16 Ways to Save on Postage and Shipping Costs

Postage and shipping costs are a significant expense for many small businesses. While mailing a letter or two isn’t going to break a business owner’s budget, for those who send out hundreds of letters a month or ship products, shipping and postage costs can take a chunk out of their bottom line. This guide uncovers 16 ways business owners can save on shipping and mailing costs to get more for the money they spend.

If a business does much mailing, the US postage and shipping rates take a big bite out of its annual budget. And it adds up pretty quickly: a stamp for a standard regular envelope currently costs $0.78 to send (postcard stamps are $0.61). Priority mail starts out at $11.00 and rises depending on the size and weight of the package sent. It doesn’t take much for those otherwise small costs to turn into a significant line item on the company expense report.

16 Ways to Reduce Shipping Costs

Here are 16 strategies business owners can try to keep their shipping costs low. These ideas won’t all fit every single business’s unique needs, but they might be a great place to start to help reduce costs.

Avoid sending documents by US mail when possible.

Many customers are willing to have documents sent via email instead, especially from trusted businesses. Doing that (when customers agree) can save money, especially when sending invoices, proposals, presentations, contract terms, and in some cases, even signed documents. Many office printers can scan documents into PDF format for easy emailing.

Get a scale.

Weighing every piece of mail can help a business owner determine the exact postage they need for each piece they mail (as opposed to guessing and hoping for the best). On a related note, it’s helpful to keep stamps in several denominations on hand: some for postcards, others for standard-sized envelopes, and some for oversized envelopes.

Check dimensional weight price differences and compare carrier rates when shipping boxes.

Shipping expenses for packages are determined by dimensional weight (called dim weight for short), which accounts for both the actual weight of the box and its size. The dimensional weight, paired with the destination, is what determines the shipping rate. Where possible, business owners can try using a smaller box to ship the same item (without neglecting the appropriate packing materials to keep the items safe).

To help keep costs low, business owners can also occasionally check rates with different shipping services. For example, on a given week, it might be cheaper to use flat rate shipping or USPS Ground Advantage, and it might be cheaper to use UPS or FedEx for a different package. Using shipping software can help make it easier to determine cheaper shipping rates at a glance for a specific package.

Cut down on packaging costs.

It’s easy to get bogged down thinking about how much it costs to send a package, but what about how much it costs to box it up? Cardboard boxes, manila envelopes, padded envelopes, packing peanuts, and bubble wrap all cost money (sometimes more than expected).

Sometimes, it’s possible for a business owner to use a smaller box or envelope for the items they’re shipping. But that doesn’t always work. Sometimes it’s helpful to buy those boxes and supplies from a different provider instead. For example, Amazon, ULINE, and PackagingSupplies.com are just a few of the sites that sell shipping supplies. Smart business owners will “shop around” to find the best rates for the boxes and materials they use for shipping. Optimizing packaging can save a lot of money in the long run.

Use metered mail or print postage online for lower costs.

Using online postage sites like Stamps.com or using metered mail can help save a little money with each mailing. These shipping discounts aren’t massive, but every bit helps. Some business owners even find it helpful and cheaper to print shipping labels online through sites like Pirate Ship.

Pay bills and invoices online.

Paying bills and invoices online isn’t just convenient; it helps save money because business owners don’t have to print out checks or pay for the postage to mail them. That means fewer checks bought and fewer stamps. Win-win.

Use standard business envelopes where possible.

When a business owner mails a document that weighs less than an ounce, it’s helpful to fold it to fit in a standard business-size envelope rather than mailing it flat. A standard envelope costs just $0.78, while a 9 x 12 envelope starts at $1.27. That $0.49 difference doesn’t seem like much at first, but it does add up.

Send ads alongside other mail.

When the business does send invoices by mail or ship merchandise to customers, they can insert ads and promotions for other products and services. The ad gets to ride along for free as long as the weight of the paper it’s printed on doesn’t bump the cost of the mailing into the next rate range.

Check the weight of paper used in mailers.

Lots of ad designers and graphic designers recommend printing an ad on a specific type of paper because it will look the best on that stock. But they don’t always consider how much that ad would cost to mail due to the thicker paper.

Smart business owners will get a sample of the paper and check how much it weighs so they know the cost to mail the piece. If its weight increases postage, they’ll ask their designer to choose a lighter weight paper.

Send a postcard instead of a letter.

Currently, it’s 17 cents cheaper to buy a postcard stamp than a standard letter stamp with USPS. Business owners can consider using postcards instead of standard letters for some types of mail, such as advertisements and notices about sales.

When offering free shipping, set an order threshold.

Very few companies can follow Amazon’s business model and offer free two-day shipping to every single member (few companies have the bandwidth to create their own in-house shipping operations). But it’s no secret that a lot of today’s customers prefer brands that offer free shipping.

To strike a balance between that customer preference and the feasibility to offer free shipping, many businesses set a threshold that “earns” the customer free shipping. Not only does this drive a higher total sale, but it can also allows the business to send multiple items in the same package, reducing the effective expense of offering free shipping.

Use bulk mail if the business regularly mails large quantities of letters.

Bulk mail is a term the Post Office uses for both first-class and advertising mail that is sent in bulk quantities. While these USPS discounts can add up, sending items as bulk mail does require a permit. Business owners can check with the local postmaster to find out about costs and mail preparation requirements to determine if getting their own permit is practical. For some, it might be more economical to use a third-party mailing service to prepare and send bulk mail.

Consider Every Door Direct Mail (EDDM).

EDDM is a relatively new service from the Post Office which gives discounted shipping rates to local small businesses that want to mail to residents in their service area. What it does is allow a business to send mail to every mailing location in a specified area, which can be narrowed down to just a specific mail carrier’s route, if desired. A “retail” version of this service can be used without getting a mail permit.

Clean the house mailing lists.

Mailing to a bad address costs a business postage and the money it took to create that mailer. No one wants to raise their overall shipping expenses by sending mail to places that have zero chance of any return on investment. That’s why it’s prudent for business owners to periodically check their mailing addresses to remove any outdated or duplicate addresses.

Consider USPS Priority Mail instead of Priority Mail Express.

Sometimes, a business owner needs to use Priority Mail Express (or a similar shipping speed from another carrier). But the undeniable fact is that ground shipping costs a lot less than faster methods that require air travel. For example, current rates for Priority Mail start at $9.04 for commercial rates ($11.00 in-office), while Priority Mail Express starts at $31.11 for commercial rates. Often, the delivery speed is only a few days slower.

Granted, it’s the absolute cheapest to use Parcel Select or Media Mail (for qualifying items). But for many businesses, “upgrading” to Priority Mail can make a big impact by balancing efficient delivery with a moderate cost increase. Depending on the shipping location, Priority Mail may only cost a few pennies more than regular parcel rates.

Offer downloadable or cloud-based versions of certain products.

If a business offers information products, such as training materials or books, it might be possible to offer an online version of the product at a lower price. Not only does this save the customer money, but it also helps the business owner save on the time and expense of shipping and handling.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.