How to Reduce Shipping Costs in 2023


How to Reduce Shipping Costs in 2023

Shipping costs usually make a huge dent in the profit margins of an eCommerce company. Some businesses pass on the shipping charges to their customers. But, this has a detrimental effect on the conversion rate. 63% of online shoppers will not buy if the shipping charges are too high.

So to keep the customers happy and maintain profitability, you need to reduce the cost of shipping. But, before you can do that, you need to understand how to calculate shipping costs. If you can understand the parameters that govern postage charges, the suggestions in this article will make more sense.

12 Ways to Reduce Shipping Costs in 2023


The following suggestions use governing principles of the logistics industry to help you find the cheapest postage options for your eCommerce business.

1. Reduce the Weight of the Package

Weight is one of the biggest contributors to shipping costs. So the best way to ensure cheap postage is to cut down the weight.  You first need to look at the products you are shipping. Check for all things that can be removed to reduce weight. Even small cut-downs can have a big impact.

For example, if you remove 10 grams from a 1 kg package. This reduction compounds as the volume increases. In this case, if you are shipping 1 tonne, you end up reducing 10 kgs of weight. This would allow you to make room for 10 more packages in the same shipment.

You should remove extra packaging, covers, wrappings, cushioning material and more. If possible, you can use thinner or lighter packaging material for shipping. But if you are shipping internationally, you might have to consider the possibility of damage during transit.

2. Pack Products More Efficiently

After weight, the next biggest parameter for postage cost is volumetric weight. You can create the cheapest postage just by packing products more efficiently. You can reduce the volumetric weight in a variety of ways.

You should begin with the packaging method. You can use bags or envelopes for shipping some types of products. These packaging options are great for products that don’t get damaged during transit, like clothes. This kind of packaging will help you reduce both weight and volumetric weight.


If you are using boxes, you can match the package to the dimensions. By reducing the dimensions of the package, you cut down the volumetric weight. This practice also has a compounding effect when you ship in large volumes.

Tight packaging also helps keep the products in place. Less movement means that the products are less likely to get damaged. It also means that you need less material to cushion the product. This further helps you cut down the weight.

These little changes can help reduce the overall cost of shipping by a significant margin. If you crave cheap shipping for your eCommerce business, you need to be smart with your packaging.

3. Consolidate Products for Shipping

You can make shipping cheap by consolidating multiple products into a single package. Instead of packing each product in separate boxes, you can put them all together in one box.


For example, if you are shipping a cricket kit. Instead of packing all items in separate boxes, you can pack the entire kit in one box. This helps you save money on weight and volumetric weight.

As you are shipping fewer boxes, you have to use less packaging material. You not only save money on packaging material and reduce the weight of the parcel. Fewer boxes also mean less volumetric weight. Both these parameters contribute heavily to the postage charges. By controlling these parameters you can significantly reduce the cost of shipping.

Product consolidation is one of the cheapest ways to send parcels. Even if you are selling unrelated products, you can still consolidate them for shipping. Then you can separate them for delivery at your fulfilment centre.

4. Use Micro Fulfilment Centres

By using micro-fulfilment centres you get to control two major parameters that affect postage costs. Firstly, you reduce the distance between the origin and the destination. You can store goods in micro-fulfilment centres close to the customer’s location. This way the parcel has to travel less distance to reach the destination.

Shipping distance is directly proportional to postage cost and delivery time. A micro-fulfilment centre can help you reduce both.

Secondly, you get more flexibility for shipping products. You can pack a variety of products into a single package for shipping to your micro-fulfilment centre. Then you can unpack this shipment and separate the products for storage. When the time comes to deliver the product to a customer, you can repack it as you see fit.

You also get more control over the package journey and modes of transport. You can use ships for large volumes and longer distances. Then you can use road transport, which is a cheaper shipping method, for the last step of order fulfilment.

5. Choose Flat Rates for Long Distance Shipping

In flat-rate shipping, the post cost is determined by distance and box size. Shipping companies usually have standard box sizes of varying volumes for flat-rate shipping. Then they set fixed prices for transporting that box between shipping zones.

