In many ways, shipping is the crux of a successful operation for DTC brands. It can make or break the customer experience, shrink or grow profit margins, and attract or repel customers at checkout. So it’s important to get it right. Nevertheless, something so pivotal to success is extremely complicated. Should I offer economy shipping? Standard shipping? What’s the difference? All great questions. Read on to understand what type of shipping your ecommerce business should use—especially if you’re weighing economy vs. standard shipping.
If you’ve been pulling your hair out trying to understand the difference between standard and economy shipping, you’re not alone. They’re the two most common methods of parcel shipping, and the terms are often used interchangeably. Not to mention, most shipping carriers have branded monikers for each of their shipping methods, further complicating the issue.
Put simply, the difference between economy vs. standard shipping is the delivery window: economy shipping is slightly cheaper, but takes slightly longer. Domestically, there is only a small difference between the shipping methods, but when shipping internationally, the difference is more notable.
Economy shipping, as the name suggests, is the most affordable method of shipping. The trade-off is that with lower costs comes longer delivery times when compared to priority mail or other premium shipping methods. We’ll get into why you may want to consider economy shipping for your business, but for now, know that it’s a convenient method of shipping because most major delivery companies offer it, including:
Generally, it takes between 2-7business days for an economy-shipped package to arrive when sent within the United States.
But let’s get more specific. Below, we’ve outlined the time, cost, and size requirements (if publicly available) for economy shipping through various shipping carriers:
Of course, this is a high-level view of economy shipping, but let’s move on to standard shipping before we dive deeper into which is best for your business.
While some carriers may offer a standard shipping option that will arrive a day faster (on average), the cost increase rarely offsets this benefit. On the other hand, the difference between economy and standard shipping is noticeable when shipping internationally.
UPS offers a service called “Worldwide Economy” where they tier out their economy and standard shipping rates for international deliveries. In this situation, you may be able to shave off several days of transit with standard shipping which could make a difference for your customers.
Figuring out what’s best for your business is something of a double-edged sword. If you’re looking to offer free shipping, you may want to consider the cheapest option, as you’ll be eating the costs; but that means customers will have to wait longer to receive their purchase. On the other hand, you may want to get your products delivered to customers quickly, but that means you may have to pass on some of those shipping costs to your customers.
So what should you do?
The answer is unique to your business—as so many are. Balancing customer needs and expectations with revenue and out-of-pocket costs is never easy and always necessary.
There are two main things you should consider when determining if economy shipping or standard shipping is better for your business:
DTC ecommerce is under a lot of pressure to deliver orders accurately and quickly. Amazon has set the pace for delivery times and customers have quickly come to expect packages to arrive faster than ever. That being said, the proximity of your fulfillment center to your customers can make a huge difference.
Picture it: your fulfillment center is located in Los Angeles, CA but the bulk of your customers are on the East Coast. Shipping products across this many shipping zones is really going to add up fast.
In this situation, many ecommerce companies will opt to employ a multi-warehouse shipping strategy so they can fulfill and ship orders from the location closest to their customers. In other words, if you have a fulfillment center in LA and another in Chicago, you can greatly reduce your costs by delivering products across fewer shipping zones.
If you have multiple warehouses in strategic locations, you may be able to opt for a cheap economy shipping method while still meeting your customers’ delivery expectations.
When considering which shipping options are best for you, you’ll need to evaluate the size of your product. Many of the most popular shipping services determine the cost of shipment by dimensional weight.
Shipping carriers set a standard retail DIM factor, and this divisor is negotiated per account. Public, non-commercial retail rates typically range from 139-166.
Commercial, negotiated dimensional divisors with carriers can reach into the 200s, meaning the larger the divisor, the lower the rated weight. A higher dimensional divisor is preferable.
While some carriers like FedEx, UPS, and DHL calculate dimensional weight on most shipping methods, USPS typically only calculates DIM weight for domestic packages measuring more than 1 cubic foot—packages smaller than this are only charged based on actual weight. If the package is larger than 1 cubic foot or sent internationally, USPS charges by either actual or DIM weight, whichever is greater. USPS also caps DIM weight at 70 lbs.
It may sound complicated, but if your product is really heavy (but small) you may want to go with a different method than someone whose product is really light (but long).
As you can see, the difference between economy and standard shipping is relatively small—unless you’re considering international shipping.
That said, there’s still a lot to consider when selecting a shipping method that supports your business and pleases your customers. At Airhouse, we offer something called Carrier-Calculated Checkout Rates which grants Airhouse customers the ability to customize the shipping options they provide at checkout (carrier and method), so you don’t have to choose.
What’s more, we offer a Shipping Rate Estimator that allows customers to estimate shipping costs for a single shipment based on the shipment’s destination (zip code), dimensions, and weight. Gone are the days when you cross your fingers and hope for the best-case scenario.
If you’re interested in how Airhouse can simplify your shipping methods, chat with one of our fulfillment experts today.
