There’s nothing more satisfying than getting your ecommerce business set up and generating your first sale. Once the sales and revenue keep coming, you begin to think of yourself as an entrepreneur.
Setting up an ecommerce store isn’t as hard as it probably was earlier. With platforms such as Shopify, WooCommerce, BigCommerce, and others, you are given all the technical support you need to get your ecommerce store up and ready.
You can also hunt for ideas on stuff to sell and select products you like or are more suited to your ecommerce intentions and resources. But for the sales and revenue to keep coming in, you need efficient delivery of the merchandise to your customers. That’s where you build trust and goodwill.
And I’ll be frank: it’s not easy to choose carriers.
Choosing the right carrier is probably one of the most complicated tasks for ecommerce business owners. It’s a difficult choice because there are many carrier options out there. However, the United States Postal Services (USPS) and UPS (United Parcel Service) are two of the major and most reliable carriers in the United States.
Apparently, selecting the right carrier can help you raise your profit by 30% to 40%. This means that you really need to devote serious attention to ensure you pick a carrier that’s more suited to the kind of stuff you’re selling and the scale of the business you’re running.
You obviously need to pick one that offers the right blend of efficiency and cost-effectiveness.
A Random Comparison of USPS and UPS
When it comes to shipping stuff weighing less than 2 pounds, you’ll find USPS cheaper than UPS. If your item weighs really close to 2 pounds, USPS loses its price advantage since you can get great discounts when you negotiate with UPS.
USPS is really advantageous when you have a package below 13 oz of weight. It’s cost-effective, even when you mail it through First Class Mail.
There are specific advantages for each of these carriers though they may not be very obvious. They have deployed strategies to ensure customer satisfaction by meeting the needs and expectations of buyers and sellers. Both these carriers are over 100 years old, but they’ve managed to successfully adapt themselves to the exacting demands of ecommerce businesses.
An example is the 1-3 day Priority Mail feature of USPS. UPS offers ground solutions that are competitively priced. It also offers the SurePost service for better final package delivery to residences buying stuff online. With each carrier leaving no stone unturned, it is hard to pick out a winner.
So I dug in deeper to see where each carrier wins:
USPS is Cost-effective and Ideal for Small Packages
There are always preconceptions and misconceptions in people’s minds regarding carriers. One such idea is that USPS isn’t quite appropriate for businesses. This is because of its association with holiday cards and bills.
However, this isn’t entirely true. USPS has significantly improved its ecommerce services. As a result, they’ve focused on offering low prices for items of lighter weight since these are the ones most often ordered from ecommerce stores.
You’ll actually find USPS to be the cheapest delivery service out there for any package weighing less than 2 pounds. And, there really is no comparison in the case of packages weighing below 13 oz, since most other carriers have their rates starting from 1 pound or 16 oz.
USPS offers First Class Mail for packages weighing up to 13 oz, beginning with .93 if an online shipping solution is selected.
It’s true that USPS has been focusing on ensuring it is a low-cost carrier. But now they have also worked to improve delivery times. Their Priority Mail has succeeded in improving efficiency. It enabled USPS to provide estimates of delivery dates based on time zones.
It is also competitive with its flat rate boxes as well as the regional rate boxes offered for heavier packages.
But where you really experience the advantage of USPS is in the cost. USPS does not add surcharges with the base price for residential delivery. This can be seen in the examples given below.
(Time to put on your math hats)
Business to Customer (B2C) Shipments Rates from January 22, 2017
- For a 12x10x6 package weighing 2 pounds, USPS charges $10.28 which is also the base charge. This is for an 8-zone transit in the United States. For a package of similar size and weight across 8 zones, UPS has a base charge of $13.10 plus a fuel surcharge of $0.69 and a residential surcharge of $3.40 taking the total cost to $17.19. There’s no doubt which is the most cost-effective option here. FYI, FedEx charges even more.
- For an 8x8x8 package of a weight of 2 pounds across 6 zones, USPS charges $9.19 which is the base and the final charge. UPS has a base charge of $11.17 plus a fuel surcharge of $0.59 and a residential surcharge of $3.40, taking the total cost to a whopping $15.16.
- For a package of the size of 24x12x12 on a four-zone transit and weighing 8 pounds, USPS charges $10.97 while UPS charges $19.80 including the fuel surcharge and the residential surcharge.
So when you’re selecting carriers, make sure you realize what the overall cost is for the delivery and not just the base cost. USPS only charges the base cost. It also provides free Saturday delivery and package pickup.
UPS is the Preferred Choice for Ecommerce Businesses
There’s no hiding the fact that UPS is considered the leader in the package delivery industry. It has the distinction of delivering more packages ordered online than any other carrier in the United States.
If you have many packages weighing 21 pounds or above, UPS would be the ideal solution.
