your store’s backend

✅ Set rules for when emails get sent out and when work orders are placed (make sure you periodically review the flows)

⚠️Look out for: The automation rules – Be careful when you set rules, for example, always flag orders in surcharge ZIP codes, or beyond a permissible distance – it’s always best to set rules for box sizes by the size of SKUs.

19. Use carrier pickups to batch-process orders 

Sending out parcels the moment you receive them? It's time you reconsider. The only problem here is that it's not ideal for reducing shipping costs. 

Thus, your best bet, as a small eCommerce store, is to increase your order volume. Make sure you have clear dates written out, or a timeline, so shoppers know exactly when their parcel can be delivered.

How to reduce shipping costs with carrier pickup?

✅ Avoid pickups if you’re just starting, and don’t have a huge order volume to begin with – but visit your carrier every alternate day (as compared to every day – fuel cost savings are always a plus)

✅ Or, schedule pickups once in two days. For example, UPS will pick up your order shipments 3 days a week for $21.75 This lets you get a handle on shipping costs and volume

✅ Schedule pickups on the back route or Daily On-Route Pickup as UPS calls it for $9.90/week (usually picked up after 1:30 PM) 

⚠️ Look out for: The day of the pickup – most carriers will charge you more for weekend pickups (and deliveries as well) – which is why you should never ignore next-day delivery packages – or try to divide up the order (which can lead to delayed shipments and weekend delivery surcharges). 

20. Use ‘hybrid’ shipping for better shipping rates

Weekend deliveries cost more – but, not as much as delivering to a doorstep.

Fun fact: last-mile delivery takes up more than 50% of the share of the entire shipping cost. Why? For starters, carriers have to go out of their regular routes. So, how does hybrid shipping balance out costs vs speed?

Hybrid shipping, also called multimodal delivery, just switches between carrier modes for better rates. Meaning, your packages travel a ‘bit’ longer, but you don’t have to worry about it. 

Most carriers have programs built for home delivery like UPS Surepost, FedEx Ground Economy, DoorDash, etc.

For example, in 2025, a 2-lb package, UPS SurePost starts from $13.21 in zone 1 to $17.69 in zone 8 – with a maximum weight of 70lbs (yes, that means DIM weight as well).

While UPS Surepost is cheaper, FedEx Ground Economy is way faster. However, this may change as UPS Surepost is no longer associated with USPS – so it’s better to expect a change in costs by up to 10%.

Unfortunately, FedEx Ground Economy is contract-based. 

Pro Tips: 

• Opt for regional carriers – if you’re shipping (almost) regularly to a particular area – like CDL Last Mile Solutions for the East Coast (NY, NJ, CT, PA, DE, DC, MD, VA) or OnTrac for the West Coast (AZ, CA, CO, ID, NV, OR, UT, WA)
• Deliver to an access point/post-office – near a particular address. The benefits of doing this? Lower shipping costs all the way. Remember: It’s always cheaper to deliver for pickup to all kinds of post offices/pickup points/any regular routes

Do read: Labor Day Marketing: 15 Amazing Ideas and Examples (2024)

21. Reduce the shipping distance of heavier items with fulfillment warehouses

More distance. More shipping. 

That's the way the tale goes. This is where you should take inspiration from Amazon – ship out heavier packages to 3PL or fulfillment centers. 

The result? You will be able to charge better for faster shipping – and bring down delivery costs by a lot. 

How to effectively skip zones?

✅ Use a 3PL or a fulfillment center – only feasible when regular orders are possible

✅ Consider shipping in bulk to a friend/forwarder in a far away zone, if you’re just starting out (if you’re in CA, send in bulk to Ohio – which will allow you to get better costs in the long run)

✅ Partner with last mile carriers (like Doordash, Postmates, etc.) or 4PL providers, to enable doorstep delivery (they will automatically ask for some amount of stock to be kept in their warehouses for a fee)

✅ Get storage space on rent across the country and hire employees in those strategic locations to pack and ship orders regionally 

⚠️ Look out for: The areas you’re targeting – try covering areas you consistently get orders from – or plan to expand to – like there’s no point setting up a fulfillment center in Alaska, just because you’ve got 2 orders till date.

22. Always get insurance

Imagine this: you’re sending a surprise gift – and you’re completely unsure if the recipient will be home. 

Thus, if you're paying for gifting, value upgrades like ‘require signature’ act as insurance – while helping you secure better CX.

This can lead to a surcharge (increase in shipping costs). But, you can get customers to cover those costs by offering smart value upgrades like:

• Require a signature on delivery
• Package protection/insurance

⚠️ Look out for: Over-reducing cost – always get third-party insurance coverage on packages customers don’t pay for. This also ensures that there is no shrinkage cost.

23. Choose ground shipping

Ground shipping is great for reducing shipping costs – and the only way to ship, if you sell perfumes with alcohol, CBD, or vape products.

Ground shipping helps you cut down on delivery times as well as keep costs in balance. And, this is applicable across all order sizes. 

