3 Tricks to Reduce Subscription Box Shipping Cost

Virginia Miller

July 21, 2024

In this article

Shipping is one of the most critical parts of any subscription business because it is factored directly into the cost of goods sold. There are three ways to ship subscription boxes for less, and each provides a different experience for the customers.‍

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Tips for Reducing Shipping Costs for Subscription Boxes

Shipping costs can greatly impact the profitability of a subscription box business. Here are some effective tips for reducing those costs while still providing a good experience for customers.

Use Cubic Pricing

Cubic pricing allows you to ship packages based on volume rather than weight. To qualify, packages must weigh less than 20 lbs and take up less than 0.5 cubic feet of space. To calculate cubic feet: Length x Width x Height / 1728. This formula determines which cubic pricing tier the package falls into.

Fulfillment centers can negotiate discounted cubic rates with major carriers since they ship high volumes. Work with a fulfillment partner to leverage these discounts and reduce your shipping spend.

Leverage USPS SurePost

USPS SurePost is a great budget shipping option. UPS handles the long distance transportation and USPS does the final delivery. This reduces costs since final mile delivery is the most expensive leg.

The hand off between carriers can increase transit time by 1-2 days, but for cost conscious subscription box brands, that's an acceptable tradeoff.

Outsource Fulfillment

Fulfillment centers receive steep discounts on shipping supplies and rates since they move so much volume. This includes boxes, tape, labels, and carrier discounts. They also have optimized processes to keep labor costs low.

By outsourcing your fulfillment rather than doing it in house, you gain instant access to all those cost savings and discounts that you likely can't match on your own.

Carrier Evaluation

When evaluating shipping carriers, look at these key aspects:

Cost - What are the rates for your most common package sizes and zones?
Reliability - What is the on-time delivery rate?
Deliverability - What zip codes and addresses can they deliver to?
Tracking - How easy is it to track packages and look up info online?

Choosing the right carrier for your business can ensure reliable, on-time delivery that keeps your customers happy.

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Next article: How to Ship Subscription Boxes Cheaper

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FAQs

What is cubic pricing and how does it reduce costs?

Cubic pricing allows you to ship packages based on volume (length x width x height) rather than weight. This is cheaper for light, bulky items. Fulfillment centers can get deep cubic shipping discounts.

How can USPS SurePost save me money?

USPS SurePost splits shipping between UPS and USPS to reduce costs. UPS handles long haul transport then hands off to USPS for last mile. This leverages the strengths of both carriers.

Why should I outsource to a fulfillment center?

Fulfillment centers get steep discounts on shipping supplies and carrier rates due to their high volumes. Outsourcing gets you instant access to those savings vs trying to negotiate on your own.

What shipping carriers are best for subscription boxes?

Evaluate carriers on cost, reliability, deliverability to your target areas, and ease of tracking. Balance cost savings with customer experience.

How can I get discounted packaging and supplies?

Fulfillment centers buy packaging at wholesale rates and can pass those savings to clients. Work with a fulfillment partner to access discounted mailers, boxes, etc.

Should I use USPS or UPS?

USPS tends to have the lowest rates for light packages under 1 lb while UPS Ground is very affordable for heavier subscription boxes. Offer both to maximize savings.

What are zone based shipping rates?

All carriers have pre-set rates for different zones based on distance to destination. Compare zone rates as part of carrier analysis to optimize costs.

Can I negotiate custom rates as a small business?

Once you hit certain volume thresholds you can negotiate custom discounts. Leverage a fulfillment center early on to access their negotiated rates.

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