To round out the craziness of Cyber Week, if you’re looking for local deals on artisanal products, Small Business Saturday is a sales day not to miss. It’s always the Saturday after Thanksgiving, and a great time to support small businesses. Particularly this year, small businesses have been hit hard by closures due to the COVID pandemic. This week might be a great time to show them a little love.
What this annual sales holiday means for small businesses is a huge demand for quick order turn around early in December. This begs the question: What is the best shipping method for small businesses? Overall, if you’re fulfilling orders yourself and you don’t have huge volumes, the United States Postal Service (USPS) is overall likely your best option. They offer the cheapest rate, but don’t have the fastest delivery guarantees.
In case your business is a bit more nuanced, you know that shipping cost can be one of the largest expenses within your fulfillment and logistics budget. Here is a checklist of various shipping options that take into account delivery speed, parcel size, and cost.
If You Have Small Packages
The USPS is usually the best fit when it comes to shipping smaller and lightweight items in both cost as well as convenience. If your products are under five pounds it is hard to beat their rates and in general USPS will give you the best price for distance traveled, as well as speed.
There are a few different options within the USPS suite of services. Priority Mail is the most used. It includes packages up to 70 lbs (and you do not need to weigh your parcel if it’s under 70 lbs.). Priority Mail Flat Rate is a subset of that which is calculated on the size of the packaging (which they supply for free). All flat-rate options ship Priority (with a 1-3 day delivery window). The prices start from $7.55 for a Priority Mail envelope to $18.70 for a large box. (Note that these are commercial rates, and individual prices are a bit higher.)
Some additional features if you choose the USPS:
- Free package pickup service at your home or office
- Includes USPS tracking and up to $50 of insurance with most shipments (restrictions apply)
- No surcharges for fuel, resident or rural delivery, or Saturday delivery
- Flat Rate, regional, and prepaid pricing (retail only) available
Other shipping options include Priority Mail Express (overnight), Retail Ground (two to 8 business day delivery time), as well as Media Mail for books or other media types.
If You Have Large Packages
For larger shipments UPS (United Parcel Service) is likely to be the best option. Unlike USPS, they don’t have a size limit when it comes to their services, so anything over 70 lbs. is best shipped via UPS.
They offer many great options for small businesses including guaranteed day ground delivery, overnight, two-day and three-day delivery as well as international delivery to over 220 countries and territories. They have over 63,000 locations to drop off your shipments. For an additional fee you can also arrange for UPS to come to your home or office to pick up your packages. They offer $100 in insurance as well as tracking via their Quantum View software so you and your customers can stay informed on your shipments location and arrival status. They also have a free service called UPS Marketplace Shipping that allows your online store to integrate with your UPS account so you can keep track of shipping expenses as well as print labels directly from their website.
If You Do In-house Fulfillment
If you have a low volume of orders or an extremely inconsistent volume, you’re probably still doing your own fulfillment, and that’s a good thing. Outsourcing can be costly if you have products sitting on the warehouse shelf for long periods of time.
USPS is the overall best option for any small order volume. UPS and FedEx can offer more options in terms of speed, and packaging, but that may not affect your fulfillment strategy.
Your best bet if you’re fulfilling in-house is to do a very thorough cost analysis of each type of package you ship—all the sizes and weights. Then create a spreadsheet of each major carrier and use their shipping calculators to estimate what your total costs will be for your projected volume. The carrier and service with the lowest option wins. Here are shipping calculators for each service: USPS, UPS, FedEx.
If You Want Fastest Delivery
While USPS might be the best low-cost option, if you want to ensure fast delivery for your customers, FedEx and UPS are carriers that have more reliably speedy service.
FedEx is usually going to be the best option if speed of delivery is the primary concern for your shipments. They offer cross-country same day shipping, overnight shipping, two- and three-day shipping, as well as ground delivery with a one to four business day window. And one of the great things about FedEx is that these are not just available for domestic deliveries, but also for international ones. FedEx has fewer locations than UPS, but it shouldn’t be too hard to find one to drop off your shipments. They also have drop boxes available as well. Like UPS, you can also arrange a pickup for a fee of $4 per package. All shipments are insured up to $100 and tracking is also available. They have several options available to integrate with your ecommerce store as well.
If You Offer a Flat Rate for Customers
You may want to keep your shipping rates really simple for your customers as an incentive. Often small businesses charge one single shipping rate for all products when they start out. For example, $5 for shipping any single product anywhere in the US.
Another option is to have a few flat rates for certain price breaks. For example, $10 shipping fees for anything $45 and under, and $12 shipping for anything over $45. It may work as an incentive for customers to add more items to their cart, but it may also deter customers from buying if they only want one small item.
You’ll have to work out your exact costs to ensure you’re not losing money. It may seem like a simple thing to decide in the beginning, but if you ship more than a few types of products, there’s likely going to be extra fees on some products and more margin for you to pocket on others. You want to ensure you’re breaking even.
It’s worth it to note that this is a shipping strategy, not a parcel service. If you’re looking to add a flat-rate service to your strategy, both USPS Flat Rate or UPS Simple Rate shipping use predetermined boxes (each service has a few sizes to choose from). This ship service is great if you have very heavy items that are small, or large items that are light. Or if you need to ship through many shipping zones (domestic only, not international).
If your items fit well in the flat rate boxes, you may want to consider either USPS Flat Rate or UPS Simple Rate so that you can easily forecast your shipping costs and aren’t surprised with extra fees you didn’t expect.
If You Have International Customers
For small businesses that ship their products internationally, DHL is likely to be the best choice for you. DHL is sometimes an afterthought when compared to the “big three” of shipping: USPS, FedEx and UPS, but they offer a lot of service and value when it comes to international shipping. They will ship your goods to over 220 countries and territories. They have a great online quote generator that can estimate shipping a package before you decide which service you are going to use to ensure that you are getting the best rate and delivery times. The cost of your shipments will depend on the dimensional weight of your packages, as well as the destination country.
DHL boasts of over 1400 brokerage offices that can help navigate customer clearance to make sure you have all of the proper paperwork for the destination country of your international shipments. They also offer both freight as well as cargo insurance which might be necessary, depending on the shipment. The average time in transit to their global network of destinations is three to eight business days.
If you are a small business but growing out of your current fulfillment and logistics strategy, outsourcing to a 3PL might be a great next step. At DCL Logistics our team can help you optimize your shipping to ensure low costs and the best delivery speeds for your particular products. Check out the clients we work with and reach out for a quote, we’d love to hear from you!