So you will not have to worry about weight or dimensional weight. The company will charge you the same regardless of how heavy the box becomes. There is also no limit to the number of things you can stuff in the box. Depending on how smartly you can package the goods, you can get the cheapest postage costs with flat rate shipping.

If you are shipping such boxes in a large volume, you can save even more on shipping charges. The only other factor you will need to worry about is the distance. Flat-rate shipping also simplifies the postage cost calculation as you only have to factor in the distance and number of boxes. 

6. Use Consolidation Programs for Shipping

A consolidation program combines several packages into a single shipment. For example, 10 companies want to send a 1 kg parcel from Melbourne to Sydney. If they send their parcels independently, they will have to pay at least $16 each. Collectively, they will end up spending $160.


But, if they consolidate their goods into 1 parcel of 10 kgs, they will pay a total of $28. That’s just $2.8 per company. Individually these people have achieved the cheapest courier in Australia. By combining forces, these businesses can save a lot of money. They don’t even have to compromise on anything else.

This is how a consolidation program works. It helps businesses and individuals save money by increasing the number of packages. If you are shipping to popular destinations, it will be easy to find a consolidation program. You can also collaborate with other businesses to develop a consolidation program of your own.

7. Reduce Frequency to Increase Volume

You can still enjoy the benefits of consolidation without help from others. You can consolidate your future shipments to increase the volume. This will help you reduce the cost significantly. For example, You have to ship 20 kgs every month from Perth to Brisbane. Instead, you can ship 240 kgs in a single shipment.

As you have consolidated 12 parcels into 1 package, you have saved a lot of money. Firstly, you save on the cost of transport. Instead of paying for 12 trips, you are paying for only 1. Secondly, by consolidating the parcels, you get a volume discount from the carrier. And thirdly, you also save money on packaging and handling. This way you have created the cheapest way to send parcels in Australia.

Such consolidation depends on the products you sell and their demand. If the products expire fast, you might be able to use this method. But if the products have a long shelf life, you can easily consolidate the shipments. 

At the same time, you also need to see the demand forecast for different products in different regions. If a region does not have enough demand for certain products, it will be pointless to ship large volumes of products there.

You need to check the shelf-life of the products and match it against the demand for the products. This will help you decide the volume you can ship in those regions.

8. Breakdown of Modes of Transport

Different modes of transport have different effects on the cost of shipping and delivery time. Air freight is the fastest mode of transport, but it is very expensive. On the other hand, sea freight is the most cost-effective but takes the longest time.

If delivery time is not a problem, you should use the cheapest way to ship luggage. You can also break down volumes between different modes of transport. For example, you have to ship 100 kgs from Australia to England, but the urgent demand is only for 15 kgs. You can send 15 kgs by flight and the rest 85 kgs by sea.

That way you can get cheap shipping to UK from Australia without compromising on customer service. You can also reduce the shipping cost by breaking down the mode of transport based on distance. Say you want to send a shipment from Melbourne, Australia to New Delhi, India. If you send it by flight it will be quite expensive, but the parcel will directly reach New Delhi.

To get cheap international shipping from Australia in this scenario, you need to use both sea & road transport. You can send sea freight from Melbourne to Chennai, India. Then use road transport to take the parcel from Chennai to New Delhi.

9. Choose Hybrid 3PL Services

Third Party Logistics (3PL) services can help you at various stages of order fulfilment. You can use 3PL for storage, inventory management, and shipping. With hybrid 3PL services, you retain control of some parts and outsource the rest.

To reduce shipping costs, you can outsource the delivery part of order fulfilment to a 3PL partner. As shipping companies have a robust logistics infrastructure and regular transport routes, they can better manage those expenses.

You can also use 3PL services for overseas storage and distribution. This way you can find cheap ways to send parcels in large volumes. The 3PL company can store the shipment at their warehouses and dispatch them when needed.

Although, if you want complete relief from logistical headaches, you can outsource the entire order fulfilment process to a 3PL company like PACK & SEND.

10. Partner with Multiple Carriers

Different logistics carriers have different postage rates. Some carriers offer cheap domestic shipping but are too expensive for international postage. Similarly, you will find that different carriers have different prices for the same route.

For instance, Say you want to send a parcel from New York, USA to Perth, Australia. And you have 2 options: Company A & Company B.

