Logistics costs can account for up to 20% of an eCommerce company's total profits.
Naturally, businesses look for ways to reduce delivery expenses, and economy shipping often appears to be an attractive option.
However, it is crucial to be aware of its implications.
While this method can cut costs, it also leads to longer delivery times, which can be detrimental to your customers' experience.
In this article, you’ll learn everything you need to know about economy shipping: what it is, when to use it, and how to do it efficiently with the right eCommerce shipping plafotm.
What does economy shipping mean?
Economy shipping is the cheapest shipping method available, offered by most shipping companies, such as UPS, USPS, and FedEx.
It can be used for both national and international shipments. However, economy delivery is also the slowest option, making it suitable for those who wish to reduce shipping costs in exchange for slower delivery times.
Economy shipments are usually sent by land or sea, but the mode of transport doesn't always determine the cost. For instance, shipping by train can be more expensive than by truck. Keep this in mind when selecting a shipping method to avoid unexpected price increases.
So, in summary, some key points of the economy shipping method are:
- Offered by major carriers like UPS, USPS, and FedEx
- Extended delivery windows compared to faster options
- Cost may vary by transport mode (e.g., truck vs. train)
- Great for non-urgent shipments with flexible timelines
- Limited tracking updates in some cases
- Can be impacted by seasonal demand, possibly affecting speed
How long does economy shipping take and how much does it cost?
Economy shipping times and costs can vary widely based on delivery location, package weight, and item type. Here’s an overview of popular economy shipping options to provide a general idea of delivery times and starting costs.
UPS Economy Ground
- Best for: Businesses needing international options and competitive pricing.
- Delivery time: 1-5 business days
- Cost: Starts at $19.02 for a 3-pound package (NY to Miami)
- Pros: Multiple international options, tracking available, good transit times
- Cons: Can be more expensive than some options
FedEx Economy Ground
- Best for: Small businesses, online retailers shipping under 70 lbs.
- Delivery time: 2-7 business days
- Cost: Starts at $9.25 for a 3-pound package
- Pros: Cost-effective, tracking available
- Cons: Slower than some options
DHL Economy Select
- Best for: Shipments under 150 lbs needing tracking but don't require exact pricing upfront.
- Delivery time: 2-5 business days
- Cost: Pricing not readily available
- Pros: Tracking available
- Cons: No upfront pricing information available, slower than some options
USPS Economy Domestic
- Best for: Domestic shipments under 70 lbs and 130 inches total size.
- Delivery time: 1-3 business days
- Cost: Starts at $7.70
- Pros: Very affordable, fast domestic delivery, tracking available
- Cons: Weight and size limitations
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Is the economy shipment always the cheapest?
For individual users or small businesses scheduling shipments manually, economy shipping is often the most cost-effective choice. For example, a small Etsy shop selling handmade jewelry might find that economy shipping saves a few dollars per order compared to standard shipping. However, delivery times for standard and economy shipping may sometimes be similar, typically ranging from 3 to 5 days.
In contrast, large online retailers like Amazon or Walmart, which frequently ship high volumes of small, lightweight items to nearby customers, can sometimes negotiate standard shipping rates that are lower than economy rates. By shipping thousands of items daily, these companies leverage bulk shipping agreements and economies of scale, enabling them to secure competitive pricing with faster delivery times.
For smaller businesses, it’s beneficial to routinely compare shipping rates and, as volume grows, consider negotiating directly with carriers. For instance, a growing e-commerce store with 50–100 orders per week may find the cost difference between standard and economy shipping minimal, making it worthwhile to choose the faster option to enhance customer satisfaction.
When should eCommerce use economy shipping?
Economy shipping is an attractive option due to its cost-effectiveness, but it can put you at a disadvantage compared to your competitors if not used wisely. If your customers notice slower deliveries, they may choose other suppliers. Therefore, you should use economy shipping in situations where delivery speed will not affect your customers' purchasing decisions.
To offer affordable shipping without impacting customer satisfaction, consider absorbing some or all of the shipping costs. Reducing the shipping price for your customers or offering free shipping can be an effective strategy.
When is economy shipping not advisable?
Avoid using economy shipping for time-sensitive products, such as perishable items like food or plants. The same applies to urgent products like prescription drugs or essential spare parts. These items require faster delivery methods to ensure they reach customers in optimal condition and within the necessary timeframe.
When is economy shipping advisable?
- For New Businesses: If you are starting your eCommerce business and have a limited budget, economy shipping can help you save money as you grow.
- For Low-Value Products: Economy shipping is particularly useful for low-value products where the cost of shipping can significantly influence the customer's purchasing decision. Customers are unlikely to buy an item for a few euros if the shipping cost is higher than the product price.
- For Bulky or Heavy Products: This option is also suitable for bulky or heavy products, as standard shipping costs for these items can be high. Economy shipping can provide a more affordable solution.
Economy shipping for returns
You can use the economy shipping method for products that your customers return. Unless it's a product that needs to be restocked quickly, the return time should not affect the shopping experience, so it's a very effective way to reduce the cost of your returns. You can offer cost-effective shipping automatically from Outvio's returns portal.
Other important factors in economic deliveries
Does economy shipping have tracking?
Economy shipping is the most economical choice, but tracking may not be included to minimize costs, leaving you unaware of your package's location during transit. Shipping notifications are crucial for customer satisfaction and a positive shopping experience. We recommend using Outvio's customisable notification system to ensure a first-class delivery experience.
How does economy shipping differ from standard shipping?
It is a matter of cost and time. Standard shipping falls somewhere in between economy and express shipping.
What is the difference between economy and ground shipping
Economy shipping may include several methods of transport, while ground shipping specifies that the shipment is exclusively by land.
What is the difference between economy and express shipping
Economy shipping is usually slower but cheaper, while express shipping is faster but can be more expensive.
How to achieve a more cost-effective shipping operation
With Outvio, streamlining the cost of your shipments becomes effortless. By integrating your carriers and implementing allocation rules, the platform consistently selects the most economical shipping option for every scenario. No longer do you need to manually compare rates to find the best deal; Outvio ensures the most affordable shipping rates available.
Furthermore, you'll expand your service offerings to customers, enhancing your ability to meet consumer expectations and drive conversion rates.
Outvio isn't just about automating cost-effective shipping. It's an eCommerce software solution that streamlines your entire operation, from logistics to returns.
The software also boasts features designed to optimize your logistical processes, including automated fulfillment and returns, as well as tracking services and customer support functionalities.