⚠️ Look out for: The cheapest option – opt for carriers that offer better cubic rates as well as deliverability. 

24. Get prepaid labels (even if you've got a smaller order volume)

As we said earlier, if you can cram it, why not do it? 

Prepaid shipping labels are awesome in a similar manner – most carriers give off about 20% discounts for pre-paid shipping labels. For example, UPS offers deep discounts based on your order volume – and, for creating an account.  USPS, even gives up packages, for FREE, if you order em’ online. 

The policy is, ‘it fits, it ships – it just can't be over 70 pounds (domestic).’

Pro Tip: Always use a thermal printer to print labels (printing out of a printer always leaves out extra paper and costs you in terms of time).

⚠️ Look out for: Unused labels – most carriers have a time limit when it comes to refunds for prepaid labels (also always take quotes from other carriers as well). 

25. Offer a discount to customers for proof of delivery

Security checks like “require signature” don't come standard with every shipping option. You can skip them entirely – and lower shipping costs. 

All customers have to do is record that they received the package. 

This lets you get a review. Create an awesome post-purchase experience. All while pushing their next purchase. 

You can also get customers to start a subscription or get them started on repeat sales. This will help bring down shipping costs by creating regular shipments.

⚠️ Look out for: The trackability – make sure you’re sending some tracking options/insurance. Or else, you stand to lose a customer and order. 

FURTHER READING: 26 Brilliant Ways To Boost eCommerce Repeat Sales 

26. Make sure you're getting the documentation right for international shipping

Or else, you may just as well say goodbye to your order. 

If you're expediting delivery by air, make sure your packages describe what your packages contain. 

This helps avoid returns by customs – and lower shipping costs, in general. 

27. Enable pickup for surrounding zones

There's no meaning in offering a free 5-day delivery when a shopper lives 5 streets down your office.

This is why it's much better to enable geolocation—to allow customers to pick up their orders from your location/store. 

Or, you can just use Doordash to pick up and deliver your order (like Ulta Beauty did). 😉

⚠️ Look out for: What costs do you factor in if you ship locally by yourself – be sure to factor in labor, gas, and shrinkage in your costs. 

28. Buy competitor orders

We aren't talking about buying an order from Amazon or an eBay store. Rather, find products from brands that offer similar products with free shipping. 

Doing this will help you identify where exactly your competition is cutting down on costs. 

Check their shipping labels, carrier, packaging design, and, last but not least, the product.

⚠️ Look out for: What brands you compare – compare packages from larger retailers like Sephora or M.A.C. Beauty and smaller brands such as Drunk Elephant. 

29. Incentivize pre-orders

Pre-orders help you jump ahead of surcharges – realize the COGS (cost of goods sold), even before they have sold. 

The best part – you get the luxury of planning. 🤩

You can implement this strategy if you're bringing a product back to stock – or launching a new product.

⚠️ Look out for: Limiting to only one type of campaign – also try this strategy on products going out of stock. 

FURTHER READING: eCommerce Product Launch: The Most Comprehensive Guide Ever

30. Open up a TikTok Shop for free shipping above $30 on repeat orders

If you’ve ever looked for a reason to open a TikTok shop, here's one: it helps you cut down on shipping costs. 

How: TikTok reimburses you for every repeat order above or equal to 30 USD.

All you have to do is ensure that your first order on TikTok shop gets through with your own shipping. 🤘

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‍⚠️ Look out for: You will need repeat orders – which is why, it may be a great idea to run re-targeting ads via TikTok ads – or via your email list. 

FURTHER READING: TikTok eCommerce: 40 Brilliant Ideas (With Examples) For 2024 

People Also Ask

How do I get the cheapest shipping for my eCommerce store?

By looking at who’s providing the cheapest shipping for your product(s). Here’s an example of a package weighing 8 lbs – looking to be shipped from Las Vegas to NYC. 

Here’s what USPS’s shipping calculator shows:

Seems pretty straightforward, right? Normally, this is where most people would stop. However, we took it a step further – and looked at Etsy’s shipping calculator for the same package:

The same package, if shipped in a Flat Rate box, came down to $12.25 (along with perks like tracking and insurance).

Meanwhile, if the same package could be packed in a padded envelope, here’s where the cost would come down to:

The same product – with different packaging and delivery timelines, is all it takes to find the cheapest shipping option. So, no, USPS is not the cheapest or the best option. 

Which brings us to 👇

The best way to reduce shipping costs? Get more orders

You can negotiate volume shipping discounts when you're 2X-ing your conversion rate.

But, how do you do that?

This is what Convertcart solves. 

Remember: 98% of visitors who visit an eCommerce site—drop off without buying anything. 

Why: user experience issues that cause friction for visitors. 

We've helped 500+ eCommerce stores (in the US) improve user experience—and 2X their conversions. 

How we do it:

Our conversion experts audit your site for FREE—identify UX issues, suggest changes to improve conversions, and start getting more orders.