If you’re shipping large items, then you know the pain of high storage, handling, fulfillment, and especially shipping costs eating up your margin.
While you’ll always pay more to ship a chair than a pen, you shouldn’t resign yourself to eating sky-high rates. With higher shipping costs come larger opportunities to save money, and cutting a few dollars off cost off of each order goes straight to your bottom line.
In this blog, we’ll cover three of the top ways that you can reduce your cost while shipping heavy items. Implement them, and watch your profit jump and headaches melt away!
Distribute Inventory to Reduce Shipping Zones
To state the obvious, the farther you’re sending a package, the more you’ll be charged. Within the continental United States, shipping distance is governed by Zones. Short trips will be designated Zone 2, while shipping something across the country will usually be designated Zone 8.
If you’re fulfilling out of just one warehouse, you have no choice but to routinely ship to Zones 5 and up, which is especially costly with large packages. Even with two warehouses, much of the country will be outside of the low-cost Zones 2 & 3.
The simple trick is to ensure that you always have inventory close to the customer so that every shipment originates from Zone 4 or less; many call this a “distributed fulfillment strategy”. It requires 3 to 4 fulfillment locations strategically placed throughout the United States. Cutting your average shipped-to zone will drive savings straight to your bottom line.
Distributed fulfillment also comes with the enormous added benefit of enabling fast eCommerce order fulfillment – after all, if your product isn’t shipping far, then it won’t take more than 1 or 2 days to get to the customer. You can stop worrying about using extremely expensive services such as UPS 2nd Day Air and pay ground rates for customer-pleasing fast delivery.
This simple principle, though, is anything but simple in execution.
Based on Ground Shipping speeds
If you already have one warehouse, then it can be tempting to take it upon yourself to open 1-2 more US fulfillment centers across the country. While maintaining control of your customer experience is appealing, there’s never been a worse time to try to stand up merchant-operated fulfillment. Warehouse rents are at record highs, and Amazon has pushed the cost of labor as high as $22.50 per hour.
If you’re a marketplace seller, then you may already be using Amazon and Walmart’s in-house fulfillment networks, Amazon FBA and Walmart Fulfillment Services. These services will solve the distributed inventory challenge for you and enable fast shipping, but they also come with significant drawbacks. They’re designed for small products, so they both significantly raise prices for large items. Walmart, for instance, charges all items with a side length of over 96 inches or a combined length and girth over 130 inches as at least 90 lb no matter their actual weight, and then they add a $25 surcharge to boot.
Source: marketplace.walmart.com
Your last option is to outsource fulfillment to one 3PL with national fulfillment services, or to multiple single-location 3PLs. The best 3PLs will have 10 or more locations across the United States, so they can strategically place your inventory in the perfect position for your customer base. Be sure to use something like a 3PL request for proposal (RFP) template to get an apples to apples comparison between providers and the best deal.
Ship Heavy Items with the Right Carrier
Not every carrier is created equal when it comes to shipping heavy items, and relatively small adjustments in your package size and weight can have big implications when it comes to choosing the most cost-effective option.
FedEx’s guidelines on how to ship oversize items detail that they add an oversize shipping fee when packages have a girth of more than 130 inches. Note that if a package is over 150 lbs, or if its combined length and girth is more than 165 inches, then FedEx will classify it as freight and apply a completely different set of rules.
UPS governs its large items a bit differently. It will designate a package as a “Large Package” when its length plus girth combined exceeds 118 inches, but does not exceed its maximum size of 157 inches. In addition to assessing a Large Package Surcharge for packages that meet this criteria, Large Packages in UPS are also subject to a minimum billable weight of 90 pounds, regardless of their actual billable weight.
Finally, USPS is less equipped to ship large packages, and thus has more restrictive rules. Their maximum size for most mailpieces is 108 inches in combined length and girth, but USPS Retail Ground has a slightly larger allowance of 130 inches. Regardless of size, the maximum mailable weight of any mailpiece sent through USPS is 70 lbs. Packages that are between 108 and 130 inches in combined length and girth are subject to a special oversized price on USPS.
These guidelines leave wiggle room for savvy merchants to optimize their shipping costs. Note that FedEx’s oversize charge only kicks in on packages with a girth of more than 130 inches, while UPS and USPS have lower limits. On top of that, the latter two’s limits are based on combined length and girth. If your package fits under FedEx’s bar for oversize, but over the bars for the other carriers, then you know that you can avoid surcharges by shipping with FedEx.
You can take it upon yourself to negotiate with the carriers separately, or if you’re using shipping software like ShipStation, you can set manual rules and rate shop to scrutinize your orders for the best rates. On the other hand, next gen shipping software will do the hard work for you by automatically comparing major and regional carriers against each other for each order. Without any manual intervention, the software will take quirks like differences in surcharges into account and ensure that you’re getting the best deal, every time.
Optimize Package Size
Small changes in package size can make a big difference in your final shipping cost. When you’re shipping large and oversize items, every additional pound usually adds $0.30 – $0.50 to your cost, which adds up quickly!
Package size matters because of Dimensional Weight, or DIM weight for short. Major carriers introduced DIM weight around 2015 as a way to charge more for bulky, yet light products. The calculation is fairly simple: DIM weight is equal to L x W x H of your package, divided by 139. If the resulting number is larger than the weight of the package in pounds, then the shipping weight used to calculate price will be elevated to the DIM weight.
Source: JayGroup.com
In this way, inefficiencies in package design quickly add up to boost your shipping cost to well more than it should be.
Consider a package that is 24 x 24 x 24. This 2 ft cb package’s DIM weight is 99.45 lbs. If you’re shipping two pillows in that package, the actual weight is probably less than a tenth of the DIM weight. In that scenario, DIM weight increases your cost by $30 or more! What if you could shave 4 inches off one of the sizes by more efficiently compacting your pillows?
Those 4 simple inches cut the DIM weight all the way down to 82.88 lbs, a nearly 20% reduction. That package would fall into FBA’s “Medium oversize” category, with a shipping weight between 70 – 150 lbs. FBA’s fulfillment fee rises by $0.44 for each pound in that category, so shaving the 4 inches off of one side of the package would save you over $7 per order.
Cahoot Ships Heavy Items at Low Cost
Cahoot’s nationwide network of over twenty warehouses provides affordable national eCommerce order fulfillment for eCommerce merchants.
We cover each of the three key pillars of reducing the shipping cost of heavy items for you:
- We’ll strategically distribute your inventory to 4+ locations
- Our next-gen shipping software automatically finds the lowest cost shipping label that meets your delivery SLA
- We work with you to shrink package size
Unlike other providers, Cahoot also has the flexibility to work alongside existing merchant-owned warehouses (if you have them). We know that many merchants with oversize goods carefully manage fulfillment themselves due to how difficult the process can be. Cahoot will analyze your existing network and customer base, then add a few locations of our own to seamlessly extend your network into a nationwide footprint.
With this approach, you can continue to get value out of your existing assets while delighting your customers and your bottom line with affordable fast shipping.
Getting started with Cahoot is fast and easy – with pre-built integrations for major eCommerce channels like Amazon, Walmart, Shopify, and BigCommerce, we can get merchants started in as little time as it takes to send us your inventory.
Talk to one of our experts today and explore how we can be the key that unlocks the next level of your profitable eCommerce growth.
