Shipping is one of the most critical pieces of your e-commerce business plan. It’s how you get the stock you need, move inventory between your warehouses, and fulfill customer orders.
That said, not all shipping services are created equal. The parcel shipping options that you offer your customers at checkout are probably not the ideal shipping partners for your bulk freight needs. Commercial shipping is often the simpler and more cost-effective shipping method when shipping to warehouses (regardless of whether they’re yours or your 3PL partners’) or to other businesses.
Sellercloud features integrations with all of the top domestic and international shipping providers to ensure that you always have access to the most reliable and cost-effective options for your parcel and business shipping needs.
The Differences Between Commercial Shipping and Parcel Shipping Matter
While you technically could use parcel shipping to transfer large volumes of merchandise to third-party fulfillment centers or between warehouses, it is far from the ideal solution. Commercial freight shipping is a much more cost-effective and efficient way to move inventory in bulk. The reasons lie in the differences between the two service types.
When to Use Commercial Shipping
- Heavy shipments – When shipping products or combinations of products that weigh over 150 pounds, commercial shipping is usually the only option. Furthermore, most parcel shipping providers begin assessing additional fees for products weighing more than 70 pounds. As such, commercial shipping is almost always more cost effective for overweight shipments.
- Large volume shipments –
For large, bulky, awkward volume shipments, commercial shipping typically provides better rates over parcel shipping. Most parcel shipping services have a hard cap on volume and maximum package length. Like with weight, there are upcharges and significant price increases that kick in long before packages reach these hard caps.
- Inventory that requires specialty loading/unloading – Commercial shipping companies have the equipment, personnel, and protocols in place to load and unload large, heavy, and/or delicate freight. While you may wind up paying for the service, parcel shipping providers are unlikely and unable to even provide you with the option.
- Palletized shipments – If your shipments are palletized and wrapped, commercial shipping is the best option. What’s more, by palletizing your inventory before shipment, you can almost always take advantage of significant commercial shipping cost savings.
- Shipping a container’s worth of inventory – Much like how the same volume of merchandise will ship for a lower cost when it is palletized, shipping a full container’s worth of goods can be a great option for enjoying bulk shipping discounts through a commercial provider.
When to Use Parcel Shipping
- Lightweight shipments – Any shipment with a total weight of under 70 pounds (or whatever weight marks the beginning of a carrier’s overweight upcharges) may be best suited for parcel shipping. You may want to at least assess the costs for any shipments under 150 pounds, but in all likelihood, commercial shipping will be the better value the greater the weight.
- Low-volume shipments – If your total shipping volume falls within your preferred parcel carrier’s girth and length thresholds, it may be worth comparing parcel shipping rates to commercial alternatives. As a rule, any bulk shipment that cannot be palletized should at least be considered for pallet shipping before making a final decision.
- Multiple destinations – Even if you are moving a lot of inventory, when there are multiple destinations, parcel shipping may be the best fit. Commercial shipping is perfect for moving a lot of products from point A to point B. However, the entire parcel shipping business model is centered around delivering individual packages to any and all addresses.
- Speed matters – Parcel shipping options are typically faster than commercial options. If you need to move merchandise or inventory and time is of the essence, parcel shipping may be the most reliable way to do so. What’s more, many parcel shipping providers offer services with guaranteed delivery times to provide extra assurance and peace of mind.
How to Get the Best Value When Shopping for Commercial Shipping Options
Just because commercial shipping may turn out to be a better value than parcel shipping for certain shipments, doesn’t mean that there aren’t further opportunities for savings. If you have decided commercial shipping is the right fit, there are several ways that you can help keep costs as low as possible.
- Compare rates – This is the most obvious starting point when evaluating potential commercial shipping providers. The terms and prices will naturally vary by carrier and their respective rate cards. Not only that, carriers’ shipping rates and speeds can fluctuate over time. This has been especially true in 2022.
Small price differences can lead to significant profit margin fluctuations when scale is taken into account. Even a difference of a few pennies per pound can make a meaningful impact on your bottom line.
As such, be sure to regularly revisit your commercial shipping rates compared to industry alternatives. Remaining flexible in your shipping options matters. The fact that Sellercloud makes it simple to utilize multiple shipping providers means that you have the flexibility to make profit-driven decisions in response to any changes in shipping costs.
- Packing optimization – Reducing waste and unnecessary packaging size can help lead to dramatic shipping cost savings for both commercial and parcel fulfillment. For this reason, optimizing your product packaging and shipment packing should be a priority.
- Consolidated shipping – Similar to packing optimization, consolidated shipping can reduce costs further. Any time you can ensure that a bulk shipment is large enough to either be palletized or fill an entire shipping container, you can almost guarantee significant savings. There are considerations associated with consolidated shipping you cannot overlook, though. Check out our full guide to reducing shipping costs with consolidated shipping.
Sellercloud’s omnichannel growth platform is the ideal partner for managing all of your e-commerce shipping needs. Contact us directly for a free demo and experience for yourself how our software and tools can help you consolidate and optimize workflows across your entire business.
