The Shipping Bill That Keeps Growing
I talk to e-commerce sellers every week, and the conversation almost always turns to shipping costs. "My margins are getting crushed" is basically a universal greeting at this point. Between the 2024 and 2025 carrier rate increases — UPS and FedEx both raised general rates by 5.9% each year — the average cost to ship a package has climbed about 12% in two years.
But here's what I've seen: most sellers are overpaying by 15-40% because they haven't optimized. They're using the wrong box size, sticking with one carrier, or just printing labels through the carrier website at retail rates. Every one of those mistakes is money you're handing away.
These 12 strategies aren't theoretical. They're what I've watched real stores implement to take their per-package cost from $9-12 down to $6-8. Let's get into it.
1. Use Shipping Software for Rate Comparison
This is the single biggest win for most sellers, and it takes about 30 minutes to set up. Platforms like Pirate Ship, ShipStation, and Shippo have pre-negotiated commercial rates with USPS, UPS, and FedEx. You're typically looking at 30-60% off retail rates just by printing through their platform instead of going to USPS.com or UPS.com directly.
A quick example: a 2 lb package going from New York to Chicago via USPS Priority Mail costs $11.45 at retail. Through Pirate Ship, it's $8.20. That's $3.25 saved on a single package. Ship 500 packages a month, and that's $1,625 back in your pocket.
Estimated savings: 20-40% on postage
2. Right-Size Your Packaging
Carriers don't just charge by weight anymore. Dimensional weight (DIM weight) pricing means they calculate the price based on whichever is greater: actual weight or the box dimensions. The formula for UPS and FedEx is length x width x height / 139.
If you're shipping a 1 lb item in a 16x12x8 box, the DIM weight is 11 lbs. You're paying to ship 11 lbs of mostly air. I've seen stores cut 25% off their shipping costs just by switching to smaller boxes and adding one or two box sizes to their inventory.
Audit your top 20 products. Measure each one and figure out the smallest box it can safely ship in. Most sellers need 3-5 box sizes to cover their catalog efficiently.
Estimated savings: 10-25% on oversized shipments
3. Negotiate Carrier Rates at Volume
Once you're shipping 200+ packages per month, you have negotiating power. Call your UPS or FedEx rep and ask for a volume discount. They won't advertise this, but both carriers will offer reduced rates to keep your business.
The typical threshold for a meaningful discount is 50-100 packages per week. Come to the conversation with data: your monthly volume, average package size, and the competitive rates you're getting elsewhere. I've seen sellers get 15-30% off published rates just by asking.
For USPS, you don't negotiate directly — you get commercial rates through shipping software. But UPS and FedEx absolutely negotiate, especially if you can show them you're considering switching carriers.
Estimated savings: 10-30% off carrier list rates
4. Use Regional Carriers
UPS and FedEx aren't your only options. Regional carriers like OnTrac (West Coast), LSO (Southwest), Spee-Dee (Upper Midwest), and GLS (nationwide for lightweight packages) often undercut the big carriers by 20-40% for shipments within their service area.
ShipStation and some other platforms integrate with regional carriers, so you can compare rates side by side. The catch: regional carriers cover specific areas, so they work best as a supplement to your national carrier, not a replacement.
A seller I know in Portland switched their West Coast shipments to OnTrac and cut those per-package costs from $8.50 to $5.80 — a 32% reduction on about 40% of their total volume.
Estimated savings: 15-40% on regional shipments
5. Prepay for USPS Commercial Postage
If you're using USPS heavily, Commercial Plus Pricing (CPP) kicks in at higher volumes and shaves another 2-5% off Commercial Base rates. The exact threshold varies, but platforms like Stamps.com and Pitney Bowes offer CPP rates to their subscribers.
Even on the standard Commercial Base tier (which you get through any shipping software), you're saving significantly. The key is to never, ever print USPS labels at retail rates. There's zero reason to do it when platforms like Pirate Ship offer commercial rates for free.
Estimated savings: 5-15% beyond retail USPS rates
6. Use Poly Mailers Instead of Boxes
If your product isn't fragile and doesn't need a rigid container, switch to poly mailers. A poly mailer weighs about 0.5 oz versus 6-12 oz for a corrugated box. That weight difference alone can drop you into a cheaper weight bracket.
Poly mailers also pack flat for storage, cost $0.10-0.30 each (versus $0.50-1.50 for boxes), and qualify for USPS flat rate or cubic pricing in many cases. For clothing, accessories, soft goods, books, and non-fragile items, poly mailers are almost always the right call.
