For ecommerce retailers to remain profitable, it’s crucial to have a good understanding of how dimensional weight and shipping zones work when it comes to order fulfillment and delivery.
What is Dimensional Weight?
The general idea behind dimensional weight (dim weight) is shippers (in this case, the ecommerce merchants) pay for the space their packages take up on a truck, rather than the physical weight of the package that is large or bulky, yet low in weight. A good example of this is something like toilet paper. While the weight of a 24-count package of toilet paper rolls is minimal, the package takes up a large amount of space in a delivery truck.
Let’s go back to geometry for a bit. Dim weight is essentially cubic area. It is calculated by multiplying a package’s length, width, and height then dividing the cubic size by a dim divisor (which varies by carrier). If the calculated dimensional weight is higher than the physical weight of a package, you’re required to pay the higher of the two.
What are Shipping Zones?
The other high shipping cost is shipping zones, which are geographical areas that carriers transport products to. For domestic shipments in the US, zones span from Zone 1 to Zone 8. Zones are used by carriers to determine the distance a product travels from the point of origin (located in Zone 1) to the destination. The destination zone number depends on the distance from the point of origin, Zone 8 being the farthest distance. The less zones you ship through, the lower cost! It’s cheaper to ship from Zone 1 to Zone 3, than to Zone 5.
Ways to Reduce Your Shipping Costs
With different box types, carriers, shipping integrations and service levels, there are various aspects of shipping you can modify to cut costs. When it comes to shipping rates, saving even just a few cents on each package can make a big impact on your bottom line. Below are some tips to help you get the most savings on your shipments:
Reduce Package Weight
Package weight is a big factor when it comes to shipping costs. To reduce package weight, use lightweight packaging materials whenever possible. Keep in mind, when transporting a product that weighs less than a pound, carriers often will charge the package by the ounce. However, if a shipment weighs over a pound, the package weight will be rounded up to the next full pound to determine charges.
Reducing package size can decrease total dimensional weight. Be sure to utilize the best fit shipping box for your packages. Consider creating custom boxes for best-sellers to fit product perfectly and reduce unnecessary packaging and wasted space (especially for odd-shaped products).
When working with a 3PL or fulfilment partner, they will standardize the shipping materials and boxes used to optimize your package’s final weight and reduce cost.
Store Packages in Multiple Locations
Shipping rates are determined by the distance your packages travel. The more shipping zones your package must cross to get to its destination, the higher the shipping cost. By cutting the number of zones your package travels, you can dramatically reduce the total shipping cost. To do this, you must leverage multiple fulfilment warehouses in strategic locations.
Determine where your packages are most often delivered and leverage nearby warehouse space. For example, a large customer base in the west coast will benefit from warehouse space in California or Nevada, where you can then leverage regional carriers to deliver orders locally, and more affordably.
Cutting your shipping costs requires more than just knowing shipping options. It requires determining the best option for every single package. Understanding the different elements of fulfilment and delivery, such as dimensional weight and zones, will help you optimize your packaging and shipping strategy to reduce transit, delivery time, and shipping costs.