When ecommerce stores and retailers ship their first large boxes, they’re usually surprised by the added cost that comes when the carrier charges by size instead of weight. Sometimes this dimensional weight (DIM weight) can cause a significant increase in price that’ll harm profitability.
Carriers such as USPS, FedEx, and UPS will calculate DIM weight on every package you send — other than flat-rate items — and charge you most out of the traditional or DIM weight price. Every year, these costs seem to rise, and formulas change.
If the 2020 updates are causing you headaches and making it hard to predict your fulfillment costs, we’ve got a few tricks and resources to help you cut costs and still be able to keep customers happy. And that’s never been more important than during the current outbreak.
Let’s get started with the most straightforward packaging update.
First and foremost, ensure that you’re packing the smallest box that will safely hold your packages and filler materials. Test to prevent damage or breakage, but also see how you can safely prepare things to keep them safe on long journeys.
You don’t want to be like Amazon and ship small things in large boxes because it’s unlikely you’re pushing to get the full-truckload and need to stack boxes in a particular way. At the same time, using an excess amount of room may make it more likely that some products get damaged as they slide around.
Even shaving off an inch or two from overall size can make a difference. Using a dimensional weight calculator, you can see that slightly different box shapes and sizes for the same weight will impact price.
It’s essential to check these options and multiple variations. Sometimes, a change will only impact one or two carriers. After you tackle the outside, it’s time to look inside.
Try a Different Infill
When trying to protect your shipments, infill can make a lot of difference. When you’re just trying to keep things from moving around, kraft paper is versatile and lightweight. It’s also recyclable and affordable.
When you need greater protection, bubble wrap and air pillows are increasingly common because they give more cushion without adding a lot of weight. Foam wraps are a smart alternative, too, because they’re thin and light. Fragile items may need something a little sturdier, and shredded cardboard can give you that needed security without adding a lot of tape weight or overall bulk.
Reusable packaging also has significant potential here. You’ll just want to check and make sure you meet any industry-specific requirements for reuse.
Test the strength and protection you need for your products. Then, test to see how much of each infill is required to give that. You might be able to shift not only to a lighter material at the same or a reduced cost. But, you could end up discovering that one method not only provides greater protection, and the reduced amount you need allows you to work with a smaller box.
You might also give your products a quick check to see if things can change. Can you take the air out of tires or sports equipment? Can you compress and vacuum seal something to shrink it down, as many companies do with mattresses?
There just might be some savings lurking when you’re reducing the volume needed inside a box.
Consider Flat Rates
Sometimes companies miss more obvious savings opportunities because they’re different than other practices. If you have a diverse set of products and orders, take a few minutes to review your flat rate options.
Priority Mail Flat Rate and Regional Rate offered by USPS are two options designed to make it easier for USPS to ship, and they may help you reduce your costs. Priority Mail Flat Rate is a fixed cost based on box size, regardless of how far the package is going. Many times, you’ll be able to fit goods in the medium and large boxes, which could help you avoid some dimensional weight costs.
Priority Mail Flat Rate boxes work for packages up to 70 lbs.
If you’re shipping less than that, you might also want to look at the Box A and Box B options for Priority Mail Regional Rates. Box A is designed for items up to 15 lbs. and Box B works for up to 20 lbs. Regional Rate calculations still use zones, but you’ll often save for local shipping compared to Priority Mail Flat Rates if you meet the lower weight requirement.
For instance, if you can fit your product in a Regional Box A, it is cheaper than the standard cost of a Medium Flat Rate Box ($13.20) for everything except a shipment to Zone 9.
A quick way to test savings options is to see if you can take products or shipments apart and send them via multiple boxes. For exceptionally large, lightweight items like a bike frame, you may be able to significantly shrink box sizes if the product can be folded or taken apart and shipped in two boxes.
This is a rare instance and generally only works with extremely light products, but some companies have found success.
There’s a hidden benefit here, too. If you plan for this type of shipment, you might be better able to control costs when fulfilling from multiple warehouses. Let’s say you have an order for 5 products and only 4 are at your main warehouse. Your secondary warehouse could send just the remaining item. Or, if you’ve planned to split up orders in the past, you might know that a mix of 2 items from one location and 3 from the other will reduce the size of boxes you need enough, cutting down how much you pay in total shipping.
You may want to research WMS and other tools that can help you automate these decisions by comparing price and shipping dates. In the end, there’s a chance you’ll save and can get orders sent to teams right away, so they’re not testing or struggling with fit.
Consider Third-Party Services
Last on our list is the simple action of outsourcing your fulfillment. Third party logistics companies (3PLs) that specialize in ecommerce and retail fulfillment can support your operations while managing and reducing your costs.
There are lots of general ways a 3PL can save you money, such as reducing labor costs or having you only pay for the storage space you’re using. For DIM weight, however, their big advantage is in the volume of business they do. By sending many packages every day and routinely meeting large load and freight requirements, 3PLs are able to negotiate better deals with carriers.
Most pass those savings on to you because it gives them a competitive advantage over you doing your own fulfillment. At the same time, they’ve got the software and other tools to optimize lane and box selection, getting products to your customers on-time at the most affordable rates. Fully automated partners do this by default, giving you the best option as soon as you start shipping with them.
It’s worthwhile to reach out to vendors, especially if you’re struggling with DIM weight costs. You could find significant savings with a partner. Or, at the very least, they may be able to point you to tools and practices that’ll help you cut costs in the near-term as you grow.
Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.