Smarter Packaging to Save on Shipping Costs

Written by Mikhail Ledvich

When it comes to cutting shipping costs, most businesses only focus on the question “what are the cheapest shipping rates I can get?” But many companies save millions of dollars each year by changing the dimensions of their shipments by fractions of an inch.

Don’t leave packaging until the very last moment. Consider the boxing and unboxing experience as you think about how your customers would engage with the product. Designing packaging for your products by solely considering how well it fits or looks in the box is potentially wasting money.

By planning ahead and strategically designing your product packaging to optimize for shipping, you could end up saving money and get products into the hands of your customers faster. So let's take a look at 5 ways for smarter packaging to save on shipping costs.

1. Think about “dimensional-weight”

Many of the carriers, namely UPS and FedEx, take box dimensions, in addition to the weight, into account when calculating the cost of shipping. This is called DIM or dimensional weight. Each carrier uses a formula that involves multiplying width by height by length of the box and dividing it by a coefficient (called “DIM factor”) to determine if you will be paying for the size of the shipment in addition to the weight.

Dimensions

If you can package your product into a smaller box, it can lead to significant savings for each item shipped. This is particularly important if you’re shipping light but bulky items. This is why it's very important to think about product packaging and design early in the process. A focus on keeping the product packaging compact can results in savings on each shipment later.

If you are already doing large volume of parcels per day, take a look at the types of packages you’re shipping. You may be able to negotiate your specific DIM factor with FedEx and UPS, the same way you’ve likely negotiated shipping rates.

2. Minimal padding and packaging material

Once your product is packaged and ready for shipping, the item will be repeatedly packed into boxes – with additional padding and packaging material.

When designing product packaging, look for material that will allow your product to be padded and securely packaged with minimal additional protection. Using smaller package boxes will save money on each shipment, even if this means using heavier materials for the product box.

3. Consider poly-mailers

Another packaging option that is often overlooked is poly-mailer bags. Poly-mailers are classified for a different (usually cheaper) rate by most carriers.

As an added benefit, certain poly-mailers have double tape strips, which means they can be used by customers for returns. Once opened, they have another glue strip that can be used to re-use the same mailer. Combining double-use poly-mailers with scan-based return labels is another way to increase customer satisfaction during one of the most negative interactions with your product — when the customer wants to return it.  

A scan-based based label is a shipping label that is free to print. You will only be charged if it gets used – or “scanned” by the courier. Scan-based return labels are great for inserting right inside your box when processing the outgoing order and are offered by all of the major carriers.

4. Carrier packaging

Most carriers provide free packaging boxes for their customers; you just have to ask for them. Everyone is familiar with the free boxes from USPS that are available from post offices, but UPS and FedEx will provide free boxes for their customers as well - you just need to ask them for it.

You may notice that some boxes from the USPS are specially marked; these are flat rate boxes. These boxes are one of the most cost effective ways to send heavy shipments across the country – up to 20 lbs. If you can fit your items into a predetermined flat rate shipping box, you can use this alternative USPS shipping method to save on shipping costs.

5. Stock up on box sizes

As you plan your operations, you should consider storing multiple box sizes needed for most orders, versus attempting to fill all order types into fewer box sizes.


Package Options

As an example: If you are selling one product individually as well as in bundles of 5, make sure that you are still considering orders of two, three, or four. Have specific boxes for orders of 1, 2, or the 5 bundle products to account for all the combinations. For orders of 3, pair the box of 2 with an individual order. For an order of 4, you can ship two of the box of 2.

The end goal is to avoid shipping extra air. Take a look at what average orders look like and stock a variety of boxes to accommodate for them.

Take some time to invest in your packaging from the very beginning. Considering packaging and shipping early in your manufacturing and fulfillment process will help you save a significant amount of money, no matter what rates you negotiate. Come learn more about how to save on shipping costs by visiting goshippo.com


Learn more tips like this at HardwareCon 2018, the Bay Area’s Premier Hardware Innovation Conference on April 19th-20th.  Experience two full days of keynotes, panels and workshops focused on the most important topics around building a successful hardware company. Get" class="redactor-linkify-object">http://www.hardwarecon.com/">G... your tickets here now if you want to meet the hottest startups, investors and industry leaders across the global hardware ecosystem.

About The Author

Mikhail Ledvich

Mikhail Ledvich

VP of Marketing at Shippo

Mikhail Ledvich is the VP of Marketing at Shippo, the multi-carrier API and dashboard to help businesses and platforms get real-time rates, print labels, automate international paperwork, track packages and facilitate returns. Shippo provides the platform to help businesses succeed through shipping.

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