8 ways to lower your shipping costs (without cutting corners)

Running a small business means keeping a sharp eye on your margins. And while you can’t control every cost, you can control how much you spend on shipping.

The good news? You don’t need to skimp on service or speed to save. Whether you’re shipping a handful of packages a week or hundreds each month, these strategies can help you lower costs, avoid surprise charges, and make smarter shipping decisions—all without cutting corners. Tracking your average shipping cost is essential for identifying savings opportunities and informing your pricing strategy.

Here are eight best practices to help you ship smarter and save more.

Introduction: Why shipping costs matter (and how to start saving)

Shipping costs can make or break your bottom line—especially for small businesses where every dollar counts. High shipping expenses don’t just eat into your profits; they can also impact your ability to offer competitive prices and keep customers happy. That’s why reducing shipping costs isn’t just a nice-to-have—it’s essential for long-term success.

The good news? There are plenty of ways to unlock significant savings without sacrificing service or delivery speed. Start by comparing carrier rates and services for every shipment. Major carriers like USPS, UPS, and FedEx all offer different shipping rates, and what’s cost effective for one order might not be for another. For example, USPS Priority Mail is often a great choice for fast, affordable delivery, but it pays to check your options.

Leveraging shipping software—such as Shopify Shipping—can also help you streamline your shipping operations and access discounted shipping rates, including USPS discounts and pre-negotiated discounts with major carriers. By making smarter shipping decisions, you’ll reduce shipping costs, improve customer satisfaction, and give your business a competitive edge.

1. Compare rates across carriers—every time

It sounds obvious, but too many businesses stick to a single carrier out of habit, even when more affordable options are available. Not all carriers charge the same for the same shipment. Comparing services side-by-side can reveal cheaper options for the same speed, or show you when slower shipping still meets your customer promise. The goal is to find cheaper shipping rates by leveraging available discounts and comparing all options to lower your overall shipping expenses.

With Shippo, you can save up to 90% off retail shipping rates by accessing pre-negotiated discounts. If you’re sending 100+ packages a month, those savings add up fast.

2. Choose slower delivery speeds (when you can)

We get it—fast shipping can be impressive. Delivering ahead of schedule is a great way to wow customers and build loyalty. But it can also come at a steep price.

That’s why it’s important to strike a balance. Unless your customer specifically paid for expedited shipping, you don’t need to foot the bill for 2-day, overnight, or express delivery every time.

Here’s the strategy: Match your shipping speed to what your customer actually selected at checkout. Services like USPS Ground Advantage or UPS® Ground can still deliver within 2–5 days in many regions—often fast enough to meet expectations without the cost of air services.

Why it works: You’ll avoid overspending on unnecessary speed, while still providing a reliable experience. Over time, those savings really add up—especially if you’re shipping hundreds of orders each month.

3. Choose the right packaging

Carriers use something called dimensional (DIM) weight pricing to calculate shipping costs—not just the actual weight of the package, but how much space it takes up in the truck or plane. To calculate dimensional weight, measure the package's length, width, and height, multiply them, then divide by the carrier’s DIM divisor, and compare the result to the actual weight to determine which is used for shipping charges. That means a lightweight item shipped in a big box can cost more than a heavier item in a compact one.

Try this: Choose packaging that fits your product snugly. Minimizing package size helps reduce shipping costs by lowering DIM weight and avoiding unnecessary fees. Eliminate excess air and padding. Use poly mailers for soft items when possible, and opt for corrugated boxes only when necessary. Select packaging materials that are both protective and cost-effective to balance safety and savings. At the same time, look for free packaging options from carriers to save even more on shipping supplies.

Why it works: Smaller packages mean lower DIM weight, fewer oversized fees, and reduced filler costs. If you can keep your package under 1 lb, you’ll unlock significant savings with services like USPS Ground Advantage. For heavier or bulkier items, consider using a flat rate box, which can be a cost-effective alternative depending on your shipment. You’ll also save on storage and create less waste—a win for your bottom line and the planet.

