Shipping can quickly become one of the largest expenses for a small business—especially e-commerce stores. Yet, finding the cheapest shipping solution is crucial to maintaining healthy margins and keeping customers happy. In this guide, we’ll explore how small businesses can lock in the best shipping rates, why the United States Postal Service (USPS) is often the most budget-friendly choice, and how platforms like Shippo help you save up to 90% on retail postage.

Why USPS Is Often the Cheapest Option

When it comes to finding cost-effective shipping options, USPS frequently comes out on top, especially for packages under 20 pounds. Here’s why:

• Competitive Base Rates: USPS typically offers lower rates than other carriers for lightweight parcels (under 1–2 lbs). This is particularly advantageous for small e-commerce businesses shipping items like clothing, accessories, or smaller electronics.
• Flat Rate & Priority Mail Cubic Pricing: USPS Priority Mail Flat Rate boxes are an easy, predictable option. Meanwhile, Priority Mail Cubic pricing bases your cost on a package’s dimensions rather than its weight—perfect for shipping smaller, heavier items.
• Nationwide Reach: USPS services every residential address in the U.S. with no surcharges for rural delivery or fuel.
• Commercial Discounts: By using an online shipping platform (like Shippo), you can tap into Commercial Pricing and even Cubic Pricing, which significantly reduces the cost compared to Retail (Post Office) rates.

Key Takeaway: For the majority of small businesses with lighter parcels, USPS often delivers the lowest total shipping cost—especially once you factor in commercial discounts.

Comparing USPS, UPS, and FedEx for Small Businesses

Of course, USPS isn’t the only game in town. UPS and FedEx also offer competitive rates, particularly for heavier packages or when you need guaranteed delivery times. Here’s a quick overview of each carrier’s strengths:

• If you regularly ship small, lightweight parcels, USPS often wins on price.
• For heavier boxes (20+ lbs) or large B2B shipments, UPS can be cost-effective with negotiated rates.
• For express or global shipping with time-definite guarantees, FedEx is a strong contender.

Use a multi-carrier approach to always choose the best option for each order. Shippo automatically compare rates across 40+ carriers (see the full list here) and help you pick the lowest price or fastest delivery method. Get started with Shippo - it's free!

USPS Discounts and Rates Explained

Retail Rates:

• The standard prices you pay when you buy postage directly at the Post Office. While convenient for occasional shippers, these can be significantly higher for daily shipments.

Commercial Pricing:

• Heavily discounted postage (up to 90% off Retail) that small businesses can access by using a shipping software like Shippo
• Lower costs on First Class Package, Priority Mail, and more.

Priority Mail Cubic Pricing:

• Special USPS pricing based on package dimensions rather than weight.
• Ideal if you’re shipping dense, heavier products in small boxes (under 1 cubic foot).
• Even cheaper than standard Commercial Pricing for the same size/weight package.

By using a shipping software platform, you can unlock these discounted, cheaper labels immediately at signup. There’s no need to negotiate directly with USPS or meet annual shipping volume quotas.

How Shippo Helps Small Businesses Save More

Shippo consolidates the shipping volume of thousands of  businesses, securing discounted rates from USPS that might otherwise require high shipping volumes. Here’s how it works:

1. Aggregated Discounts
   • Access Commercial Pricing and Priority Mail Cubic rates on day one, no matter how many packages you ship.
2. Multi-Carrier Rate Comparison
   • Compare USPS, UPS, FedEx, DHL, and more in real-time. Always choose the cheapest or fastest option for each package.
3. Easy Label Printing & Automations
   • Print shipping labels in one click, schedule pickups, and track packages—all from a single dashboard.
4. Transparent, Pay-As-You-Go Pricing
   • Create a free Shippo account here. You only pay for the postage you buy—no hidden fees or monthly minimums.
5. Instant Scalability
   • Whether you’re shipping 10 packages a month or 10,000, you maintain your discounted rates without re-negotiating.

By consolidating shipping volumes, Shippo helps you secure the cheapest shipping for small businesses—often saving you 20% to 90% off standard retail prices. Creating labels was never easier.

Tips to Lower Shipping Costs for Your Small Business

Aside from carrier selection, there are many ways to shave dollars off your shipping budget:

1. Optimize Packaging
   • Use smaller, right-sized boxes to reduce dimensional (DIM) weight charges.
   • Get free Priority Mail boxes from USPS to save on packaging materials.
   • Ship in poly mailers or padded envelopes when possible to reduce weight.
2. Batch Shipments
   • If your items can be combined or bundled, consider shipping them together. This approach may lower per-item shipping costs and packaging needs.
3. Leverage Negotiated & Cubic Rates
   • Prioritize rates that reward you for smaller package dimensions (like Priority Mail Cubic). Even heavier items might be cheaper if they fit into a smaller box.
4. Consider Delivery Speed vs. Cost
   • If your customers don’t require 2-day or overnight shipping, offer a slower, more cost-effective method. Clear shipping options can reduce cart abandonment, too.
5. Invest in a Shipping Platform
   • A tool like Shippo helps you instantly compare carriers and apply the best rate for each order. You’ll also get built-in tracking, insurance options, and discounted labels - all in one place.

Frequently Asked Questions

Q: What is the cheapest shipping carrier for small businesses?
A: USPS is usually the cheapest option for small and lightweight packages, thanks to its Commercial Pricing, Cubic rates, and nationwide residential delivery coverage. For heavier parcels, UPS or FedEx might become competitive—especially if you negotiate a business contract.

Q: How do I qualify for USPS Commercial Pricing?
A: You don’t need a high shipping volume or a special contract. By purchasing your postage online through Shippo, you automatically are able to access discounted rates from USPS and 40+ carriers.

Q: How can I reduce dimensional weight fees?
A: Dimensional weight calculations factor in a package’s length, width, and height. Minimize extra space in your box, or switch to a smaller package type. Platforms like Shippo also show you how shipping costs change if you adjust dimensions.

Q: Do I need to sign a long-term contract to get discounted rates?
A: Not with Shippo. You can create a free account, compare rates, and immediately purchase discounted postage. You pay as you go—no subscription fees (with our free plan), minimums, or long-term contracts. You can find our straightforward pricing here.

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Get Started with Cheaper Shipping

Ready to Start Saving on Shipping?
Sign up for free with Shippo and instantly access USPS Commercial and Priority Mail Cubic pricing for your small business. Compare live rates across multiple carriers, print labels in just a few clicks, and save up to 90% off retail shipping costs—all without monthly fees or hidden charges.

Create Your Free Account

Shipping is too important (and too expensive) to leave to guesswork. By combining the right carrier with a robust shipping platform, you’ll keep your costs low, delight your customers with prompt deliveries, and set your business on the path to sustainable growth.

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