How to get better shipping rates for your ecommerce business

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Customers demand speed, reliability, and affordability in equal measure, making delivery details an essential consideration in running your online store. Careful calculation is critical because shipping rates can be either the silent heroes or the dastardly villains of your e-commerce operation.

The bottom line: No matter how much effort you put into meticulously curating your store, perfecting product descriptions, and sprinkling a dash of charm on your checkout page, it’s often the shipping cost that has the final say.

Trying to figure out how to get better shipping rates to streamline your operations? You’re in the right place! Buckle up and join our tour of all things shipping as we uncover the secrets of finding and securing the best rates for your online empire.

Why are competitive shipping rates important for online businesses?

Research shows that extra costs like shipping fees are the top reason for cart abandonment. And for good reason. Imagine a customer’s delight at finding the perfect product and giddily adding it to their cart, only to be greeted by a poor shipping experience. 

But it’s not just about sparing customers from sticker shock. Shipping rates are the invisible hand shaping your product pricing and profit margins. So, there’s more to it than offering customers a sweet rate to seal the deal. It’s about striking the right balance so you can get your goods out to customers pronto while still hitting your profit margin goals. 

What are the challenges in finding and securing the best rates? 

Ah, the labyrinth of shipping options—a place where even the most seasoned entrepreneurs can find themselves lost in a sea of carrier jargon and fine print. The biggest roadblocks in mastering how to get better shipping rates include:

  • Understanding complex pricing structures – From base rates to dimensional weight pricing and zone-based tariffs, understanding the intricate dance of numbers and variables can feel like navigating a minefield.
  • Fluctuating fuel costs – Just when you think you’ve got a handle on your costs, along comes a sudden spike in oil prices to throw a wrench in your plans. We’ve all been there.
  • Hidden fees – Uncovering sneaky extra costs requires a keen eye and a healthy dose of skepticism.

But fear not! We’re here to help you remove the mystery and decode the gobbledygook! Let’s dive into shipping rates in more detail and help you evaluate your needs. 

How do shipping rates work? 

Shipping rates aren’t just a number slapped onto a package. They’re meticulously calculated based on the following factors:

  • Weight and dimensions – Carriers often use dimensional weight pricing, which considers size as well as weight. Heavier and bulkier packages typically incur higher shipping rates, so even if a package is light, it may still be charged at a higher rate if it’s large.
  • Shipping zones – Delivery destinations are divided into zones based on distance from the point of origin. Shipping to closer zones generally costs less due to lower transportation costs.
  • Service level and speed – Some carriers offer varying levels of service (e.g., standard, expedited, overnight) with corresponding rates. Faster shipping options usually come with higher rates. 
  • Surcharges – Extra charges for address correction, residential delivery, weekend delivery, etc., can significantly impact the total shipping cost.
  • Volume and frequency discounts – Businesses with high shipping volume and/or frequency can often negotiate lower carrier rates. 
  • Seasonality and market forces – Factors like seasonal demand, carrier capacity, and those pesky fuel price fluctuations we mentioned above can all push up shipping rates. 
  • Additional services – Add-ons for insurance, tracking, signature confirmation, special handling, etc., come at a higher premium. 

A word to the wise: Just as no two snowflakes are alike, no two shipping carriers calculate their rates in exactly the same way. Whether it’s based on weight, dimensions, distance, the relative position of the moon to Jupiter, or whatever else, each carrier has its own unique formula. Careful research to understand the intricacies of each option is therefore essential.

How to evaluate your shipping needs effectively

It’s impossible to determine how to get better shipping rates if you don’t have a solid understanding of your own shipping needs. Here’s a quick step-by-step to get you started:

  • Step 1: Review your product catalog – What is the typical size and weight of your products, and do any require special services like fragile item handling or temperature-controlled shipping?
  • Step 2: Assess volume and frequency – Take a deep dive into your shipping data to get a clear picture of your average daily, weekly, and monthly order volume.
  • Step 3: Identify common destinations – Where are your customers located? Consider which regions receive the bulk of your shipments, and try to identify patterns and trends. 
  • Step 4: Analyze customer preferences – Do your customers value speed above all else, or are they willing to wait a little longer for a cheaper shipping option? 