Company A charges $800 for shipping to Brisbane and an additional $5 per kilometre for road transport to Perth. On the other hand, Company B costs $900 for shipping to Sydney and charges $3 per kilometre for road transport.

In this case, you can get the cheapest shipping from USA to Australia by using Company A for shipping and Company B for road transport.

Similarly, you can also choose different carriers for different volumes, weights, volumetric weights, shipping routes and so on.

11. Buy Shipping Protection Warranty

Protection warranty is necessary for postage as shipping is a risky business. Your products may get damaged during transit or get lost altogether. A good protection warranty ensures that you are well compensated for such losses.

But, a protection warranty shoots up the postage cost. It gets more expensive if you are shipping valuable items. The distance between the origin and destination also adds to the protection warranty charges.

Instead of using the protection warranty of the shipping company, you can choose a third-party protection warranty to reduce the cost. The rates of such companies are usually lower than those of a shipping company. But, they still offer well-rounded compensation in the event of loss or damage.

You will get apt compensation for any losses that occur and you can control the overall cost of shipping.

12. Offer Click and Collect Delivery

Click and Collect delivery allows you to reduce shipping costs by asking the customers to collect the products from a store or a fulfilment centre. This method is gradually becoming popular among eCommerce shoppers. Compared to 2021, 19% more people opted for the click-and-collect shipping option in 2022. This method relieves you from the burden of final (last-mile) delivery.


But, you can only offer this option in cities where you have a store or a fulfilment centre. And you still have to get the products from the warehouse to the store. Still, single-item delivery has the highest per-unit charges.

With this method, you only have to worry about shipping in volume. This kind of transport has lower per-unit charges owing to volume discounts. So, overall you and your customers get cheap shipping.

Key Takeaways for Cheaper Shipping

Hopefully this article has given you enough tips to significantly reduce your shipping costs. But, it is important to use them judiciously. While cheap postage options are attractive, you also need to consider their long-term impact on your eCommerce business.

The tips mentioned in this article are derived from fundamental principles of the shipping industry. If you understand these principles, you can come up with cheap postage methods for your business.

Important Principles to Remember:

  • Shipping Cost is directly proportional to weight, volumetric weight, distance, and speed of delivery.
  • But, cost-per-unit is inversely proportional to volume.

You should only use cost-reduction methods that balance benefits and sustainability. You can also make shipping cheap and hassle-free by partnering with an eCommerce order fulfilment company like PACK & SEND. You can get lucrative deals for a variety of shipping services and you’ll never have to worry about logistics again.

Frequently Asked Questions (FAQs)

How to Reduce Shipping Costs for Small Business?

There are several ways to reduce shipping costs for small businesses. You can be part of a consolidation program, use 3PL micro-fulfilment centres, reduce the volumetric weight of the parcels, and so on. As small businesses do not have large volumes, they need to focus on reducing the weight of the package and the distance of shipping. You can also outsource order fulfilment to a cheap freight company for flat shipping rates.

How to Reduce Shipping Costs on Amazon?

To reduce shipping costs on Amazon, you can reduce the product weight and volumetric weight. You can do this by packing the products more efficiently. You also need to do away with all unnecessary layers of packaging to cut down the weight.

How to Reduce Shipping Costs on Etsy?

You can reduce shipping costs on Etsy by using more economical delivery options. You can choose the Parcel Select option, Flat Rate Shipping, Regional Rate Boxes, etc. These choices are dependent on the products and customer locations. Based on these two factors, you can get cheap postage for small-business. You can also transfer shipping charges to the customer, but this practice may decrease your conversion rate.

How to Reduce Shipping Costs on eBay?

You can reduce shipping costs on eBay in a variety of ways. You can use eBay shipping labels, purchase supplies in bulk, ship in volume to get discounts, or use fixed-rate boxes to send more stuff. You can also use local distribution centres to reduce shipping charges. 

How to Reduce International Shipping Costs?

You can reduce international shipping costs by managing the weight and volume of the parcel. The cost of shipping depends on the weight & volumetric weight of a package. If you can reduce these parameters, you will get cheaper shipping. On the other hand, if you are shipping goods in large volumes, you can get better deals and offers from shipping companies.

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