It may seem like large businesses get all the deals and discounts, given their high shipping volume and big spend. And as a small business owner, you may ask, “Is it even possible to get shipping discounts for my business?” The answer: absolutely.
Discounts, however, shouldn’t always take the place of determining the cheapest shipping options for small businesses as they’re not the same thing. A business owner needs to know where to look for the best shipping rate and shipping service for their needs.
When you’re looking for ways to save on small business shipping costs, consider what each shipping carrier offers your business, and whether you should instead rely on multiple carriers. For our purposes here, let’s begin with the large carriers to best understand how your business might benefit from a discounted rate or program that helps with small business shipping.
Does USPS offer small business discounts, and how do I get them?
USPS does offer a small business discount, if you meet certain criteria like a minimum shipping quantity. They separate their shipping into three pricing tiers.
- Retail: The most costly postage option, you get this rate at the post office.
- Commercial base: USPS offers commercial postage rates as a shipping option. You can get this rate through the USPS website and some other commercial sales platforms or Stamps.com.
- Commercial Plus: USPS Commercial Plus offers a higher shipping discount for Priority Mail services, and you’ll need to contact a USPS sales representative for details on this shipping option.
In addition to any small business shipping discounts, USPS offers other benefits of shipping with them, which can add value and lower costs you might pay with another shipping carrier. These business services are included with shipping, and include:
- USPS tracking (on select products)
- Shipping supplies you can pick up at the post office or have shipped to your address at no cost (for Priority Mail and Flat Rate shipping services)
- Package pickup for select products
- Saturday delivery, except on national holidays
- No surcharges on residential deliveries
Like the other major carriers, USPS offers an API portal with web tools to make the shipping solution easier to use and more transparent. This shipping platform integrates with ecommerce shipping software, and shares shipping rates, package tracking and package pickup scheduling. They also offer the Click-N-Ship service if you ship up to 10 packages monthly domestically or internationally. You can use a credit card for payment, and print your shipping label or labels when using this shipping platform. The Click-N-Ship Business Pro account is for those shipping 10 or more monthly, and offers additional tracking, reporting and integration features for a number of USPS services.
Outside solutions like Stamps.com or Pitney Bowes can give you USPS discounts and help to print shipping labels as well.
Does FedEx offer small business discounts, and how do I get them?
FedEx has a number of ways for a customer to receive discounted commercial pricing. If you have high enough shipping volume, FedEx will negotiate pricing with you. But there are other programs that FedEx offers, that don’t require negotiations, just a FedEx account.
FedEx Advantage: FedEx Advantage is one of these programs, and you can access it through some business relationships, membership groups, associations, and when shipping on the WalMart Marketplace. FedEx gives a discounted rate to the association’s members, which you can receive in your own FedEx account, and there are no minimum shipping required or enrollment fees.
While the FedEx Advantage program may save your small business up to 78% on select services, in reality the savings won’t be as high as that. This is a sample of rates you might expect from the FedEx Advantage program:
- 78% on specific FedEx Freight services
- 29% on specific FedEx Express U.S. services
- 25% on specific FedEx Express international shipping services
- 20% on specific FedEx Ground services
- 10% on specific FedEx Home Delivery services
- Additional 5% discount on shipping rates when creating a FedEx shipping label for eligible FedEx Express shipments with FedEx Ship Manager
Note that these discounted shipping rates may apply to base rates, not necessarily to surcharges, accessorial charges, special handling fees, or other features.
American Express: Companies using a corporate AmEx credit card can enroll in the FedEx Advantage program for small businesses, linking the credit card to the FedEx account. Through this program, your small business may save:
- Up to 16% off FedEx Express
- Up to 12% off FedEx Ground
- Up to 20% off FedEx Office
- Additional 5% credited to your statement when printing FedEx shipping labels
FedEx More Savings Program: One other FedEx program for small businesses is the FedEx More Savings Program. Companies must use FedEx Ship Manager or an approved FedEx electronic shipping solution for the program, which starts as a short-term (nine week) incentive program, giving up to 22% discount from eligible FedEx Express services, and 9% off eligible FedEx Ground and Home Delivery. After the nine weeks, the FedEx discount rates go up to 32% and 11% respectively eligible shipments, based on annual volume.