And guess what: the rates aren’t fixed.
You can always negotiate them with your Account Manager. You could get discounted rates, depending on your volume of delivery.
Make sure you compare the finalized prices with that of USPS because UPS has surcharges that are added to the base price. These things must be discussed with UPS’ Account Manager.
But while there may be more cost involved than USPS, you can be sure that the delivery time won’t be missed. Time-bound packages need to, therefore, be delivered through UPS. It also offers innovative tracking methods. Customers are offered text messages that provide package updates. UPS doesn’t offer any free package pickup service though.
I’ll show you how to select your carrier
It all depends on what your shipments are. There are factors such as:
- Average weight of orders
- Maximum and minimum weight of the orders
- Types of boxes used for packaging
- Size of the merchandise
And, of course, distance plays a major part too. For lightweight items, the right option could be USPS First Class. As we mentioned before, the cost-effective services offered by USPS are ideal if you want to send merchandise that isn’t time-bound.
There are also cheap services offered by UPS, with its aforementioned SurePost service. Again, this is great for inexpensive packages that are not time-bound. The bottom-line is that items that are delicate, precious and time-bound need to be sent through UPS.
Here, the satisfaction of your customers matters more and can benefit your ecommerce business better than the cost savings that you could gain from cheaper schemes by UPS and USPS that cannot always ensure timely delivery.
What are the Pros of USPS?
- Most ecommerce store owners agree that for lightweight packages weighing up to two pounds, the US Postal Service is the right option. It can help you save a lot. UPS isn’t really interested in competing with USPS in this category. So if you are delivering stuff like face creams, shampoos, other cosmetics or skin care products, it would be more profitable and efficient to use the government-run USPS delivery service.
- If you’re sending stuff internationally, UPS is a better option since you can count on its reliable delivery. You don’t want to take any risks with international deliveries. There’s greater accountability with UPS when it comes to accuracy of the delivery.
- For the large stuff, UPS is always better since the cost savings that you enjoyed for the smaller items via USPS is more or less leveled up in heavier items. The one exception is if you’re sending liquids or jelly items where USPS charges you based on the volume of the item rather than the weight. This can help you save more. The flat rate boxes USPS offers are an added advantage too. Here too, the weight doesn’t add up to cost you big.
Cons of USPS
USPS needs to build up a reputation. It has some catching up to do is in its reputation for reliability. As you know, reputation once tarnished takes time and a good deal of effort to set right.
But USPS has been working at it, and it has made significant improvements in the past 3 years. It has improved its point-to-point tracking and has gone to great lengths to understand the needs of online sellers.
But if you’re sending packages that are time-sensitive, those that absolutely need to reach your customer in the stipulated time such as overnight, you should choose UPS since USPS does not always guarantee short delivery times.
Their practice is to refund the postage if they fail to send the package on time. But a claims process is not what ecommerce businesses have time for, and when they are looking to exceed the expectations of their customers and build their reputation it is wiser to use UPS for time-bound deliveries.
Pros of UPS
You can’t deny the fact that UPS is the preferred carrier in the ecommerce world. Why? It’s about perfection, and the perception of perfection the company projects. However, it isn’t all about perception alone.
For one, UPS tracks just about everything with its GPS systems so you can know exactly where your product is during transit. Its packages and trucks are GPS-enabled. Aspects such as when the driver turned the engine off in the truck, how long the driver was off the truck, etc are all recorded.
All that advanced technology helps add to the accountability. Drivers are also graded on the basis of their efficiency. So when you have really important, large and really expensive merchandise to send you’ll have the assurance that the stuff will reach your customer right on time.
With any delivery service, the ultimate price you have to pay and the discounts come with a good deal of negotiation. Since the rates at UPS are more expensive than at USPS, you can get great discounts with negotiation. All you need to do is call UPS and describe your requirements persuasively to the Account Manager, and you could get good discounts.
Cons of UPS
It is more expensive than the government-run USPS. If your ecommerce business deals with smaller items, particularly those below 2 pounds, and you don’t have time-bound packages to send to your customers, you can’t be enticed to try out UPS. Moreover, it has surcharges and extra expenses added to the base price.
As you’ve seen, the advantages far outweigh the disadvantages for UPS. Choosing your carrier really depends on the scale of operation of your ecommerce business and the nature of the products it deals with.
Small and medium-size businesses really need to save costs, which makes USPS a good choice. Customer satisfaction is important at this stage too, since that’s what builds up a reputation and increases your business.
As you keep growing and you wish to exceed customer expectations, you’ll inevitably head the UPS way. It may be more expensive and have surcharges added to the base price, but, as mentioned before, you can always negotiate the price for delivery.
And always remember: make no compromise on efficiency.
Have any thoughts on UPS or USPS? Share them in the comments below!
Feature image by Harry Rundle