Accounting & Finance
Which Shipping Carrier Should Your Startup Use?
The average small business spends over $4,000 per year on postage. Those who have less than 10 employees average about $239 per month. While those employing 20+ people spend over $1,000 per month.
As a startup, it’s important for you to find the best shipping rates to reduce your overhead costs.
Read on to compare the main shipping carrier options for your startup business.
United States Postal Service
The United States Postal Service (USPS) is the least expensive option if you are sending items that weigh less than two pounds.
USPS has three options you can choose from.
First Class Mail arrives within 2-5 business days. Priority Mail arrives within 2-3 business days. Express Mail arrives in 1 – 2 business days depending on location.
If you are sending lightweight packages under two pounds, this is the best choice for your startup. If you send parcels that weigh more than two pounds but can fit in a priority mail flat rate box, go for it.
The flat rate box means that the cost stays the same regardless of how much the box weighs.
One of the benefits of USPS is that it will deliver to PO boxes and mailboxes. The other shipping services only deliver to the doorstep.
You may prefer your items to go to your customer’s mailbox. If so, USPS is the way to go.
UPS shipping rates are higher than USPS most of the time. Yet, UPS lets you negotiate for lower rates if you ship many parcels. As a startup, you might be able to work out a good deal this way.
If your package is heavier than three pounds, UPS can be cheaper than USPS.
One of the benefits of UPS is that they offer multiple shipping options including two-day, three-day and next day delivery.
UPS is one of the most reliable shipping carriers. You can track your package easily online. And the majority of the time, it will arrive on time.
Now let’s compare the merits of UPS vs. USPS.
UPS vs USPS
One of the things that UPS offers is guaranteed delivery. Keeping your customers happy is one of the most important steps to startup success.
UPS has excellent customer service if you need to reach them.
USPS on the other hand, (not counting Express Mail) doesn’t guarantee the delivery date. So you can’t predict when your customer will get their package.
Packages can get delayed and arrive weeks later. This isn’t great for building trust with your customers.
Also, the USPS doesn’t have the best customer service. And their tracking service is unhelpful. Many times the tracking doesn’t show up until after the package has arrived.
Yet, USPS offers the most budget-friendly express delivery. But, it will always take two days to get to remote locations.
USPS is undoubtedly the cheapest option for light parcels, but the price for heavy packages can be high. UPS might be able to deliver heavier packages for a lower price and get it there quicker, too.
One thing to note is that UPS charges a fee to deliver on Saturday. The other carriers don’t. This could slow down your shipment by an extra two days.
If you choose to use UPS, you’ll have to weigh the pros and cons of paying for Saturday delivery versus delaying your package the entire weekend.
Many people wonder, which is better, UPS or FedEx? The truth is that they have a lot in common.
Both have excellent tracking and reliable shipping dates. They both offer detailed tracking information. Both let you negotiate for a better price if you send a high volume of shipments.
FedEx offers a 15% discount for customers who sign up for an account.
FedEx is a great option price-wise if you are sending packages heavier than three pounds.
FedEx vs UPS
FedEx vs UPS does have the advantage of a comprehensive tracking system. The delivery manager feature lets you hold packages at a FedEx location or schedule a delivery for a specific time.
Unlike UPS, FedEx includes Saturday deliveries as part of their routine services. You don’t have to pay extra for this. But with UPS you do.
Both FedEx and UPS offer a pickup service so your customers can pick up their parcel at a FedEx location. However, there is a fee for this service.
Another factor to consider when choosing between FedEx vs UPS is the location of a shipping center near you.
UPS has over 5000 stores around the world plus additional drop boxes and authorized dealers. FedEx boasts only 1900 in the US. Yet FedEx plans to add 500 stores to WalMart locations this year.
Chances are that there is both a FedEx and UPS location in your area. It’s likely that the UPS location will be more convenient. Keep that in mind as you make your decision about which carrier to use.
UPS vs FedEx vs USPS – Choosing a Shipping Carrier
As you can see, there are merits to each of these shipping carriers.
The best shipping rates will depend on how many packages you are sending, their weight and how quickly you need them there.
Of course, as a startup, you need to keep shipping costs down as much as possible. This means that you will likely use more than one shipping carrier for your business needs.
When you don’t limit yourself to one provider, you can offer your customers the fastest, most affordable delivery services out there.
Next, learn how to drive your startup to success.