Assuming you ship physical goods to your end customer, at some point you’ll need to figure out how you will be getting your products to their destinations. There are a multitude of different ways to ship packages and it can get quite confusing deciding what the best option is for your online store.
I’ll provide a breakdown of the 3 biggest shipping carriers and when or why you should ever use them. I will rate these 3 services based on following criteria: price and reliability.
United States Postal Service (USPS)
USPS is by far the cheapest shipping option if your parcel weighs less than 2 pounds. Parcels weighing 13 ounces or less that qualify for first class postage are even cheaper to ship. At the present time, USPS offers 3 main shipping services
- First Class Mail – Arrives within 2-5 business days
- Priority Mail – Arrives within 2-3 business days
- Express Mail – 1 – 2 business days depending on location
If you are on a shipping budget and you typically ship items weighing less than 2 pounds, choosing USPS is a no brainer. If your parcel weighs over 2 pounds and it can fit in a priority mail flat rate box, USPS is a fantastic deal.
The Express mail option is by far the most inexpensive next day delivery service offered in the US. The only problem with Express Mail is that USPS only offers 2nd day delivery to remote locations. So if your customer lives in Podunk, Wyoming, it will definitely take 2 days for your parcel to arrive there.
The low price of choosing USPS to ship your parcels comes at the expense of reliability. Besides Express Mail, USPS does not guarantee the delivery date of any of your parcels. What this means is that you can never predict exactly when a parcel will arrive.
I’ve even had a few cases where a package took over 3 weeks to arrive at the destination. This can be unacceptable to the customer so you have to take into account the risks.
The other problem with USPS is that they provide inaccurate tracking. Sometimes, the tracking only kicks in once your parcel has reached its destination which makes it pretty useless.
You can always negotiate with UPS for lower rates if you ship a large volume of packages. For the purposes of my analysis, I’m going to assume out of the box pricing.
UPS shipping costs tend to be on the higher side. I’m not sure exactly why the non-negotiated prices are so high but I suspect its because UPS is unionized. It really only becomes economical to ship UPS if your package exceeds 3 pounds. In addition to ground shipping, UPS also offers 3 day, 2 day and next day shipping depending on your needs.
UPS is one of the most reliable shipping carriers available. At any time, you can track your package to find out exactly where it is. In my experience, they are almost always on time.
Fed Ex used to only be known for their next day delivery service. For a while now, they’ve been offering a ground service as well at really low prices. Fed Ex is cheaper than UPS and USPS for packages exceeding 3 pounds. If you sign up for an account, you get an additional 15% off shipping right off the bat as well.
As far as I can tell, Fed Ex is just as reliable as UPS if not more so. They also offer detailed tracking of your package every step of the way.
Choosing The Right Shipping Carrier
If price is your main concern, then go with USPS for packages up to 2 pounds. If your package is really heavy, consider using the Priority Mail flat rate boxes if your item will fit in the box.
You can also further reduce your shipping costs by going with a USPS provider called Stamps.com. For almost all of the services that the United States Postal Service provides, Stamps.com can provide you with significant discounts on shipping. Check them out.
Otherwise, Fed Ex is your next economical option. I really don’t see a reason to use UPS at all unless you can negotiate down the prices. I’ve heard that for large businesses, UPS can get very aggressive on pricing.
Since this blog is about small businesses, Fed Ex will most likely be the cheaper option. Make sure you negotiate!
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