Save Money With Ecommerce Shipping Software: Next-Gen Solutions

Shipping costs are one of the biggest challenges for ecommerce businesses today, and understanding them is essential to reducing expenses and increasing profit margins.  With rising carrier fees, labor expenses, and warehouse leases, every dollar saved makes a difference. Shipping costs can vary greatly depending on several factors, including package weight, dimensions, destination, and shipping method. Traditional shipping software, built for a simpler time, often fails to optimize costs effectively, leaving businesses to absorb unnecessary expenses. By gaining a clear understanding of these costs, businesses can make informed decisions that help reduce shipping expenses and improve overall efficiency.

That’s where next-generation ecommerce shipping software comes in. Designed to reduce shipping costs at every stage, these advanced solutions automate key processes: choosing the most affordable shipping labels, optimizing package sizes to avoid dimensional weight fees, and streamlining fulfillment with minimal manual intervention. By leveraging automation and AI-driven decision-making, merchants can significantly cut costs while improving delivery efficiency.

In this article, we’ll explore how next-gen shipping software helps save money, eliminate cost leakages, and improve warehouse efficiency, giving businesses the competitive edge they need to succeed in ecommerce today.

Shipping Costs are One of the Biggest Challenges for Ecommerce Businesses Today

Shipping costs can be a significant challenge for ecommerce businesses, as they can eat into profit margins and affect customer satisfaction (and revenue) if they skimp on delivery speed. To reduce shipping costs, ecommerce businesses can implement various strategies, such as negotiating with shipping carriers, using discounted shipping supplies, and optimizing packaging. By taking proactive steps to manage shipping expenses, businesses can protect their profit margins and offer competitive shipping rates to their customers.

Calculating Shipping Costs

Calculating shipping costs involves considering all the factors mentioned above. To calculate shipping costs, ecommerce businesses can use shipping calculators, consult with shipping carriers, or connect to carrier APIs for real-time rate shopping, to determine the most cost-effective option. It’s essential to factor in all shipping fees, including fuel surcharges, handling fees, delivery area surcharges, and insurance costs, among others. By accurately calculating shipping costs, businesses can set appropriate pricing strategies and avoid unexpected expenses.

Savings: Stay Ahead and Boost Margins Despite Rising Costs

We’ve now identified two key things that a next-generation ecommerce shipping software must do – it must simplify operations in today’s complex world, while also doing so in a way that boosts your team’s productivity and frees up their time. 

However, the biggest pressure merchants face today is around costs. At a time when major carriers implement annual rate increases (GRIs) and additional surcharges, along with rising worker wages and warehouse leases are all going up, Sellers need to be scrappy to save every penny to protect and increase their margins. It can make the difference between going out of business and finding success. 

Legacy software does a poor job of unlocking savings because it was built for a world where resource optimization or cost-cutting was not needed. We believe there are 3 key areas of the shipping workflow where software must be able to unlock cost savings: 

• Does the software pick the cheapest shipping label every time? 
• Does the software optimize packaging and shipping costs in a world of large, complex orders? 
• Is the software easy to use, with minimal human oversight? Does it allow you to do more with limited resources? Can it work even if those resources are untrained, seasonal, or part-time labor? 

Pick the Cheapest Label Automatically, Every Time

Legacy Software – You’ll Never Know if You’re Saving Money

As we’ve seen in the sections above, legacy software requires a lot of manual automation rules to be written to support workflows. But why do merchants go to all this trouble and take the time to do so? The answer is simple – to identify the cheapest shipping label on every order.

However, the automations (mapping SKUs and customer addresses to fulfillment locations and carrier services) are simply a means to an end. There is no way to actually tell whether the rules are doing what they’re intended to: ensuring that the cheapest option is picked every time. 

To actually identify that, manual and deep cost comparison analysis has to be done to figure out the reality. The possibility of cost leakage is a real one. And in a world where customers expect free and fast shipping on every order, every last dollar and penny matters. You need certainty and confidence in the labels your shipping software is picking. 

Next-Gen Software – Savings on Every Label

Cahoot’s software eliminates the maze of complex human-defined, hand-written automation rules. With these rules gone, you don’t need to worry about whether you’ve optimized your automation rules for maximum savings. And when a new rule is needed, no time needs to be spent checking backward compatibility. The system intelligently factors in all available parameters to make the right choice, every time. 

It’s possible to overlook many possibilities when defining automation rules by hand. For example, a 1 unit order for a certain SKU might weigh less than 1 lb, allowing you to use USPS Ground Advantage. But what if someone orders 3 units? Or 6 units? In each case, the system factors in all data and parameters to make the right decision. 

You don’t need to spend time doing a deep, detailed investigation into whether you’re actually saving money. You can rest assured knowing that you’re getting the best label every time. 

Pay the Right Shipping Fees, Even on Complex Orders

Legacy Software – Cost Leakages From Human Error

We’ve highlighted how legacy software makes it more complicated for your team on the warehouse floor to handle Multi-Line, Multi-Quantity Orders. By leaving the judgment of which box to use in the hands of humans, you don’t just sacrifice productivity – you could also lose money on every order. 

The shipping carriers set their rates based on dimensional weight. If your team uses a box that is larger than is actually needed, the item can have higher DIM weight, costing you more money than the discounted shipping rates you should be paying the shipping carriers. 