Does UPS offer small business discounts, and how do I get them?
Like FedEx, UPS offers some discounted shipping fees with various programs. Again, these are programs that don’t require your business to negotiate directly with FedEx, but to get some rate decreases without much work.
Associations: Some business associations will offer a UPS discount to associations and membership organizations. The larger discounted shipping rates might be in this range:
- 50% on Domestic Next Day/Deferred
- 30% on UPS Ground Shipment Commercial/Residential
- 10% off UPS Air and Next Day Air Early
- International shipping: 50% on Export; 40% on Import; 25% on Canada Standard
- Around 75% off UPS Freight shipments 150+ lbs
- Free UPS Smart Pickup service
Smaller discounts may be offered by other associations or membership groups like AARP or AAA, like a 5% discount at The UPS Store, for international and domestic and international shipping.
eBay: If your company sells products through eBay, you can also take advantage of UPS (and USPS) discounts when shipping your products. UPS offers eBay seller discounts like these:
- Up to 48% off UPS Ground shipping
- Up to 62% off UPS 2nd Day Air
- Discounts/waivers for some surcharges
- Use an eBay label and get shipment tracking
UPS Small Business Program: UPS runs small business promotions through their UPS Small Business Program, which can save small businesses on shipping for eight weeks, followed by another discount based on weekly UPS shipping volume. This is what they offer with a new account for a UPS discount:
- 40% off all services for eight weeks, followed by 35% discounts subsequently
- Up to 18% discount on UPS Air and international shipping
- 9% discount off UPS Ground shipments
Other shipping options for small businesses
While USPS, UPS and FedEx are the biggest names in shipping, they aren’t the only ones you should look at for lowering your shipping cost. DHL is well known for international shipping from the U.S., and should be considered as part of your shipping strategy. Regional carriers also should be in the mix or a least up for consideration. Depending on your shipping needs and destinations, it might make more financial sense to ship at least a portion of your parcels or LTL freight with regional carriers. They are used to working with small businesses, and specialize in coverage of specific areas.
Use a shipping platform
To get commercial pricing, a shipping company may want to use a platform that offers shipping services and volume discounts, without the shipper having to provide that volume by themselves.
Shipping platforms help calculate shipping costs for small businesses and negotiate rates with the carriers. The shipper can take advantage of these lower rates, while also having access to package visibility, parcel pick-up and scheduling, a shipping calculator, analytics and reporting.
The shipping platforms can offer small businesses discounts on their shipping needs, and sometimes waivers of some accessorial fees. The platforms have different fee options, which could include a monthly fee, or a per shipping label fee. Even paying fees, it can be cheaper to ship through the platforms than on your own, and it may simplify your shipping process.
Optimize your shipping contracts
The other option is to optimize the carrier contract and use an invoice auditing program. If you decide on sending the bulk of your parcels or LTL freight through one company, you’ll likely be able to negotiate better rates. You can certainly do this on your own with no expert help, but you likely won’t be getting the best rates you could get. Shippers tend to settle for a lower shipping discount than they might otherwise obtain with help from experts like those at Shipware.
Shipware has deep expertise from the carrier-side, as well as benchmarking data that shows what other businesses are paying for shipping services. Shipware can also delve into your shipping history to extract insights that may not be clear to your company when looking on your own. Having these details and coming up with a comprehensive negotiating strategy is key to successfully lowering shipping costs and getting a better contract with the carriers.
After gathering and analyzing company data and benchmarked data, Shipware works your company to determine where your efforts should go in optimizing your contract. Shipware clients tend to save up to 30% on their shipping costs as a result of this negotiating strategy, and we stay by your side in the years to come, to help fine tune carrier-mandated price increases or accessorial fee raises.
To learn more about how Shipware can help you lower your FedEx rates and capture invoice audit savings, call us at (858) 879-2020.