A clothing brand I worked with cut their packaging cost from $1.20/order (box + tissue + filler) to $0.25/order (poly mailer) and dropped their average shipping cost by $2.10 per package from the weight reduction.
Estimated savings: $1-3 per package
7. Consider Hybrid Shipping Services
UPS SurePost and FedEx Ground Economy (formerly SmartPost) are hybrid services where UPS or FedEx handles the long-haul portion and USPS delivers the last mile. They're typically 20-40% cheaper than standard ground shipping for residential deliveries.
The trade-off is speed — add 1-2 days to the transit time compared to regular Ground. For non-urgent shipments, though, the savings are real. A 3 lb package from New York to Miami might cost $12.50 via UPS Ground but only $8.75 via SurePost.
These services work best for packages under 10 lbs going to residential addresses. Most shipping software platforms let you compare hybrid rates automatically.
Estimated savings: 15-30% on residential ground shipments
8. Set Up Shipping Rules and Automation
If you're manually selecting the carrier and service for every order, you're wasting time and likely not choosing the cheapest option consistently. Shipping software like ShipStation lets you create automation rules:
- Orders under 1 lb → USPS First Class
- Orders 1-5 lbs within 3 zones → USPS Priority
- Orders 1-5 lbs beyond 3 zones → UPS Ground
- Orders over 5 lbs → rate shop UPS vs FedEx
These rules fire automatically when orders come in, and they select the cheapest option every time. One mid-size seller told me automation rules alone saved them $0.85 per package on average because they were no longer defaulting to Priority Mail when First Class would have worked.
Estimated savings: $0.50-2.00 per package
9. Consolidate Shipments
If a customer places two orders in the same day (or within a few days), combine them into one shipment. This sounds obvious, but most e-commerce platforms process each order individually by default.
Set a rule in your fulfillment workflow: hold orders for 12-24 hours and check for duplicate addresses. ShipStation can group orders by recipient automatically. Even combining 5-10% of your shipments can add up — you're eliminating one entire package's worth of postage per consolidation.
Estimated savings: varies, but eliminates redundant shipments entirely
10. Review Your Shipping Zones Quarterly
Carriers update their zone charts, and your customer base shifts over time. If 60% of your orders now ship to Zone 4-5 instead of Zone 2-3, your pricing strategy needs to reflect that.
Pull a report from your shipping software showing shipments by zone. If you're using flat rate pricing, make sure it's based on your actual zone distribution — not what you assumed when you launched. A lot of stores set flat rate shipping at $6 based on mostly-local customers, then wonder why they're losing money when they start getting orders from across the country.
Estimated savings: prevents losses from zone mispricing
11. Use USPS Cubic Pricing for Heavy, Small Items
This is one of the most underused savings tricks in e-commerce. USPS Cubic Pricing charges based on the physical dimensions of the package rather than its weight, up to 20 lbs. If you ship anything heavy but compact — think candles, sauces, cosmetics, hardware — Cubic can be dramatically cheaper.
Example: A jar of premium honey weighing 3 lbs in a 6x6x4 box. Priority Mail by weight: $12.80 to Zone 5. Priority Mail Cubic: $8.15 to Zone 5. That's a 36% savings on a single package.
Pirate Ship calls this "Simple Export Rate" for domestic parcels and makes it dead simple to access. Not all platforms surface Cubic rates automatically, so double check that yours does.
Estimated savings: 20-40% on small, heavy items
12. Pass Savings to Customers Strategically
This last one isn't about cutting your costs — it's about using your lower costs to make more money. Once you've reduced your per-package cost, you have options:
- Lower your free shipping threshold to boost conversion (if your shipping costs drop from $9 to $6, you can offer free shipping at $45 instead of $65)
- Offer a cheap economy option — a $2.99 "Economy" shipping option using SurePost or First Class can reduce cart abandonment by 15-20%
- Keep margins and invest elsewhere — put the savings into better packaging, faster handling, or marketing
The sellers who win long-term aren't just minimizing costs — they're reinvesting savings into better customer experience.
Adding It All Up
No single strategy here will transform your business overnight. But stack three or four of them together, and the impact is serious. I've seen stores go from spending $4.50 per order on shipping to $2.80 by combining rate shopping, right-sizing, and automation.
On 1,000 orders a month, that's $1,700 in monthly savings — over $20,000 a year. That's real money going back to your bottom line instead of to the carrier.
Start with #1 (shipping software) and #2 (right-size packaging) this week. Those two alone will get you the biggest immediate wins. Then work through the rest as time allows. Your future self — and your P&L — will thank you.