Behind the Box

How Shipping with Custom-Sized Boxes Can Save Your Company Thousands of Dollars

7 Jun 2017

How Custom-Sized Boxes Can Save You Thousands of Dollars in Shipping Costs

Are you paying good money to ship air and foam peanuts to your customers?

Unless you’re using custom-sized boxes, the unfortunate answer is a big fat yes.

These days, custom packaging is so much more than a physical expression of your brand. Of course, great packaging can get customers excited about what’s inside and create share-worthy unboxing experiences, but custom-sized packaging is also an opportunity to save you thousands of dollars in shipping fees.

What’s the Cost of NOT Using Custom-Sized Boxes?

Now that most major carriers use ‘dimensional weight’ (DIM) pricing, shipping fees are calculated based on package volume, rather than just weight. This prevents delivery trucks from filling up without maxing out their weight capacity (which reduces profit per truckload), but can make shipping more costly for retailers.

DIM pricing means that anytime you use an oversized box (maybe because your product isn’t a standard size), you could be paying a premium for that wasted space.

If you’ve noticed a major hike in shipping costs this year, you’re not alone. Dimensional weight fees went up in January 2017 when most carriers reduced the DIM factor from 166 to 139. This might sound alright at first, but this change resulted in a 20% higher DIM weight.

When the DIM factor went down, shipping costs went up – especially for retailers shipping light cargo in oversized boxes. Here’s why:

Dimensional Weight is calculated by multiplying the dimensions of the box and dividing by a standard DIM factor

As you can see, custom packaging is no longer just a nice way to upgrade your customer experience – it’s a cost-saving measure with long-term benefits for your business.

A Tale of Two Retailers

Let’s take a look at how ecommerce retailers can use custom-sized boxes can save on shipping.

Meet Devin. He runs a successful Shopify store selling jewelry, watches, prints, and decal stickers. Business is booming, his customers are happy, and he’s making around $5,000 in sales every month. Not bad, right?

Since Devin’s products are a range of different sizes, he uses a bigger box than necessary for most of his shipments. To prevent damage during delivery, he stuffs each box with foam peanuts. He knows it’s not a perfect solution, but it does the trick.

But something’s wrong with this picture.

Devin’s average shipment weighs less than five pounds but, thanks to DIM pricing, his shipping costs are based on the size of his boxes. If Devin uses a 12” x 12” x 14” box, his billable weight is nearly 15 pounds!

Here’s how the math works out:

(12 x 12 x 14) / 139 = 14.5 pounds

Since DIM weight is rounded up to the nearest pound, Devin is billed as though he were shipping a fifteen-pound box instead of five.

While a different retailer might get optimal value from a box this size, Devin is paying to ship 300% more volume than he needs, simply because he doesn’t have custom-sized packaging.

So, what does this actually cost the poor guy?

Depending on where he’s shipping to and from, Devin could be paying between $3 to $8 in extra fees per package. If he ships around 100 boxes every month, that adds up to $3,600 to $9,600 over the course of a year! We’re not talking about small change here.

On top of that, Devin’s packaging costs are higher than necessary. Not only is he paying more for oversized boxes, he’s also buying extra foam peanuts to fill up the space.

Your package's dimensional weight is calculated based on the size of the box--even if it's only partially full.

Now, let’s meet Laura. She runs a very similar ecommerce business. She sells all kinds of jewelry, her buyers leave positive reviews, and she’s also shipping about $5,000 worth of products each month. But even though Laura earns the same revenue than Devin, she walks away from every sale with more cash in her pocket.

That’s because Laura delivers her jewelry in custom-sized boxes that are tailored to perfectly fit her shipping needs. She stills pays to deliver bracelets and earrings to her customers, but – unlike Devin – she doesn’t pay extra to deliver foam peanuts.

Since making the switch to custom packaging, Laura has saved an average of $5 in shipping costs per delivery. She also ships 100 units every month, which adds up to savings of $6,000 in one year.

Two retailers with the same products and the same amount of revenue will save nearly $10,000 per year by shipping in custom-sized boxes versus standard sizes.Custom-Sized Packaging Means Safe Delivery + Happy Customers

Reduced shipping fees aren’t the only reason to switch to custom packaging. There are also intrinsic benefits to custom boxes, such as memorability and brand recognition – but that’s a topic for another day.

Switching to custom packaging allows you to save money by keeping your products and reputation safe at every stage of delivery. Optimal sizing provides your business with three important benefits:

1. Safe Passage in Stormy Weather

Custom-sized packaging can save you money by minimizing the risk of products getting damaged during delivery. Extra space in oversized boxes leaves rooms for your fragile goods to get jostled around on their journey, which means they might arrive in less than perfect condition. Not cool.

On the other hand, custom-sized boxes keep your items secure, so you can feel confident that they’ll reach their destination in one piece.

2. Protection Against Unforeseen Costs

Another consideration is that quality custom-sized boxes prevent items from creating bulges in the packaging if they get shifted around or warped in transit. This can be an issue for retailers that try to squish larger items into the wrong size box. Not only does this put your items at risk, it could lead to sudden hikes in your shipping fees if they box shape changes due to damage or bulging.

3. Bubble Wrap for Your Reputation

Your products aren’t the only thing that might get damaged. Three out of five consumers feel their relationship with a retailer is negatively impacted when they receive a damaged order. And since at least one of those five customers would never buy from the retailer again, it’s not a risk worth taking.

“When designing product packaging, look for options that will allow your product to padded, securely packaged, and allow it to be shipped with minimal additional protection. Using smaller boxes will save money on each shipment, even if this means using heavier cardboard for the product box. ”

  • – Mikhail Ledvich at Shippo

Great Things Come in Custom Packages

At Packlane, we’re committed to helping ecommerce businesses design custom packaging that fits their products perfectly. That’s why we offer a range of high-quality materials and give you the power to fully customize your box dimensions and design. With minimum orders as low as a single unit, you can try our custom-sized packaging with no strings attached.

Ready to unpack your creativity? Try our interactive design tool today to enjoy a live preview of your custom packaging and see how easily you can bring your vision to life.