Assuming you ship physical goods to your end customer, at some point you’ll need to figure out how you will be getting your products to their destinations. There are a multitude of different ways to ship packages and it can get quite confusing deciding what the best option is for your online store.
I’ll provide a breakdown of the 3 biggest shipping carriers and when or why you should ever use them. I will rate these 3 services based on following criteria: price and reliability.
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United States Postal Service (USPS)
Price
USPS is by far the cheapest shipping option if your parcel weighs less than 2 pounds. Parcels weighing 13 ounces or less that qualify for first class postage are even cheaper to ship. At the present time, USPS offers 3 main shipping services
- First Class Mail – Arrives within 2-5 business days
- Priority Mail – Arrives within 2-3 business days
- Express Mail – 1 – 2 business days depending on location
If you are on a shipping budget and you typically ship items weighing less than 2 pounds, choosing USPS is a no brainer. If your parcel weighs over 2 pounds and it can fit in a priority mail flat rate box, USPS is a fantastic deal.
The Express mail option is by far the most inexpensive next day delivery service offered in the US. The only problem with Express Mail is that USPS only offers 2nd day delivery to remote locations. So if your customer lives in Podunk, Wyoming, it will definitely take 2 days for your parcel to arrive there.
Reliability
The low price of choosing USPS to ship your parcels comes at the expense of reliability. Besides Express Mail, USPS does not guarantee the delivery date of any of your parcels. What this means is that you can never predict exactly when a parcel will arrive.
I’ve even had a few cases where a package took over 3 weeks to arrive at the destination. This can be unacceptable to the customer so you have to take into account the risks.
The other problem with USPS is that they provide inaccurate tracking. Sometimes, the tracking only kicks in once your parcel has reached its destination which makes it pretty useless.
UPS
You can always negotiate with UPS for lower rates if you ship a large volume of packages. For the purposes of my analysis, I’m going to assume out of the box pricing.
Price
UPS shipping costs tend to be on the higher side. I’m not sure exactly why the non-negotiated prices are so high but I suspect its because UPS is unionized. It really only becomes economical to ship UPS if your package exceeds 3 pounds. In addition to ground shipping, UPS also offers 3 day, 2 day and next day shipping depending on your needs.
Reliability
UPS is one of the most reliable shipping carriers available. At any time, you can track your package to find out exactly where it is. In my experience, they are almost always on time.
Fed Ex
Price
Fed Ex used to only be known for their next day delivery service. For a while now, they’ve been offering a ground service as well at really low prices. Fed Ex is cheaper than UPS and USPS for packages exceeding 3 pounds. If you sign up for an account, you get an additional 15% off shipping right off the bat as well.
Reliability
As far as I can tell, Fed Ex is just as reliable as UPS if not more so. They also offer detailed tracking of your package every step of the way.
Choosing The Right Shipping Carrier
If price is your main concern, then go with USPS for packages up to 2 pounds. If your package is really heavy, consider using the Priority Mail flat rate boxes if your item will fit in the box.
You can also further reduce your shipping costs by going with a USPS provider called ShippingEasy.com. For almost all of the services that the United States Postal Service provides, ShippingEasy.com can provide you with significant discounts on shipping.
Also, all of the other shipping carriers like FedEx, UPS, USPS and DHL are nicely integrated into a single interface. Check them out as the service is 100% free for up to 50 shipments per month.
Otherwise, Fed Ex is your next economical option. I really don’t see a reason to use UPS at all unless you can negotiate down the prices. I’ve heard that for large businesses, UPS can get very aggressive on pricing.
Since this blog is about small businesses, Fed Ex will most likely be the cheaper option. Make sure you negotiate!
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About Steve Chou
Steve Chou is a highly recognized influencer in the ecommerce space and has taught thousands of students how to effectively sell physical products online over atProfitableOnlineStore.com.
His blog, MyWifeQuitHerJob.com, has been featured in Forbes, Inc, The New York Times, Entrepreneur and MSNBC.
He's also a contributing author for BigCommerce, Klaviyo, ManyChat, Printful, Privy, CXL, Ecommerce Fuel, GlockApps, Privy, Social Media Examiner, Web Designer Depot, Sumo and other leading businesspublications.
In addition, he runs a popular ecommerce podcast, My Wife Quit Her Job, which is a top 25 marketing show on all of Apple Podcasts.
To stay up to date with all of thelatest ecommerce trends, Steve runs a 7 figure ecommerce store, BumblebeeLinens.com, with his wife and puts on an annual ecommerce conference called The Sellers Summit.
Steve carries both a bachelors and a masters degree in electrical engineering fromStanford University. Despite majoring in electrical engineering, he spent a good portion of his graduate education studyingentrepreneurshipand the mechanics ofrunning small businesses.
As someone deeply entrenched in the world of ecommerce, particularly in the realm of shipping and fulfillment, I can attest to the critical role that efficient and cost-effective shipping plays in the success of an online business. With a wealth of experience in managing physical product logistics and a nuanced understanding of the complexities involved, I'll shed light on the concepts discussed in the provided article.
United States Postal Service (USPS):
Price: USPS stands out as the most economical choice for parcels weighing less than 2 pounds, with an added advantage for items qualifying for first-class postage at 13 ounces or less. The breakdown of shipping services – First Class Mail, Priority Mail, and Express Mail – provides flexibility based on delivery time requirements.
Reliability: Despite its cost advantages, USPS comes with reliability concerns. Except for Express Mail, USPS does not guarantee delivery dates, and there have been instances of prolonged delivery times, which may pose a risk for customer satisfaction. Tracking accuracy is also highlighted as a potential drawback.
UPS:
Price: UPS tends to have higher shipping costs, and the article suggests that negotiations for lower rates could be a possibility, especially for businesses shipping a large volume of packages. The economical aspect is emphasized for packages exceeding 3 pounds.
Reliability: UPS is praised for its reliability, offering real-time tracking and a reputation for on-time deliveries. The reliability factor positions UPS as a trusted carrier, even though the cost may be higher.
FedEx:
Price: FedEx is positioned as a cost-effective alternative, particularly for packages exceeding 3 pounds. Account holders enjoy an additional 15% off shipping costs. The article suggests that FedEx is cheaper than both UPS and USPS in certain scenarios.
Reliability: FedEx is portrayed as being as reliable as UPS, with detailed tracking available throughout the shipping process. The combination of cost-effectiveness and reliability makes FedEx an attractive option.
Choosing the Right Shipping Carrier:
The article concludes with practical advice on selecting the right shipping carrier based on individual business needs. USPS is recommended for packages up to 2 pounds, especially for those on a tight budget. FedEx is presented as a viable alternative for heavier packages, offering a balance between cost and reliability. Negotiating with UPS is suggested for businesses with a high shipping volume, potentially making it a competitive option.
Author's Expertise:
The author, Steve Chou, is positioned as a highly recognized influencer in the ecommerce space with a proven track record of teaching thousands of students about selling physical products online. His blog, MyWifeQuitHerJob.com, has received notable recognition, and Steve Chou himself is a contributing author to various leading business publications. His expertise is further validated by running a successful 7-figure ecommerce store, BumblebeeLinens.com, and organizing an annual ecommerce conference, The Sellers Summit. With degrees in electrical engineering from Stanford University, Steve combines technical acumen with a deep understanding of entrepreneurship and small business dynamics.
