With the price tags of, well, just about everything on the rise, crafting an effective shipping strategy is pivotal for maximizing profits. Today’s consumers expect shipping options to be quick, accurate, and cost-effective . . . in other words, free or as close to free as possible! So for businesses, that means identifying shipping methods and small parcel rates that are budget-friendly and efficient—an endeavor that can prove to be time-consuming.
With so many services and carriers on the market, it can be tricky to determine how to shop for the best small parcel rate for your business. In this post, we’ll dive into the factors influencing the cost of small parcel shipping and how to find the best small parcel rates to ensure a successful shipping strategy.
Factors that Affect Small Parcel Rates
1. Packaging Type
From envelopes and boxes to tubes and padded mailers, the type of packaging you utilize for your products can directly impact your small parcel rate. For instance, let’s say your business sells cosmetics. If you’re fulfilling an order for a tube of lipstick, shipping it in a bubble mailer versus a small box will yield a lower small parcel rate.
2. Package Size
As a general rule of thumb, the larger the package, the higher the small parcel rate. There are a myriad of different avenues to explore to optimize your small parcel strategy. For instance, USPS offers Flat Rate Packages. While it might not always be the cheapest small parcel rate, it ensures your shipping costs remain steady and predictable. USPS also offers a service that delivers lower small parcel rates for small, heavy items under 20 lbs via cubic pricing. These are just two of many examples of different strategies you can employ to optimize your logistics strategy.
3. Package Contents
Picture this: two boxes, equally heavy, one holding a pair of sneakers and the other housing frozen steaks. These two shipments won’t be tagged with the same price, even though the scales say otherwise. Why? Because special packages, such as cold chain products, hazardous materials, or fragile items often require shippers to adhere to certain regulations or exercise extra care, causing a higher small parcel rate.
4. Destination
Typically, the further the package has to travel, the higher the shipping cost. In addition to standard small parcel shipping rates, you can incur added fees, such as a fuel surcharge, to cover long distances. Sending several small items to the same destination? Consider this pro tip: packing them together in a larger box may prove to be cheaper than shipping each one solo in its own small package.
5. Shipping Carrier
Each shipping carrier has the freedom to designate its own rates, leading to variations in small parcel rates for packages of identical weight heading to the same destination. Additional fees can also be tacked on for insurance, special handling, or customs clearance. To snag the best small parcel rates for your business, consider leveraging a 3PL partner. 3PL providers have their own established carrier network they’ve negotiated special rates with due to their high shipping volume. And as their customer, you can tap into these discounted rates.
6. Delivery Time
Since the rise of Amazon, consumer expectations for fast, 2-day delivery have become the norm. Maintaining a competitive presence in the market and driving customer loyalty calls for a shipping strategy that can meet these growing expectations. The faster you need your package delivered, the higher the small parcel rate it’ll hold. However, there are strategic ways to mitigate costs—especially with last-mile delivery. By working with a 3PL with warehouses located in key markets across the country, you can put your products closer to the end customer, lowering your overall shipping costs.
7. Customer Experience
Are you looking to scale? Increase revenue? Expand into new markets? Creating a positive customer experience via custom packaging and branded materials will come with an added expense; however, it’s one that can greatly bolster repeat business, your brand’s reputation, and, ultimately, your ROI.
Similarly, utilizing tracking not only enhances your customers' shipping experience, but it fosters trust by offering visibility when their package is on the move. The more budget-friendly small parcel rates may come with zero or limited tracking capabilities, so it’s essential to weigh your options, ship smarter, and ensure customer satisfaction plays a role in your decision-making.
Ship With Ease: A 3PL Can Elevate Your Business
Tapping into discounted small parcel rates can be a game-changer for your business. Your 3PL partner sends a high volume of packages with their carrier network and therefore receives major shipping discounts. They pass those small parcel rates down to their customers to ensure it’s a win for all parties involved. And the benefits stem beyond just shipping discounts.
From order fulfillment to inventory management to transportation, Smart Warehousing can help improve efficiency, the customer experience, and your bottom line via comprehensive logistics solutions. As your one-stop-shop provider, Smart Warehousing has the expertise, technology, resources, and nationwide footprint needed to create a customized strategy to fit your unique goals and needs. Discover the Smart Warehousing difference by contacting our team today.