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.

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

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.

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 or overnight 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. 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. Eliminate excess air and padding. Use poly mailers for soft items when possible, and opt for corrugated boxes only when necessary. Also, opt for lighter protective materials like kraft paper, air pillows, or foam wrap–and use just enough to secure the product without going overboard.

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. 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. Round up to the nearest inch or pound to stay safe.

Why it works: One small mis-measurement can trigger costly correction fees—ranging from $1 audits to over $50 in handling surcharges. 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. 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.

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.

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.

Start saving on every shipment

Shipping is one of the most controllable costs in your ecommerce business. 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. 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.

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. This can inform decisions about 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).