The Online Selling Handbook

Chapters

  1. The Definitive Guide to Starting an Online Business
  2. How to Find Online Business Ideas and Source Products to Sell
  3. The Paperwork: How to Make a Business Plan and Register as an E-commerce Company
  4. How to Set Up a Website for E-commerce 
  5. How to Set Up Online Payment Methods to Accept That First Purchase
  6. Pick Packaging That Saves You Money
  7. How to Ship Products for an Online Business
  8. Successful Marketing Strategies for Small Businesses
  9. Small Business Customer Service Strategies Explained

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About the Handbook

We’re diving deep into every facet of creating an online business to make it easy for you to get started and scale quickly. Hear from top e-commerce SaaS providers and online retailers for the best advice to achieving successfrom choosing a product and building a website to creating shipping labels and processing returns.

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Chapter 6: Pick Packaging That Saves You Money

Many beginner sellers fall victim to a critical mistake: They buy a standard box to ship orders without trying to optimize the package or the process and end up wasting precious cash. It’s understandable—trial by fire is often the best way to learn what will work best for business. 

Before you are up to your ears in boxes that are needlessly expensive to ship, read the following tips to better understand how the package you pick can impact your shipping rates and experience. 

Whether you’re a first timer or a savvy seller, we hope this helps you avoid costly mistakes, maximize your profits—all while providing a reliable experience for customers. 

Picking the Perfect Package Checklist 

Step 1: Pick What Inserts You Need

Before we can talk about the right vessel for your product, we have to make sure we account for everything that will be going inside. You don’t want to take the time to calculate the most cost-effective package only to find out your supplier ships your product in a half-inch thick foam casing that won’t fit within the dimensions you outlined. 

Consider these popular inserts: 

Packing slips

A packing slip lists all of the included items from the customer’s order. Usually this is on a standard piece of printer paper and doesn’t affect the package weight or size substantially. 

Return labels

Savvy sellers include a scan-based return label in the outbound box to customers. The benefit? Customers get a seamless, effortless experience, and the seller keeps cost in line, only paying for postage if and when the label is scanned into the mailstream. 

Bubble wrap, cushioning, etc. 

Different types of padding to help ensure the enclosed items reach their destination intact. This can be as generic as a strip of bubble wrap off a large roll of the material or as customized as a cardboard mold for a tight, secure fit. It all depends on the items you’re shipping. 

Dry ice or gel coolant 

You might need to include items that help to keep the content of the box cool to prevent perishables (think: pharmaceuticals, food, and flowers) from spoiling. 

The best way to determine if you need dry ice or a gel pack is the temperature that the package requires during transit. If you need your product to be cold but not frozen, gel packs are often a good option. Dry ice is best used for items that need to stay frozen, like ice cream.

Marketing postcards

Consider using the unboxing experience as an opportunity to deepen the relationship with customers. Throw in a discount code with the order to encourage returning customers. Your customers are highly engaged during this time, so it’s a good idea to take advantage of it. 

Test the Contents 

Before you pull the trigger on purchasing a bulk order of bubble wrap, ship a few test orders to make sure you’re setting your packages up for success. First, toss a few items in a box and give it a good shake. You may even want to see what happens when it slips out of your hands and onto the concrete floor—since accidents do happen. 

Step 2: Measure and Weigh Your Items

Once you’ve collected all of your contents, stack them in a way that they might fit into a box or envelope, so that you can measure the dimensions. Stack it like you would ship it—fold anything that needs folding, place items in their proper branded packaging, etc. This will be used to determine the right box or envelope size for the package. 

Measure Your Goods 

Get your measuring tape out and note the length, width and height of the stack. 

Measure Item Dimensions

For squishable merchandise (like apparel) that’s between 1-20 pounds, you’ll likely want to squeeze it into as small of a box as you can, since box size matters in this instance. Set a heavy book on top, wrap rubber bands around the contents, stick them in a Ziploc bag—whatever you need to do to condense the items and get a close estimate of the box you would actually need, given the contents. 

Squish Items to Pack Tightly

Now Weigh Them 

Next, weigh your stack of items to determine the proper weight. You might be able to use your bathroom scale when first starting out, but we recommend a postal scale for greater accuracy. 

