Shipping is one of the most overlooked yet critical components of an ecommerce business. It directly affects customer satisfaction, operating costs, and ultimately, your bottom line. However, the right shipping strategy varies based on your business’s stage of growth. This article outlines key shipping strategies for businesses at different scales—from startups to high-volume enterprises, providing actionable insights to optimize logistics and maximize profitability.
While operational costs determine your initial P&L, at the early stage, brands are made based on their ability to get orders to customers, get feedback, and reach even more customers. At the small scale, a $1 per package difference in shipping costs may seem significant, but on 500 orders a month, that’s only $500. Whereas CAC can often be $30-40 per order, any optimization you can make there will far outweigh any operational savings at this stage.
Work with good partners, enlist experts to help so that you can focus your efforts on finding product-market fit and building a sustainable business.
Early-Stage Ecommerce (<500 orders/mth): Affordable & Simple Shipping Solutions
Without higher order volumes (~4,000 shipments per month), negotiating carrier discounts is challenging, so leveraging existing shipping platforms is often the best approach. At this stage, ecommerce businesses need to focus on cost efficiency, ease of setup, and flexibility.
Key Strategies:
- Use shipping software platforms like ShipStation, Pirate Ship, Shippo, or EasyPost to access discounted rates that are far better than what you can get from retail.
- Leverage postal services like USPS Ground Advantage or DHL eCommerce for cost-effective domestic shipping, especially for lightweight items (under 4lbs). FedEx and UPS are usually better for anything above that weight class.
- Offer free or flat-rate shipping based on an analysis of competitor pricing and customer expectations to simplify the checkout process and increase conversions.
- Optimize packaging by using lightweight materials and standard-sized boxes to avoid dimensional weight pricing, reducing unnecessary carrier fees.
At this stage, brands should focus on balancing cost and reliability while maintaining flexibility to adjust as order volumes grow.
Scaling Up (500+ Orders per Month): Managing Costs & Efficiency
As order volume increases, so does the total spend on shipping and operational complexity. At this stage, businesses often find themselves in a tricky position—not large enough to secure direct carrier discounts but not seeing enough savings from basic shipping solutions. Managing this transition effectively requires strategic planning and leveraging new fulfillment solutions.
There are two main paths here, self-fulfillment and working with a 3PL. Personally, I haven’t found too many compelling reasons for a brand to run their own fulfillment beyond 500 orders per month, but there are some – say if you do your own production and have an attached fulfillment facility, if your products require a very high degree of customization before shipping, or if brands have unique refurbishment needs for returns.
Key strategies when you need to do your own fulfillment:
- Implement hybrid shipping solutions, mixing multiple carriers such as USPS and DHL for lightweight items and FedEx/UPS for heavier shipments to optimize delivery speed and cost.
- Automate shipping operations with tools like ShipStation or EasyShip, which allow for bulk label printing, real-time tracking, and order integration with ecommerce platforms.
- Explore platforms that offer aggregated shipping rates that can help your brand access better rates than they get directly from the carriers. Typically brands get direct rates better than shipping platforms beyond 2,000 orders/month, but aggregated rates with Operating Crew are typically still more competitive up to 50,000 orders/month due to the sheer volume they bring together.
- Leverage your shipping volume with one carrier if going direct, rather than take a multi-carrier strategy unless you’re using aggregated rates or continue to use rates from a shipping platform. While there are many benefits to having multiple carriers, such as redundancy and cost-savings from regional carriers, brands may be better off combining their volume to attain greater volume discounts than barely hitting the minimum for each carrier and receiving no discounts. More carriers means greater management complexity.
Key strategies for when you don’t need to run your own fulfillment:
- Partner with a third-party logistics provider (3PL) that matches the needs of your brand and benefit from their enterprise shipping rates and warehouse distribution expertise.
- Real-time shipping time estimation: Experienced 3PLs utilize technology that gives them access to a live-database of actual shipping transit times over the course of the year (e.g. there are more delays during Q4 as carrier networks get inundated), and can help you pick the right services based on customer expectations. These platforms also allow 3PLs and brands to continuously monitor delivery SLAs and utilize only the ones that are best-in-class based on your needs.
- Breadth of carriers: Given their massive daily shipping volumes across their brand portfolio, 3PLs are able to split that volume across many carriers, and brands stand to benefit from lower rates and higher reliability. Leveraging many carriers only makes sense at a large scale and having a 3PL allows much smaller brands to take advantage of it. In some instances, 3PLs may utilize zone-skipping solutions to get packages closer to the final destination before they are dropped off, saving even more.
