Company Background
Company: GlowSkin Naturals (name changed for privacy)
Industry: DTC Skincare
Monthly Orders: 8,500
Average Order Value: $65
Previous Shipping Spend: $52,700/month
Locations: Single warehouse in Ohio
The Challenge
GlowSkin faced several shipping challenges common to growing DTC brands:
Pain Points
| Issue | Impact |
|---|
| Single carrier dependency | No rate flexibility |
| Manual label creation | 4 hours/day staff time |
| Inconsistent carrier selection | Overpaying on many shipments |
| No dimensional optimization | DIM weight charges |
| Limited visibility | Couldn't analyze costs |
Before: Shipping Profile
| Metric | Value |
|---|
| Primary carrier | UPS Ground only |
| Average ship cost | $6.20/package |
| Monthly spend | $52,700 |
| % of revenue | 9.5% |
| Labels/hour | 45 (manual) |
The Solution
GlowSkin implemented a multi-carrier strategy with automated rate shopping:
Implementation Steps
Week 1-2: Analysis
- Audited 3 months of shipping data
- Identified package weight distribution
- Mapped destination zone breakdown
- Calculated DIM weight impact
Week 3-4: Setup
- Connected to Atoship platform
- Integrated with Shopify
- Configured carrier accounts (USPS, UPS, FedEx)
- Set up automation rules
Week 5-6: Optimization
- Adjusted packaging sizes
- Implemented rate shopping rules
- Trained staff on new workflow
- Monitored and fine-tuned
Package Analysis Results
Weight Distribution
| Weight Range | % of Orders | Previous Cost | Optimized Cost |
|---|
| 0-8 oz | 35% | $5.20 | $3.15 |
| 8 oz - 1 lb | 40% | $6.15 | $4.25 |
| 1-2 lbs | 20% | $7.80 | $5.45 |
| 2+ lbs | 5% | $10.50 | $7.80 |
Zone Distribution
| Zone | % of Shipments | Best Carrier Selected |
|---|
| 1-3 | 25% | USPS Ground Advantage |
| 4-5 | 45% | USPS or UPS (varies) |
| 6-8 | 30% | USPS Ground Advantage |
Carrier Mix (After Optimization)
| Carrier | % of Volume | Avg Cost | When Used |
|---|
| USPS Ground Advantage | 68% | $3.85 | Most residential |
| UPS Ground | 22% | $5.45 | Heavy items, business |
| FedEx Ground | 8% | $5.20 | Specific scenarios |
| USPS Priority | 2% | $6.80 | Rush orders |
Savings Breakdown
| Optimization | Monthly Savings |
|---|
| Carrier rate shopping | $15,200 |
| Dimensional optimization | $4,800 |
| Commercial rate access | $3,500 |
| Automation efficiency | $2,000 (labor) |
| Total Monthly | $25,500 |
Before vs After Comparison
Cost Metrics
| Metric | Before | After | Change |
|---|
| Avg cost/package | $6.20 | $3.60 | -42% |
| Monthly spend | $52,700 | $30,600 | -42% |
| Annual spend | $632,400 | $367,200 | -$265,200 |
| % of revenue | 9.5% | 5.5% | -4 pp |
Operational Metrics
| Metric | Before | After | Change |
|---|
| Labels/hour | 45 | 180 | +300% |
| Daily ship time | 4 hours | 1.5 hours | -63% |
| Error rate | 2.3% | 0.4% | -83% |
| Customer complaints | 15/month | 5/month | -67% |
Implementation Details
Rule 1: Weight-based carrier selection
- Under 1 lb → USPS Ground Advantage
- 1-3 lbs → Rate shop USPS vs UPS
- Over 3 lbs → UPS Ground
Rule 2: Value-based handling
- Orders over $150 → Add signature confirmation
- Orders over $300 → Add insurance
Rule 3: Destination-based selection
- Rural addresses → USPS (better coverage)
- Business addresses → UPS (no residential surcharge)
Rule 4: Speed requirements
- Express requested → USPS Priority or UPS 2-Day
- Standard → Lowest cost option
Packaging Optimization
| Previous Box | New Box | DIM Savings |
|---|
| 10x8x6 for all | 6x4x4 (small) | $1.20 avg |
| 10x8x6 for all | 8x6x4 (medium) | $0.80 avg |
| 10x8x6 for all | 10x8x6 (large) | $0 |
Customer Experience Impact
| Metric | Before | After |
|---|
| Avg delivery time | 5.2 days | 4.1 days |
| On-time delivery | 92% | 96% |
| Tracking accuracy | 85% | 98% |
Customer Satisfaction
| Metric | Before | After |
|---|
| Shipping satisfaction | 4.1/5 | 4.6/5 |
| "Where's my order" tickets | 180/mo | 65/mo |
| Delivery complaints | 42/mo | 12/mo |
Financial Impact Summary
Annual Savings
| Category | Annual Savings |
|---|
| Direct shipping costs | $265,200 |
| Labor efficiency | $24,000 |
| Reduced errors/reshipping | $8,400 |
| Total Annual Savings | $297,600 |
ROI Calculation
| Investment | Amount |
|---|
| Atoship subscription | $2,400/year |
| Implementation time | $3,000 (one-time) |
| Total Investment | $5,400 |
| ROI | 5,411% |
Key Takeaways
What Worked
Multi-carrier approach: No single carrier is best for everything
Automated rate shopping: Saves time and ensures optimization
Package right-sizing: Significant DIM weight savings
Rule-based automation: Consistent, optimal decisionsLessons Learned
| Lesson | Application |
|---|
| Test before full rollout | Start with 10% of orders |
| Monitor carrier performance | Track delivery times by carrier |
| Adjust rules quarterly | Carrier rates change |
| Train staff on exceptions | Handle edge cases properly |
Recommendations for Similar Brands
Quick Wins (Week 1)
- Analyze current shipping data
- Identify single-carrier dependency
- Calculate per-package costs
Medium-Term (Month 1-2)
- Implement multi-carrier solution
- Set up rate shopping rules
- Optimize packaging sizes
Ongoing
- Review carrier mix monthly
- Adjust rules as rates change
- Monitor customer satisfaction
Start Your Optimization Journey
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