Once you have your items’ weight, you’ll want to tack on a few extra ounces to account for the box or envelope. For now, we’ll use an estimate, but once you choose the box, you’ll want to weigh and measure it to get exact details. 

For big boxes, we estimate the box weight to be about one pound (maybe more). 

For small boxes, we estimate the box weight to be about 3-5 ounces. 

Standard envelopes are as light as one ounce, and get increasingly heavier as more padding, thickness, etc. get added. 

Here are examples: 

Sample Package Weight Equations

When you’re done with this step, you should have package weight and dimensions to use to determine the most cost-effective box option for your orders. 

Step 3: Choose a Package With the Best Shipping Rate

If you use a shipping software like Shippo, you enter your package dimensions and weight, plus your origin and destination address, and it will show you every shipping option available. 

As you start to build your shipping expertise, you’ll start to wonder: is the box I’m using the most cost-effective option? Would a smaller box save me money? How about a USPS Flat Rate box? 

Here are our tips for picking a package that will get you the best rate possible. 

How to Pick the Right Package

Picking a Package: Items Weighing Less Than One Pound 

If the entirety of your package (items + inserts + box/poly mailer) is less than one pound and headed to a U.S. address, you’re in for a treat. USPS First Class Package Service is an affordable option for these shipments, and the bonus is that it is super straightforward. 

USPS First Class Package Service (FCPS)

FCPS is the best option for packages weighing less than one pound. Note: if you buy FCPS at the Post Office, you can only ship packages up to 13 ounces. Don’t worry! Use a shipping software like Shippo, so you can get discounted rates and ship up to 15.99 ounces. 

  • Delivery in 1 – 3 business days
  • Tracking included
  • Purchase insurance for an extra cost with Shippo 

What Package Should I Use for Cheap Shipping with FCPS? 

Once you decide FCPS is right for you, the next question is: what box or poly mailer should you use to get the cheapest rate? 

Focus on Weight

For FCPS, weight has the biggest impact on cost. Consider using a poly mailer or envelope, since those are usually lighter than boxes. It might be worth comparing a few different types of poly mailers or boxes to figure out which is the lightest—especially since losing just one ounce could save you more than $1 per package. 

Important Notes 

  • DO NOT use a USPS Flat Rate Envelope or Box. FCPS prices are cheaper than USPS Flat Rate across the board. 
  • DO NOT worry about the box size. A smaller box will not make the price lower. However, the maximum dimensions for FCPS are 22” long, or 18” high, or 15” thick.  

Get Your FCPS Rate

First Class Package Service 2020 Pricing

Picking a Package: Items Weighing 1 – 20 Pounds 

If your packages (items + inserts + box or poly mailer) weigh 1 – 20 pounds, you have a unique opportunity. You are able to tinker with your package profile (especially package size) in order to adjust the shipping price. 

For perspective, the other weight groups rely mostly on weight (which is rarely adjustable) and distance traveled (also fixed) to determine shipping cost. 

If you’re not ready for a detailed packaging analysis, feel free to skip this section. Just pick a box that fits your items, and get shipping. 

As your business grows, you’re going to eventually want to analyze your boxes to make sure they’re optimized. 

The following is a deep dive into getting the best bang for your buck when it comes to packaging and box size. We’ll cover: 

  • USPS Flat Rate Boxes and Envelopes: Should I Use Them? 
  • I’m Using My Own Packaging. How Else Can I Save Money? 
    • USPS Cubic Pricing
    • Dimensional Weight Pricing 
  • My Package is Too Big for USPS Cubic Pricing and Too Small for Dimensional Weight Pricing. Now What? 

Drop That Weight

In case it’s not obvious already, weight plays a huge part in the package cost. If there’s anything you can do to lower the package weight, do it first. 

USPS Flat Rate Boxes and Envelopes: Should I Use Them? 

USPS Priority Mail Flat Rate Boxes and Envelopes are a go-to option for many sellers because they’re simple. 

Take heed: USPS Flat Rate is not always the most cost-effective choice for savvy shippers. We compared the shipping price for a USPS Flat Rate box versus non-branded packaging of the exact same size. 

Key Takeaways for USPS Flat Rate Envelopes:

  • USPS Flat Rate Envelopes are almost ALWAYS the cheapest option.
  • However, use your own envelope for packages weighing exactly 1 lb. and traveling locally.