Once you’ve got this information in hand (or, more likely, on a spreadsheet), you’re ready to start evaluating carrier options. 

How to research shipping carriers and options

When it comes to selecting the right carrier for your business, knowledge is power. Learning how to get better shipping rates involves familiarizing yourself with all available options. Here’s a quick breakdown of the major players.

1. UPS (United Parcel Service)

With an extensive global network spanning over 220 countries and territories, UPS delivers around 22.3 million packages daily. Shipping options include ground, air, and freight services, all supported by a tried-and-tested tracking system.

2. FedEx (Federal Express)

Renowned for its express services, FedEx offers speedy domestic and international delivery, with options for overnight, next-day, and two-day services. Also covering 220 countries and territories, FedEx accounts come with smart tracking tools and free packaging

3. USPS (United States Postal Service)

An affordable choice popular due to extensive domestic coverage, USPS offers shipping via Priority Mail, First-Class Mail, Ground Advantage, and more. Major drawcards include competitive rates for small packages and Saturday pickup and delivery services for no extra fee.

4. DHL

A global leader in express shipping, DHL specializes in rapid international services. Delivering over 1.6 billion parcels annually, DHL exemplifies efficient customs clearance processes and reliable delivery performance. Services include express, freight, and e-commerce solutions. 

In addition to these carriers, you may also want to explore regional, niche, and specialty shipping services that cater to specific geographic areas or additional needs like temperature control, hazardous material handling, or white-glove delivery. In narrowing down your selection, you should prioritize:

  • Carriers with a reputation for reliability and on-time delivery. 
  • Tracking capabilities for enhanced transparency.
  • Responsive and efficient customer service.

Pros and cons of national vs. regional carriers.

National carriers like those listed above offer broad coverage, standardized service levels, and advanced tracking systems and logistics technology, providing a predictable experience. However, their rates tend to be higher, and if policies are too strict, your flexibility in terms of customization and negotiation may be limited. Plus, due to the sheer volume of shipments handled, delays might impact delivery time during peak seasons or unforeseen circumstances. 

Regional carriers usually offer more competitive rates for local shipments. They’re also likely to provide a more personalized service, attention to detail, and faster transit times to nearby destinations. However, smaller carriers may lack the resources, infrastructure, and tracking capacity of their larger cousins, potentially leading to reduced product visibility, capacity constraints, and service limitations during peak periods.

National CarriersExtensive coverageHigher Costs
 Standardized serviceLimited Flexibility
 Advanced technologyPotential for Delays
Regional CarriersLower costsLimited coverage
 Personalized serviceSmaller scale
 Potential for faster transit timesLess advanced technology

Alternative Shipping Methods 

Outside of national and regional carriers, you have two other primary options:

  • Freight Shipping – Ideal for large, heavy, or bulky items that exceed standard parcel size and weight limits, palletized shipments provide specialized services for moving freight. However, you should expect longer transit times and be prepared for additional handling fees for loading and unloading.
  • Dropshipping – Moving products directly from supplier to customer can significantly reduce shipping costs. You’ll also save money on warehousing, although reliance on a third party may limited control over quality, inventory management, and shipping processes. 

How to negotiate with shipping carriers

We know that negotiating can be daunting. But don’t sweat it! With the right approach, you can secure favorable rates. Here’s some top tips on how to get better shipping rates by navigating the negotiation process like a pro:

  • Build relationships – Establishing rapport by treating carrier representatives as partners rather than adversaries can often be beneficial. 
  • Leverage your shipping volume – Use your shipping data and projections to demonstrate the volume of business you can provide to strengthen your negotiating position.
  • Leverage your shipping history – Demonstrate a reliable payment history to increase your bargaining power during negotiations.
  • Use third-party logistics (3PL) providers – Their extensive experience and market knowledge often mean 3PLs can negotiate discounted rates on your behalf.
  • Understand market rates – Research carefully and benchmark the offers you receive against industry standards to determine which are the most favorable.