4. Double-check your delivery addresses

Incorrect or incomplete addresses are a common reason for costly adjustments—and frustrated customers. For instance, if you're shipping to a residential address but accidentally classify it as commercial (or vice versa), you may be charged extra.‍

Address validation tools—like the ones built into Shippo—help catch issues before you print a label. Accurate addresses help reduce delivery surcharges and failed delivery attempts. And, while you can't choose whether a destination is residential or commercial, you can compare rates across carriers—some charge less than others for residential deliveries. These little details make a difference.

5. Weigh and measure every package (accurately!)

Guessing dimensions or weight can lead to adjustment fees, a type of surcharge that’s charged after delivery if the carrier determines your package was heavier or larger than what you reported.

Try this: Use a digital scale and measuring tape to get exact specs every time. For the most accurate weight measurement, use a postage scale to ensure your shipping costs are precise.

Why it works: One small mis-measurement can trigger costly correction fees—ranging from $1 audits to over $50 in handling surcharges. Underestimating the weight of heavy packages can result in especially high adjustment fees, making accurate weighing essential. Accuracy ensures you’re not overpaying upfront—or getting hit with surprise fees on your invoice.

6. Use regional carriers when it makes sense

National carriers might be your go-to, but they’re not always the most affordable, especially for shorter distances. Shipping distance and shipping zones play a big role in determining shipping costs—regional carriers can be more cost-effective for certain shipping zones because they specialize in shorter shipping distances. That’s where regional carriers come in.

Regional carriers are often more affordable than national carriers for short-range deliveries. Plus, they can be faster and more reliable within their service areas—especially during peak season when national carriers are stretched thin.

Try this:

• Use regional carriers like OnTrac or Swyft for local orders
• Fulfill orders from the warehouse or location closest to your customer if possible

7. Use flat-rate options when they make sense

Flat-rate shipping can be a smart way to keep costs down—especially if you’re sending heavier packages or shipping across the country.

Why it works: With flat-rate options from carriers like USPS, the price stays the same regardless of weight (up to a limit) or distance. This is especially helpful when zoned pricing would normally drive up your costs. If you’re regularly sending heavier items or shipping far, flat-rate boxes might be your most economical option. Flat-rate options can offer a lower cost for certain shipments, but for lightweight parcels, class mail services like USPS First Class Mail® may provide an even more cost-effective solution.

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8. Track your shipping trends and costs

If you’re not actively reviewing your shipping activity, you’re probably overspending. Most small businesses only look at cost per label—but that’s just one piece of the puzzle.

Try this: Use Shippo’s analytics dashboard to explore:

• Label spend over time
• Average cost per label
• Label spend by carrier, destination, or service level

Why it works: Tracking these data points helps you see…

• If you’re spending too much on premium services (like expedited shipping when standard would do)
• Whether certain carriers are driving up your costs—if so, consider exploring other options to ensure you’re getting the most competitive rates.
• How your shipping volume is trending—which can help you spot gaps between what you’re shipping through Shippo versus your actual business volume. If there’s a mismatch, you might be missing out on savings by not consolidating shipments across platforms. Connect all your online stores to Shippo so you can view all orders—and get savings on all your labels—in one place.
• How monitoring your shipping process and related data can help you manage operational costs and identify ways to reduce shipping expenses, such as optimizing packaging, choosing cost-effective carriers, and streamlining fulfillment.

Streamline your shipping operations for extra savings

Efficient shipping operations are key to reducing shipping costs and boosting your bottom line. By streamlining your shipping processes, you can save time, cut down on errors, and keep your customers coming back for more.

One of the easiest ways to streamline is by using a shipping platform that connects with multiple carriers. Platforms like ShipStation or Shippo let you compare shipping rates, print shipping labels, and track packages—all from a single dashboard. This not only helps you find the cheapest shipping rates for every order, but also simplifies your workflow and reduces manual entry mistakes.