Use your own envelope for the following scenarios:

USPS Flat Rate Envelope vs. Own Packaging

Key Takeaways for USPS Flat Rate Boxes: 

  • For 1 – 20 lb. packages, choose Flat Rate for long distances and your own box for short distances.

Use your own box for the following scenarios:

USPS Flat Rate Boxes vs. Own Packaging

Alright, I’m Using a USPS Flat Rate Box or Envelope. What Do I Need to Know? 

Keep in mind that the maximum weight is 70 pounds. And, when sealing a Flat Rate envelope or box, the container flaps must be able to close within the normal folds.

USPS Priority Mail Flat Rate 2020 Pricing

I’m Using My Own Packaging. How Can I Save Money? 

If your package weighs between 1 – 20 pounds and you want to use your own packaging, you have a delightful puzzle in front of you: what size box should you use to get the cheapest rate? 

Let’s check out your options.

USPS Cubic Pricing 

Ding, ding, ding! You just arrived at our favorite topic. We have a feeling it will be yours, too. 

USPS Priority Mail Cubic Pricing is affordable, because the USPS bases the shipping price on the size of the package and distance traveled, instead of the package’s weight. Rates are up to 90 percent less than what you’d pay at the Post Office. 

Here are a few examples: 

USPS Cubic Pricing Examples

USPS Priority Mail Cubic pricing is for boxes:

  • Weighing less than 20 pounds
  • With a Cubic feet value up to 0.5
  • With each side measuring 18 inches or less. Note: if more than one side is close to 18 inches, the package will likely still be too large to qualify.

USPS Soft Pack

USPS Soft Pack is a subset of Cubic Pricing specifically for bags, envelopes, and sacks. Even if boxes are inside the bags, you can still use this option as long as the bag isn’t stretched to the dimensions of the box like wrapping paper. 

What’s so great about USPS Soft Pack? You get to measure the dimensions of the envelope before you put anything in it. All sides need to measure 18” or less. 

Find Your Rate

Step 1: Find your box or envelope in our Cubic Pricing Tier charts. For example, a 15” x 9 “ x 2” box falls within the 0.2 Cubic Tier. 

USPS Cubic Pricing Tier Charts

Step 2: See if you have any wiggle room to drop to a lower Cubic Pricing Tier. Take a look at the neighboring squares to see if there’s any way you can adjust your contents to fit in a package that qualifies for a lower Cubic Pricing Tier. 

Step 3: Find one of the largest boxes in your Cubic Pricing Tier. Once you’ve settled on a Cubic Tier, consider the biggest-sized packages in your Tier. Every package in a given Tier gets the same rate, so you might as well give yourself some extra space if you think you might use it. 

Step 4: Use your Cubic Pricing Tier to find your rate. In our example of the package with a 0.2 Cubic Tier, the rates would vary by Zone between $7.46 – $13.15. 

USPS Priority Mail Cubic Pricing 2020 Rates

For more details on calculating your Cubic rate, visit our USPS Cubic Pricing page

Simplify Your Shipping with USPS Cubic Pricing 

The great thing about USPS Cubic Pricing is you can purchase a stack of boxes or poly mailers that you know fit a certain Cubic Tier. Then, you can stuff it full of items—up to 20 pounds—and it will ship for the exact same rate every time, depending on the Zone. 

To borrow from an old USPS saying, “If it fits [and is 20 pounds or less], it ships.” 

This makes planning and forecasting super easy for you. You can consider having a box and poly mailer in stock for every Cubic Tier. 

Don’t Sleep on Free USPS Boxes

I’ll let you in on an industry secret: the USPS offers free boxes beyond just their Flat Rate offerings. You can use these boxes to ship and access Cubic Pricing. There are a few different options that fit within the Cubic Pricing Tier dimensions, and they’re all completely free. 

For example, USPS Priority Mail Box – 4 is a great option at the maximum edge of Cubic Tier 0.2. The outside dimensions are 7 ¼” x 7 ¼” x 6 ½”.

Just make sure you’re picking a box that is Priority Mail—not Priority Mail Express, Regional Rate, or Flat Rate. And, when you purchase the label, you’re buying the service level that matches what’s written on the box (i.e. Priority Mail is on both). 