- Cost-savings for expedited shipments: With actual shipping transit time projections going down to the customer zipcode level, a 3PL with an advanced transportation management system (TMS) will be able to pick the right carrier and service level based on customer expectations, not what they selected at check-out. A customer does not know where a brand ships out from, only when they expect their package to arrive.
For example: A customer in San Francisco needs a replacement hearing-aid delivered within a day for an upcoming business trip. At checkout, they select and pay $18 for Next Day shipping. But if the product already ships from a nearby facility in the Bay Area via Ground service, the customer will already receive their parcel within one day, 98% of the time. Instead of using an expensive air option, you can ship it via Ground for $8. The customer gets their order on time, and the brand earns an extra $10 in margin. This level of smart routing is only possible when a 3PL invests in the right technology and data infrastructure.
Strategies that apply to either approach:
- Offer paid shipping options at checkout—some customers require expedited shipping and are willing to pay for it. Combined with getting great rates for expedited shipping, reasonably pricing these options out often lead to some incremental margin from shipping.
- Monitor and optimize delivery performance by tracking key metrics like carrier transit times, undelivered orders, and customer feedback to adjust strategies accordingly. Wonderment (owned by Loop) is a good option for this!
By leveraging 3PLs and automation, businesses can reduce fulfillment burdens while ensuring customers receive their orders efficiently. This phase is about streamlining logistics to prevent inefficiencies from eating into profits.
Enterprise-Level Ecommerce: Carrier Diversification & Optimization
At high order volumes, businesses can negotiate directly with carriers and implement more sophisticated shipping strategies to increase profitability. A well-optimized logistics network at this stage not only reduces costs but also enhances delivery performance and customer satisfaction.
Typically speaking, all the benefits of a great 3PL apply to this stage as well, so we’ll focus on strategies for brands that do their own fulfillment.
Key strategies when doing your own fulfillment:
- Negotiate carrier rates with major carriers like FedEx, UPS, and USPS, leveraging high shipment volumes to secure lower per-unit shipping costs. FedEx and UPS have both been pushing towards higher margins as a company, so the deepest discounts may be harder to come by unless brands have a lot of volume ($10M+ spend a year), though there will still be strong discounts at the $5M+ annual spend tier.
- Diversify carrier relationships by integrating regional carriers such as OnTrac, Veho, AxleHire, and Better Trucks to optimize last-mile delivery and avoid reliance on a single provider.
- Implement multi-warehouse fulfillment to distribute inventory closer to key customer regions, reducing shipping times and costs. Weigh the increased costs due to additional ocean freight, inventory holding, coordination. We highly recommend using the same 3PL group rather than different ones across regions for more streamlined management.
- Utilize AI-driven logistics and predictive analytics to optimize carrier selection, reduce transit delays, and improve supply chain efficiency. At this scale, brands can start to do what 3PLs achieve by integrating software such as Shipium into their operations stack.
- Offer sustainable shipping solutions, such as carbon-neutral shipping, recyclable packaging, and eco-friendly delivery options to align with growing consumer demand for sustainability.
- Enable real-time tracking and transparency by integrating advanced tracking solutions into your ecommerce platform, providing customers with detailed shipping updates and improving post-purchase engagement.
- Build relationships with your carrier dispatch center to get preferential access to pick up and drop off times, or to larger vehicles (e.g. trailers that take palletized loads). Ask your carrier rep or your drivers for the phone number of your local dispatch supervisor who plans all pick ups, and get to know them. Nobody ever made enemies dropping off coffee and donuts.
Established brands use a multi-carrier approach to balance costs, efficiency, and risk management. By diversifying shipping strategies, businesses at this scale can protect themselves from rate hikes and service disruptions while ensuring consistent delivery performance.
Final Thoughts: Adapting Your Shipping Strategy Over Time
A well-planned shipping strategy is crucial to ecommerce success at any stage. Startups should focus on affordability and flexibility, while scaling businesses need to optimize costs and efficiency. At the enterprise level, businesses should maximize carrier negotiations and logistics intelligence to drive long-term success.
As ecommerce evolves, so should your shipping strategy. By continuously reassessing shipping needs, integrating the latest technology, and leveraging the right partners, businesses can stay ahead of competition, enhance customer experience, and maintain profitability as they grow.
This post was written by Yan Sim, Founder & CEO at Operating Crew. Yan brings over a decade of experience leading supply chain and operations at industry leaders such as Warby Parker and Weee! ($800M online grocer), and has also launched DTC brands at the venture studio Atomic. Operating Crew delivers instant, plug-and-play cost savings for DTC brands in parcel shipping, packaging and 3PL fulfillment.
Tags: Expert Advice & Tips, Omnichannel Fulfillment