Consider building a shipping strategy that includes flat rate shipping for heavier or long-distance orders, regional carriers for local deliveries, and poly mailers for lightweight or soft goods. These choices can help you lower packaging costs and keep shipping expenses in check.

Don’t forget to regularly review your shipping data. Look for trends in shipping costs, identify which services are most cost effective, and spot opportunities for further savings. By continuously optimizing your shipping operations, you’ll unlock huge savings and deliver a better experience for your customers.

Don’t forget international shipping: tips for global cost control

Expanding your business beyond borders can open up new markets—but international shipping often comes with higher shipping costs and added complexity. The right approach can help you reduce international shipping costs and keep your global customers happy.

Start by choosing shipping services that offer competitive rates and reliable delivery, such as USPS Priority Mail Express or FedEx International Economy. These options can help you balance speed and cost, especially when you compare carrier rates for each destination.

Packaging matters, too. Use flat rate boxes or poly mailers whenever possible to keep packaging costs low and avoid extra shipping fees. Always calculate both the actual weight and dimensional weight of your packages—carriers use these numbers to determine your shipping rate, and getting them right can help you avoid costly surprises.

Stay up to date on international shipping regulations and requirements to prevent delays and unexpected charges. And, by using a shipping platform with real-time tracking and monitoring, you can keep tabs on your shipments, quickly address any issues, and ensure customer satisfaction.

With the right strategies, international shipping doesn’t have to be a headache—or a budget buster. Take control of your shipping expenses, reduce costs, and grow your business on a global scale.

Imagine the savings: a real-world example

Let’s say you ship 200 orders per month. You swap oversized boxes for right-sized ones. You validate addresses. You compare carrier rates on every order.

Result?Just $1 saved per shipment = $2,400 saved per year. $3 saved = $7,200. Multiply that by your growth, and you can see why smart shipping matters. These strategies help small businesses save money on shipping costs and improve their bottom line.

Start saving on every shipment

Shipping is one of the most controllable costs in your ecommerce business. To maintain profitability, it's important to factor shipping costs into your product prices, ensuring all expenses are covered and your pricing remains competitive. With the right tools, a few smart changes, and regular reviews, you can significantly improve your margins—without cutting quality or slowing down deliveries.

Start by implementing one or two of these tips this week. Then build on your savings from there.

Ready to ship smarter?Try Shippo free and instantly compare carrier rates, automate tracking, and streamline your shipping—all from one dashboard.

FAQ: Your shipping cost questions, answered

What is the cheapest way to ship?It depends on the weight, destination, and speed of the shipment. For many shipments, ground shipping is a cost-effective and reliable option, especially for small or lightweight items. The best way to find the most cost-effective option is to use our shipping calculator or compare real-time rates directly within Shippo.

How can I get discounted shipping rates?Use a shipping platform that offers pre-negotiated rates with major carriers. Shippo offers up to 90% off retail USPS, UPS, and DHL rates—no contracts or volume minimums required. You can also access shipping discounts by negotiating directly with shipping carriers or using third-party shipping platforms.

What should I track to lower my shipping costs?Monitor label spend by carrier, destination, and service level. Use these trends to help you avoid overspending on speed, identify where you’re shipping most, and find out which services are costing you more. Regularly reviewing your shipping data and optimizing your shipping strategy can help keep shipping costs low, such as switching service levels or using smaller, lighter packaging when possible.

How do I avoid surprise fees?Double-check your addresses, dimensions, and weight. Tools like Shippo’s address validation help catch errors early. Watch out for surcharges for invalid addresses, oversized packaging, or incorrect classification (e.g., residential vs. commercial).

What are fuel surcharges and how do they affect my shipping costs?Fuel surcharges are additional fees added by shipping carriers to cover fluctuating fuel prices. These surcharges can impact your total shipping expenses, so it's important to factor them in when calculating your overall shipping costs.

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