Dimensional Weight (DIM) Pricing 

On the other end of the spectrum, if your package is larger than 1 cubic foot in volume, then you’ll be subject to its Dimensional Weight (DIM) price. 

For these large packages, the carrier will determine the package’s dimensional weight (based on the size of the package) and compare that to the physical weight. The weight that is higher will be used to determine the shipping rate.

Ultimately, this affects e-commerce businesses owners that ship large, lightweight packages (think: lightweight poster frames). Because the package’s dimensional weight will likely be high and its physical weight will be low.

Let’s take a look at how to calculate Dimensional (DIM) weight, using the USPS DIM weight factor and the following calculation:

USPS Dimensional Weight Pricing Formula

DIM Weight Example: A Poster Frame

Poster Frames Illustration

  • Package dimensions: 24 inches x 36 inches x 3 inches
  • Package weight: 3 pounds
  • Package Volume: 24 x 36 x 3 = 2,592 cubic inches
  • Does this qualify for DIM weight? Yes, because the volume is greater than 1,728 cubic inches.
  • Dimensional weight: 2,592 / 166 = 15.61 (rounds up to 16 pounds)
  • 3 pounds < 16 pounds

In this case, you pay for a 16-pound package, instead of the physical weight of 3 pounds. 

If your package qualifies for DIM pricing, you’ll want to brainstorm ways to shrink its size. Smaller boxes will help to save you some money. 

My Package is Too Big for USPS Cubic Pricing and Too Small for Dimensional Weight Pricing. Now What? 

Let’s say your package doesn’t meet the qualifications for any of the above options. As long as your box is 1 cubic foot in volume or less, pretty much any ‘ol box will do since the box size will not impact the price. 

Since box size does not really matter, you may want to consider using a free USPS box to ship your package, because they are completely free, there’s not even a charge for shipping them to your address.

Most of the free USPS boxes are small enough to qualify for Cubic Pricing. However, there is one large box that is too big for Cubic and may be useful to you: Priority Mail Box – 7. The inside box dimensions are 12” x 12” x 8”. It comes in packs of 10 or 25.

Picking a Package: Items Weighing 20+ Pounds

If your package weighs more than 20 pounds, the size of the box has little impact on the shipping price. Just keep in mind the following: 

  • Use USPS Flat Rate boxes if your items fit and weigh between 20 – 70 pounds. 
  • Keep in mind Dimensional (DIM) Weight Pricing still applies (see above). 
  • Given the weight of the package, it’s even more important to have a sturdy box. Poly mailers become less reliable for heavy items. Make sure the bottom won’t fall out of the box, either. 

Step 4: Order Your Packaging Supplies 

Success! You’ve slayed the metaphorical money dragon and saved the packaging princess. Now, you can progress to the next level: buying your supplies. 

Here’s a checklist of the supplies you might need: 

  • Boxes and/or poly mailers 
  • Label printer 
  • Blank labels 
  • Any inserts (mentioned above) 

Buying Boxes or Poly Mailers

There are a few options when it comes to buying the packaging you need. As a business grows, its needs and volume change, so we made this handy chart to help you every step of the way. 

Packaging Items by Cost

For more details on branded packaging, visit the Arka and/or Lumi website.

Exploring Your Printer Options

Printers for e-commerce shipping tend to fall into three main categories. Depending upon your shipping volume, you’ll want to take cost and maintenance into account. 

Printer categories include:

  • Inkjet printers offer inexpensive printing onto paper and label sheets. 
  • Laser printers offer the same printing options as inkjet printers, but with significant quality upgrades. The print quality is noticeably better, but you’ll pay a lot of more for the printer, plus toner/ink refills
  • Thermal printers print directly onto shipping labels that come on rolls. If you ship in higher volumes, thermal printers would be your best choice as they print fast, can print high quantities for labels at a time, do not need toner refills, and take up very little space. 

Once you’ve chosen your packaging, you’re almost ready to start accepting orders and shipping them to your customers. In the next chapter, we’ll cover how to charge customers for shipping and print those shipping labels. We know the excitement that comes from seeing a box waiting for you in your mailbox. It’s pretty incredible that you’re able to kindle that type of feeling for your customers, and we’re thankful to be a part of the journey. 

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