It’s natural to be curious about the cheapest way to ship a package when your customers want free deliveries more than fast ones.
The State of Ecommerce 2021 Study confirmed the average customer prefers free over fast. In fact, 59% of consumers said free shipping was key to a positive online shopping experience, while only 40% said the same about fast delivery.
However, ecommerce business owners have more than just the customer’s preference to worry about. With the COVID-induced disruption in logistics and the labor shortage, free deliveries are now slower, and fast deliveries are more expensive.
As a business, you still need to keep your costs to a minimum. With that in mind, we’ll explain what the cheapest way to ship a package is so you can trim your costs while earning some points with your customers.
- Factors That Impact Shipping Costs
- The Cheapest Ways To Ship Packages Based on Delivery Speed
- Cheapest Way To Ship a Package Based on Weight
- Final Thoughts: The Cheapest Way To Ship a Package for Ecommerce Businesses
Factors That Impact Shipping Costs
Your package’s shipping costs depend on various factors, so there’s no one go-to service that’s the cheapest. You’ll need to look at these factors every time you want to ship a package to determine what the cheapest way to ship the package is.
1. Delivery Speed
While many of your customers will select free delivery over fast delivery, a good portion of customers will still want their deliveries fast.
Naturally, the faster you want to deliver, the more you’ll pay. All shipping services offer multiple shipping options, including fast deliveries, so you can select one based on how fast you want to deliver.
For example, if you want to deliver a package under 10 lbs within 2–3 days, USPS Priority Mail is your best bet, but FedEx or UPS offer better rates for heavier packages.
Heavier packages cost more to ship.
For example, for packages under one pound, USPS First Class Mail or USPS Media Mail (if you sell physical media) is your best bet. On the other hand, FedEx and UPS Ground offer better rates for shipping a heavy package (more than one pound but less than 10 pounds).
Shipping prices for oversized packages are higher because they take up more space. That’s why a two-pound package can sometimes cost more than a three-pound package — you packed the goods in a bigger box.
USPS Priority Mail, First Class Mail envelopes, and flat rate envelopes cost the least when you want to ship small packages. Alternatively, you can select cubic pricing with USPS Priority Mail (provided the package is under 20 lbs) or pay as per the dimensional weight.
Cubic rate pricing and dimensional weight are opposites. With cubic rate pricing, you pay a reduced rate for heavy but small parcels. In contrast, with dimensional weight, you pay more if the dimensional weight exceeds the real weight.
Here are the formulas for both metrics:
Cubic Feet = (Length x Width x Height) / 1728
Dimensional Weight = (Length x Width x Height) / Divisor
Shipping carriers use a different divisor for calculating the dimensional weight:
- Divisor for USPS: 166
- Divisor for FedEx: 139
- Divisor for UPS: 139
You might want to try using FedEx’s dimensional weight calculator to understand the concept a little better.
Since USPS has the largest divisor, it's the cheapest option under dimensional weight pricing.
The U.S. has eight shipping zones. The farther your zone is from the destination zone, the higher the shipping rates. The cost of shipping is even higher for international shipping.
You can save money on shipping by setting up warehouses across shipping zones. A well-spread distribution center network also helps you deliver packages faster.
Naturally, setting up a distribution center network is generally viable only for larger companies. If your sales volume is low, you won’t save enough on shipping to offset the costs of owning and maintaining multiple distribution centers.
5. Other Factors
Other factors like insurance, handling fees, and delivery guarantees cost extra. The pricing for these also differs among delivery services, so you might want to look up their costs before settling on a shipping company.
When figuring out the cheapest way to ship a package, you need to consider several variables, and things can get confusing quickly. So let’s look at your cheapest shipping option based on two of the most important factors: speed and weight.
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The Cheapest Ways To Ship Packages Based on Delivery Speed
Short delivery times translate to happy customers. However, you need to find an affordable shipping method to keep your costs minimal.
To help you achieve that, let's explore the cheapest way to ship a package based on the delivery speed below.
Cheapest Way To Ship a Package for Overnight Delivery
Overnight deliveries are expensive, no matter which shipping solution you choose. The cheapest option among major carriers is the USPS Priority Mail Express service.
The service guarantees one-day delivery but sometimes has a two-day delivery window. That means your customers won’t receive the delivery after a business day even if they wish to.
Another problem with USPS Priority Mail Express is that they’re not as reliable as FedEx or UPS with overnight delivery. The guarantee essentially means they’ll refund the money for late delivery. That doesn’t help you much when you need to answer your customers.
USPS will save you money, but it’s your decision whether the low cost makes up for a few upset customers. You might also choose to decide based on your broader shipping strategy.
Cheapest Way To Ship a Package With a Two-Day+ Delivery Window
USPS Priority Mail is the cheapest option for two-day shipping or longer delivery times. However, it’s best when you have more leeway in terms of delivery time. While USPS claims that the typical delivery time is 2–3 days, the delivery time could vary significantly in some cases.
If you can’t afford to deliver late, it’s best to spend a little extra and ship the package via FedEx or UPS.
The cost is considerably higher than what you’d pay the U.S. Postal Service, but FedEx and UPS guarantee delivery times, which is excellent if you want to ensure complete customer satisfaction.
Cheapest Way To Ship a Package Based on Weight
Weight is another factor to consider when determining the cheapest way to ship a package. Things get a tad more involved when you factor in dimensional weight, but we explain everything you need to know below.
Cheapest Way To Ship a Package Lighter Than Two Pounds
In general, USPS shipping offers the best rates for packages under two pounds. USPS First Class Mail will cost you the least when your item weighs one pound or lower. However, use USPS First Class Mail only if you’re not too concerned about reliability.
FedEx and UPS are cheaper for packages that weigh between one and two pounds, provided you can escape the dimensional weight penalty. In other cases, you’ll still find USPS to be the most cost-effective.
Cheapest Way To Ship a Package Heavier Than Two Pounds
FedEx Ground or UPS Ground is generally cheaper for heavy items. Among the two shippers, you might be able to save a little extra with FedEx because it usually provides a discount for signing up online.
The only problem is when FedEx and UPS look at a package’s dimensional weight. For example, if you’re shipping a 10-pound item in a large box (15 x 15 x 15), FedEx or UPS will assume the rate to be 24.28 lbs, calculated as:
(15 x 15 x 15) / 139
You might need to reassess the rates if you incur a dimensional weight penalty (which applies to packages larger than three cubic feet or 5184 cubic inches).
But there are a few other exceptions here. USPS flat-rate shipping rates can be cheaper in some cases.
For example, you ’ll save money with USPS flat-rate packages if:
- You can fit a package lighter than two pounds into a USPS Priority Mail small flat-rate box.
- You can fit a package heavier than two pounds and lighter than three pounds into a USPS Priority Mail flat-rate medium box.
- You can fit a package heavier than five pounds into a USPS Priority Mail flat-rate large box.
In any other scenarios besides those listed above, you’ll want to go with FedEx or UPS Ground.
Final Thoughts: The Cheapest Way To Ship a Package for Ecommerce Businesses
You want to ship packages quickly and for as little money as possible. But as a small business, margins are crucial to survival and securing your bottom line, so you need to find the right balance between speed and cost.
In any case, it’s best not to only look at the price. Finding a cheap shipping option can save you plenty of money, but you should also consider the implicit costs of using an unreliable service.
Now that you know what the cheapest way to ship a package is, you’re in a better position to pick between the U.S. Post Office, FedEx, and UPS based on the specifics of the package.
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