With no automation or decision guidance from your shipping software, the decision is left to the eyeball judgment of your team, which increases the possibility of errors.  

Next-Gen Software – Pay the Optimal Rate Every Time

With Cahoot’s Intelligent Cartonization technology, you can rest assured knowing that you’re using the right box (or boxes) for even your most complex orders. 

This means that items go in the optimal boxes and you only pay the minimum rate required to ship the order. By taking the thinking out of the workflow and leaving the decision-making to the technology, the possibility of errors is dramatically reduced, ensuring that you save every last penny. 

Ease of Use

Legacy Software – Needs Staff to Babysit the Tool

As we’ve seen, legacy software is clunky and complicated to use. At every turn, the tool requires manual data entry, workflow configuration, and updating by humans. Once you configure these tools, you can’t ‘set it and forget it’. Changes from the carriers or updates to your product catalog break the automations and configured workflows, requiring someone to constantly babysit and oversee the tool. 

Most Sellers hire dedicated resources, or even teams, just to configure, deploy, and maintain their ecommerce shipping software. In a world of rising costs, this means you even lose money on expensive staffing. To make matters worse, those members of your team are perpetually stuck maintaining legacy software, rather than contributing in other, more valuable areas.

Next-Gen Software – Anyone Can Use it

With Cahoot’s next-generation software, most workflows are taken off your team’s plate and are automated by the system. Changes that occur at your end or from the carriers are easily factored in by the system’s automation. This ensures that you don’t need to deploy dedicated resources to implement or maintain the system. 

It is possible for untrained, part-time, or seasonal employees to quickly learn and use Cahoot. In today’s competitive labor market, this can unlock a competitive advantage by allowing you to do more with less. Your team members are also freed up to focus on more value-added tasks, rather than spending all day ensuring that your shipping software doesn’t fall apart.

Summary: Why Next-Gen Shipping Software is Essential for Cost Savings

As ecommerce businesses grow, so do their shipping expenses. Legacy shipping software relies on outdated shipping processes that often lead to cost leakages, inefficient package selection, and unnecessary manual labor. These inefficiencies add up, directly impacting profit margins.

With next-gen ecommerce shipping software, businesses can reduce shipping costs by:
✅ Automatically selecting the cheapest shipping label for every order
✅ Optimizing packaging to prevent overpaying for dimensional weight
✅ Eliminating manual labor costs with intelligent automation
✅ Enabling untrained or seasonal staff to handle fulfillment easily

By embracing smarter shipping solutions, merchants can stop overpaying, streamline operations, and reinvest their savings into growth.

This was Part 4 of our 4-part Next-Generation Shipping Software Guide highlighting how next-gen shipping software saves ecommerce businesses money. If you’d like to learn more, check out the other 3 parts including what has changed between the old and new world of ecommerce order fulfillment, how next-gen shipping software simplifies fulfillment operations, and how it makes order fulfillment more efficient.

Frequently Asked Questions

What is the best shipping software?

It depends on what you’re looking for in shipping or fulfillment software. To manage shipments and print shipping labels, you can try a legacy solution like ShipStation, which has many limitations. Alternatively, to automate shipping and enhance your team’s productivity, you can choose a next-generation fulfillment technology that facilitates faster, optimized shipping with built-in best-in-class discounted shipping rates.

How is Cahoot able to offer discounted shipping rates for small businesses?

Cahoot aggregates bulk shipping volume across all our users of all sizes and partners with several major carriers and consolidators to negotiate best-in-class carrier discounts, which we make available to users of the Cahoot Label Software and Fulfillment Services.

What shipping carriers does Cahoot work with?

Cahoot works with UPS, FedEx, USPS, DHL, Amazon Shipping, OSM Worldwide, OnTrac, Pitney Bowes, and several regional carriers. Our large network ensures you have access to the best shipping options for your business, whether you need flat-rate shipping options or local delivery services.

How do I integrate Cahoot with my ecommerce platform?

Cahoot integrates easily with dozens of ecommerce platforms, including Shopify, WooCommerce, and BigCommerce, as well as listing management tools and marketplaces such as Amazon, TikTok Shop, Rithum (formerly ChannelAdvisor), and many more. Our simple, native integrations allow you to start shipping with discounted rates quickly and streamline your shipping workflows.

How quickly can I save on my shipping costs?

As soon as you sign up for Cahoot, you can start saving on shipping costs. Our platform gives you instant access to pre-negotiated shipping rates, helping you cut expenses from day one.

Do you provide customer support in case I need help?

Yes, Cahoot offers full customer support and an extensive (but easy-to-navigate) self-service help center to help with any questions or issues. Our support team is here to assist you with everything from integrating your ecommerce platforms to choosing the best shipping options and navigating packaging costs.

Can ecommerce shipping software handle returns?

Yes, Cahoot ecommerce shipping software can efficiently handle reverse logistics from returns, automated return label generation, return order tracking, and inventory management, to peer-to-peer returns support where unused items that are being returned can be shipped from the returning customer directly to the next customer purchasing the same item. Peer-to-peer ecommerce returns are the future of reverse logistics as they can cut the cost of returns by 64%, increase inventory turnaround by 4X or more, and cut CO2 emissions by 54% on average. Peer-to-peer ecommerce returns are the most eco-friendly solutions on the market.

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