I thought I would post some helpful tips for decreasing your
small parcel shipping costs since this is becoming more of an issue with the
majority of the shipping companies increasing their shipping rates. In this
post, I will focus mainly on dimensional weight and which box to choose based
off of it.
The most important factors UPS and other companies take into
consideration when calculating your shipping is the weight and dimensions of
your box. I’ve seen many businesses that do not realize the effect these
factors have on their costs. Since
logistics is one of the main expenses for many small businesses, it is definitely
worth your while to learn about some of the main factors that affect your
This is calculated by multiplying the length by the width by
the height, and then dividing the total by a particular factor. FedEx and UPS
will use this to gouge you if you are not careful.
For ground shipping, your rate is based off of the greater
of dimensional weight or actual weight when your box is over 3.0 cubic feet.
For air shipping, your rate is based off of the greater of dimensional weight
or actual weight for ALL packages. Before January 3 of this year, the dividing
factor was 194 for UPS and FedEx. Effective after January 3, the factor became
166 for boxes 3.0 cubic feet or larger for shipments in the US (whether ground
or air). So what does this factor change mean? Higher costs for all of us!
You want to be very particular about the dimensions of the
box that you choose for your product. If the size of your total package is over
3.0 cubic feet, then you want to make sure that you are being charged for the
ACTUAL weight and not the DIMENSIONAL weight (for ground). You need to be
worried about dimensional weight in ALL air applications though. So, use a box
that is custom fit to your item to keep your dimensional weight down. Ideally, it should be lower than your actual
Dimensions for Your Box
Let’s look at how to figure out how to size your box to your
product. It’s the general rule that you should have at least 2 inches between
your item and the box for padding (bubble wrap, wrapping paper, foam, etc.).
This will ensure that your product makes it to its destination safely.
So, let’s say you sell individual custom coffee mugs. The
mug is 5” tall, 4” wide, and has a depth of 5” (including the handle). If you
sell these mugs individually, find a box or mailer that is 7” x 6” x 7”. If
shipping ground you will be charged the actual weight on the item since your
package is less than 3.0 cubic feet. Not only does finding a box that extends 2
inches out from every angle save you on shipping, it generally saves you on the
cost of packaging materials since many packaging companies tend to charge more
for a cube box, than a non-cube box.
If you are shipping items in small or large case quantities
(e.g. 6 or 12 items), you may consider designing your case sizes around your
sales tiers. This cuts costs on packaging (i.e. you are buying one box instead
of 6 individual boxes) and it decreases the likelihood that your dimensional weight
will outweigh the actual weight.
Let’s say your sales department is selling product A in
quantities of 6 units. If your sales department is consistently selling 12
units at a time, it might make sense to design your packaging so that you are
able to ship out Product A in case sizes of 6 units and 12 units. This
minimizes your dimensional weight for a common sale and decreases your
packaging material costs. In many companies, this can lead to major cost cuts.
Ideally, each of your products should have its own packaging
dedicated to it (preferably in sync with your sales tiers). This ensures that
your packages arrive safely and you are not paying an arm and a leg for unnecessary
shipping and packaging expenses.
I’ll post another post here in a couple of weeks with some
more detailed solutions to packaging issues that will save your company money.
Hope you enjoyed!
Chase Hague Founder and CEO Prism Packaging Solutions, LLCwww.prismpackagingsolutions.com