How to use technology with shipping platforms

Shipping Management Software can be a serious timesaver in helping you find the lowest-cost shipping service for your orders. Take Linnworks’ shipping management platform as an example. Our shipping network comprises 70+ integrations, including UPS, DHL, FedEx, and many more. The Shipping Quotes feature allows you to compare services from a range of carriers within just a few clicks to find the cheapest real-time rate for your orders. 

However, software solutions aren’t just helpful for working out how to get better shipping rates. Integrating a comprehensive shipping management platform into your ecommerce site will also help you:

How to implement creative shipping strategies

In the realm of e-commerce, creative shipping strategies can be the secret sauce that sets your business apart. Here’s a savvy playbook of innovative approaches you could try:

  • Free shipping with minimum purchase thresholds – Encourage customers to indulge more by dangling the carrot of free shipping for orders surpassing a certain spend. It’s a win-win – customers feel like they’re getting a deal, and you’re boosting your average order value.
  • Flat-rate and tiered shipping options – Activate the KISS principle by offering transparent flat-rate or tiered shipping options. Again, it’s a win-win. Your customers get clarity, and you maintain control over shipping costs.
  • Local delivery and pickup – Offering local delivery or pickup options puts a modern twist on the traditional corner store experience. 
  • Environmentally friendly shipping – Connect with conscientious consumers by promoting options with recyclable packaging, partnerships with carbon-neutral carriers, etc.
  • Same-day delivery services – Embrace the need for speed with same-day delivery services that provide buyers with instant gratification.
    H2: How to monitor and adjust your shipping strategy

Knowing how to get better shipping rates is one thing. However, market forces are forever changing, so you also need to know how to maintain the best rates over the long term. Here’s how to keep your finger on the pulse so you’re always on point with your strategy adjustments.

  • Regularly review shipping costs and carrier performance – To get the most bang for your buck, you’ll need to monitor shipping spend, delivery times, and order accuracy to identify inefficiencies and areas for improvement.
  • Keep up with rate and regulation changes – You want to be ahead of the curve, not chasing after it. Staying informed about the factors affecting your operations helps you identify opportunities for cost savings and renegotiation.
  • Seek feedback – Don’t be shy! Ask your customers for a digital report card on their delivery experience so you know first-hand how you’re doing and where you can improve.
  • Track Key Performance Indicators (KPIs) – Whether it’s on-time delivery rates, shipping costs as a percentage of revenue, or customer satisfaction scores, KPIs are like GPS for your business, constantly working to find the shortest route to growth and profitability.

Shipping in a nutshell: summary and key takeaways

Long story short, nailing the shipping game is all about making informed decisions that boost your bottom line while keeping your customers satisfied. With the right blend of strategy, technology, and customer-centricity, you’ll soon be charting a course toward ecommerce success.

Oh, and one last thing…

It’s a common theme in our blog resources, and we don’t want to sound like a broken record. However, the impact of investing in e-commerce software solutions to increase cost efficiency and streamline processes cannot be understated. 

Shipping management tools don’t just help with how to get better shipping rates. The right technology facilitates cost savings across the board by syncing with inventory management and stock forecasting software, warehouse management systems, and more. 

Got shipping questions? Request a demo or take an interactive tour today to learn more about Linnworks’ ecommerce optimization solutions. Alternatively, you can fill out a quick contact form to hit up one of our experts with your questions and discuss your business needs. 

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Linzi Trafford


Linzi Trafford is a SaaS-loving, self-professed grammar nerd. She’s written for industry leaders like Crunchbase and Spotify, tech-for-good firms like UpMetrics and Recite Me, and a whole heap in between. When not hammering away at her keyboard, you’ll find her hiking with her rescue dog, singing with her band, or getting stuck into a good old-fashioned whodunnit novel.