How to reduce shipping costs in e-commerce?

Shipping costs often represent a significant share of an e-commerce business’s expenses. Whether you ship a few orders per month or several thousand, every parcel can eat into your margins if your logistics choices are not properly optimised.

The good news is that there are practical, proven strategies to reduce shipping costs while maintaining an excellent customer experience.

In this article, we review what really works for small, medium and large shipping volumes. You’ll discover concrete tips and key metrics to track in order to keep your shipping costs under control.

Even with low shipping volumes, a few mistakes can be costly. “Small” e-commerce businesses need simple solutions that are quick to implement, without complex negotiations.

1. Choose the right carrier at the time of shipment

Quickly comparing carriers based on price, delivery times and delivery options (home delivery, pick-up points) allows you to select the most suitable solution for each parcel. The right choice can reduce costs, prevent returns and improve customer satisfaction.

National carriers: reliable for local and regional deliveries, with short lead times and competitive pricing. Easier to contact in case of issues (delays, lost parcels).

International carriers: essential for selling abroad, including cross-border EU and non-EU destinations, with expertise in customs formalities for shipments outside the EU and services adapted to each country (fast delivery, accurate tracking).

Practical tip: even with just 20 parcels per month, having at least one national carrier and one international carrier allows you to compare and choose the best option for each order.

2. Optimise parcel size and weight

Shipping costs depend not only on actual weight, but also on volumetric (DIM) weight. Carriers charge based on whichever is higher: the actual weight or the weight calculated from the parcel’s volume. In other words, a light but bulky parcel can cost far more than expected.

What you can do:

• Standardise 2 to 3 packaging formats for all your products to limit variation and avoid excess volume.
• Use modular inserts to protect products without oversized boxes.
• Check dimensions before shipping to anticipate volumetric weight and avoid extra charges.

Example: A 500 g product shipped in a 30×30×30 cm box may be billed at a much higher equivalent weight, whereas the same product in a 25×20×10 cm box will be far cheaper to ship. The exact difference depends on the carrier and destination, but the logic is always the same: the larger the box relative to the product, the higher the cost.

✨ This simple optimisation is often one of the fastest ways to reduce shipping costs, especially as volumes start to grow.

3. Limit address and customs documentation errors

Even at low volumes, an incorrect address or an incorrectly completed HS code can lead to:

• returns,
• additional fees,
• customs holds for international shipments outside the EU.

Solution: For a parcel shipped to the United States, an incomplete HS code (6 or 8 digits) may be considered insufficiently precise and trigger an inspection or a hold. Using the correct 10-digit code from the start makes customs clearance smoother and avoids unexpected costs. To learn more and fully master HS codes, read our in-depth article on HS codes.

4. Favour pick-up points

Pick-up point deliveries are generally cheaper than home delivery and reduce failed deliveries.

Pick-up point delivery is common across Europe, but usage and customer expectations vary significantly by country, depending on local locker networks, relay coverage and consumer habits.

Even with just 20 parcels per month, this option can generate meaningful savings if you track the right indicators.

With higher volumes, savings become more visible. It’s no longer enough to check each parcel individually: you need to structure your flows and automate certain tasks.

1. Compare and segment carriers

Identify each carrier’s strengths: small parcels, express, international. Smart allocation of parcels based on cost and delivery time helps optimise margins.

2. Standardise packaging and processes

Reducing the number of formats lowers DIM weight, speeds up preparation and reduces errors. In most cases, 3 to 5 formats cover around 80% of orders.

3. Monitor additional costs

Beyond the listed price per parcel, you need to anticipate:

• address correction fees,
• returns or non-standard parcels,
• customs errors for shipments outside the EU.

4. Start negotiating your rates

Even medium volumes can justify adjustments:

• weight-band pricing,
• conditions for frequent destinations,
• discounts on specific services.

5. Automate documentation and tracking

• Automatic generation of invoices and customs documents
• Tracking of addresses, weights, HS codes and declared values
• Parcel tracking to quickly detect anomalies and resolve incidents before they become real issues

Concrete example: an e-commerce business shipping 1,500 parcels per month can reduce its costs by 10 to 15% simply by automating label creation and segmenting carriers by destination, while detecting and resolving incidents faster.

For large e-commerce businesses, every euro matters and every process can have a major impact. A data-driven, strategic approach is essential.

1. Fine-grained flow segmentation

• Geographical zones, product types, expected delivery times.
• Smart routing = lower costs + increased reliability.

2. Full control of carrier contracts

Structural discounts, surcharge conditions, SLA* penalties (*Service Level Agreements: contractual compensations when a carrier fails to meet its commitments).

Continuous optimisation based on product mix and destinations.

3. Optimise logistics and packaging

• Industrial standardisation of formats
• Modular inserts to reduce DIM weight
• Full automation of picking, packing and shipping label printing

4. Anticipate returns and errors

• Automatic validation of addresses and documents
• Analysis of returns to fix recurring issues

Dashboards to track: average cost per parcel, carrier performance, actual delivery times, successful delivery rate, number of returned parcels and most-used services

5. Use data to adjust your strategy

• Identify the most efficient carriers by destination
• Adjust packaging based on return trends
• Manage seasonal volumes to avoid extra costs

Tip: a well-managed large volume operation can reduce costs by up to 10–30%* through the combination of segmentation, automation and data analysis.

• Average cost per parcel
• Carrier performance
• Actual delivery times
• Successful delivery rate

Even small volumes can gain significant value from tracking these metrics to adjust packaging, carrier selection and fulfilment processes. These indicators enable informed decisions and help plan logistics growth and we’re happy to provide them with ParcelRush.

A progressive and sustainable approach

Reducing shipping costs is not about a “magic trick”, but about a gradual approach adapted to each volume:

Small volumes → avoid errors and automate documents

Medium volumes → structure, segment and start negotiating

Large volumes → manage, optimise and leverage data

Practical advice: start tracking your key indicators, even if you have a small number of orders. Every optimisation, no matter how simple, can help reduce your shipping costs noticeably. Results will vary depending on your order volume, process efficiency, and how your parcels are prepared and shipped.

Focus on what really matters

This progressive approach is exactly what ParcelRush supports: from your very first parcel to a logistics setup that keeps pace with you and grows alongside your business.

In e-commerce, every minute counts. By simplifying the preparation and shipping of your parcels, you free up time to focus on what truly drives your business forward.

(*Based on field observations and trends observed across various e-commerce merchants. Results may vary depending on order volume, process efficiency, packaging type, and optimisations already in place.)