How To Maximise Your Shipping Costs (Minus The Anxieties)

This guide for picking shipping companies is for sellers to know how to save money.
Knowing weights is essential.
Learn eBay’s Shipping Calculator and use rulers to measure packages; overweight and oversized items cost more.
Buyers want quality and savings while sellers want profits and cheap deliveries.
Should you use USPS & UPS along with eBay or PayPal? You should know also about other alternatives like FedEx.
USPS is for items at less than 2 lbs weight. CD’s, DVD’s, books and software can be shipped as Media Mail. Money is saved but there are slow shipping times. Books sent inexpensively from AK to NC took 2 weeks.
Cheap shipping packages from NC to NY took 5 days.
It’s viable because of costs. Savings can be at 70% over Parcel Posts. Shipping small items using First Class mail is better. With items weighing 5oz or less, use First Class. Use Media Mail for heavier items.
Parcel and Priority Mail sometimes cost the same. Priority Mail also provides free boxes and flat rates. Both ship inexpensively to every state but some sellers don’t send to AK and HI. The USPS ranks first in international shipping; they ship overseas inexpensively.
UPS Ground costs keep customers wary. But the USPS will deliver to PO Boxes while UPS/FedEx won’t. eBay sellers should get a UPS account.
Discounts are based on the number of shipments and can be substantial based on UPS revenue. Save money with UPS by not shipping to residences. Sellers using only UPS don’t give customers better alternatives.
Consider FedEx even though it doesn’t have eBay’s calculator.
PayPal’s FedEx debit card records costs. You have to enter FedEx tracking information manually.
If FedEx is faster and costs the same as customer choices, we use FedEx. However, FedEx charges more when shipping to residences.
Get accounts with UPS/FedEx and get discounts from their sales reps.
Compare costs until you know the cheapest rates. A 40 pound package from NC to CA costs $37.79 using USPS and takes 7 days, $44.82 at UPS Ground at 5 days, and $30.00 at FedEx Ground at 5 days. Here, FedEx is cheaper.
For books and media, USPS Media Mail costs $14.14 at 7 days.
Consider added costs and the costs from the 3 carriers including UPS and FedEx discounts. The Post Office will retrieve items from homes; UPS and FedEx also will but at a price.
Packaging materials matter so over pack instead of under packing. Weigh after packaging and before making shipping labels.
Reuse viable packaging materials to reduce costs. Tell customers you use recycled materials.
Add handling fees for USPS and UPS. FedEx and UPS charge more for shipping to AK, HI. We use the USPS for AK and HI.
When using flat rates, weigh the package and calculate for the farthest location from your area. Use separate rates for AK and HI.
Sometimes shipping costs rise because of mistakes. Don’t ask the buyer for extra fees. The customer is not responsible for shipping errors.
Compare costs with delivery times.
Under 2 lbs it’s the USPS, at over 2 lbs, it’s the FedEx or UPS unless it’s for very rural places or AK, HI, or PR. UPS and FedEx charge extra for extreme rural and residential deliveries while USPS doesn’t.
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I am in the order fulfillment business and really enjoyed your great article about shipping strategy. For some reason the details of shipping costs are rarely discussed in forums and blogs.
One area that everyone finds confusing is UPS, FedEx and DHL surcharges. The base rate is based on package weight and destination zip code and base rate look up charts are provided on each carrier’s website.
We have worked with all the common carriers, but have found UPS to be the best except for packages under 2 pounds and international shipping and for these we use USPS because of cost.
There is a long list of possible UPS surcharges to be added, but the main ones are:
Base Rate = The base rate per package depends on if you have a daily pick up contract with UPS (standard rate) or if you drop off packages at a UPS store (retail rate). Most of our clients use the retail rate when figuring their s&h fees.
Residental Fee = $1.95 for UPS ground or $2.30 for UPS air. Every address in the US has been pre-classified by UPS and they will add the residential surcharge as needed. Some online merchants ask their customers if they want their order shipped to their business address just to avoid the residential surcharge.
Fuel Surcharge = About 11% for ground or 36% for air, but the rate can and does change every few months. To figure the cost, multiply the current percenage (which is listed on the UPS website) times the base fee other surcharges.
Delivery Area Surcharge = For certain rural zip codes (the list is on the UPS website) there is a $1.55 fee for commercial or $2.35 fee for residential delivery. Online UPS cost calculators have the rural zip code list built in.
Oversize Fee = For cartons that are more than 5,184 cubic inches in volume (L x W x H) a minimum weight may be used in place of the real weight. This is a complex calculation that is best done by the UPS rate calculator in the eBay system or the UPS website.
In our experience with UPS, surcharges average about 24% of the total package cost and so it is important to understand what these costs are and how they are calculated.
It is true however that UPS is still cheaper than USPS for heavier packages in almost all cases and especially when you consider the $100 of free transit insurance that is built into the UPS base rate.
In any case, I hope the above information proves helpful to your readers.
John Lindberg – President
EFULFILLMENT SERVICE INC.
http://www.efulfillmentservice.com