By Entrepreneur Staff


Shipping Definition:

The business of sending or transporting goods

Sending your mail or packages under the appropriate U.S. Postal Service (USPS) classification can save your business hundreds--or even thousands--of dollars each year, depending on how much and how frequently you mail. The USPS divides mail into six classifications:

  1. Express Mail
  2. Priority Mail
  3. First-Class Mail
  4. Periodicals
  5. Standard Mail (A)
  6. Standard Mail (B)

Express Mail offers next-day service 365 days a year. Priority Mail can be used when the speed and expense of Express Mail aren't necessary but preferential handling is still desired. Priority Mail offers two-day delivery to most U.S. addresses. The maximum weight for Priority Mail is 70 pounds.

Your local post office can supply you with Priority Mail labels, stickers, envelopes and boxes at no extra charge. The 2-pound flat-rate envelope is typically convenient to use. The rate of postage is the same as that charged for a 2-pound piece of Priority Mail, regardless of weight. A presort discount is available for large mailings. Priority Mail can be insured, registered, certified or sent c.o.d. for additional charges.

First-Class Mail is used for sending letters, postcards, greeting cards, checks and money orders. If your first-class item weighs more than 11 ounces, use Priority Mail. Additional services such as certificates of mailing, certified, registered and c.o.d. can also be purchased for First-Class Mail. All First-Class Mail receives prompt handling and transportation.

The periodicals rate is available to publishers or registered news agents approved for periodicals mailing privileges. Other rates must be paid for magazines and newspapers mailed by the general public.

Standard Mail (A) is used primarily by retailers, catalogers and other advertisers to promote their products and services. This is the type of mail you'd be using if, for example, you were sending out a direct-mail piece to 1,000 potential customers. To qualify for standard mail (A) rates, you buy a standard rate permit from the post office. There is an annual fee for this (about $150), and other fees may be charged depending on the degree to which you are automating your mail. Standard Mail (A) is available in two subclasses: regular (also called "bulk rate") and nonprofit. Standard rate (B) is for parcels weighing 1 pound or more.

For a mailing to get Standard Mail (A) rates, you must be mailing a minimum of 200 pieces or 50 pounds per mailing; the pieces must each weigh less than 16 ounces. There are many discounts available. Essentially, the more work you do in advance in terms of sorting, bundling and labeling, the lower postal rate you'll pay. At the minimum, nonautomated level, you'll need to presort your mail by ZIP code, mark it with "Bulk Rate" and pack it in trays. The more automated you get, the lower your per-piece mailing cost gets. The post office has specific guidelines for automation, including bar-coding, standards for address accuracy and requirements for automation compatibility.

To find out more about mail classifications and how to prepare your mail the least expensive way, visit the USPS website or go to one of the USPS Postal Service Business Centers. These centers can advise you on preparing and designing mailings, discounts for presorting and saturation mailings, bar-coding, ZIP+4 strategies and other ways to cut your mailing costs. Some also sponsor educational seminars for business owners. The USPS will also bring your mailing list up to its standards and add the ZIP+4 extension to all complete addresses once at no cost. To find out where the closest Business Center is, contact your local post office.

When it comes to shipping packages overnight, not everyone wants to use the USPS. Fortunately, there are a variety of ways to send overnight mail. The biggest players in the field, next to the USPS, are DHL Worldwide Express, FedEx and UPS. Each will come right to the doorsteps of even the smallest home based businesses.

When deciding on an express mail carrier, first think about the services you need. Will you be sending one package per week or 15 per day? Domestically or internationally? Do you want delivery the same day, the next day, or in two or three days? Will you be shipping by air or ground?

When you are choosing an international courier, first ask the company for a list of countries it delivers to. Also remember that courier services overseas differ from domestic services in two ways. First, your package may be turned over to a foreign delivery service once it reaches the country to which it's being sent. Second, customs regulations require documentation for clearance of your export shipments.

Whether domestic or international, ask about a courier's hours and days of service and if there are extra charges for deliveries on Saturdays. Companies may allow you to set up daily pickup times or may provide pickup on an as-needed basis. Typically, you get volume discounts based on how much mail you send.

Most companies also offer a range of delivery times--for example, "next business day, a.m." or "next business day, p.m." Some may even offer same-day delivery for an extra fee. Other services offered may include management reports and acknowledgement cards.

Courier services are highly competitive and are eager to acquire new business. As a business owner, you have clout with courier services, so don't hesitate to ask questions and negotiate for special rates and services. Once you know what your express mail needs are likely to be, compare them against what the different courier services offer.

More from Operations

Capital Equipment

Equipment that you use to manufacture a product, provide a service or use to sell, store and deliver merchandise. This equipment has an extended life so that it is properly regarded as a fixed asset.

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The process of receiving, packaging and shipping orders for goods

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The process of bringing goods from one country for the purpose of reselling them in another country

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An expense item set up to express the diminishing life expectancy and value of any equipment (including vehicles). Depreciation is set up over a fixed period of time based on current tax regulation. Items fully depreciated are no longer carried as assets on the company books.

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