Are Discounted Shipping Labels Trustworthy?

Shipping can be expensive, especially if you need your package delivered quickly. For this reason, many people take advantage of discounted postage offered by postal and courier companies, as well as third-party online platforms that sell shipping labels at prices below standard retail rates. But are discounted shipping labels trustworthy?

To answer this question, we must first understand how such discounts are possible and where they come from. The price of postage includes the direct costs of transporting and delivering your package, which depend on various factors, as well as indirect operating costs, capital costs, and a profit margin (or, for some government-owned postal operators, a surplus that keeps their operations sustainable).

Shipping discounts usually come from the carrier’s profit margin. Carriers often offer discounts to customers who purchase and print shipping labels online instead of buying postage at a post office because online purchases decrease the workload of postal employees and reduce operating costs. In the long term, if enough customers buy shipping labels online, the profit margin will not suffer too much because of the lower overall operating costs.

Third-party platforms that sell discounted postage have access to commercial postal rates, which are lower than retail prices, because commercial buyers generate high shipping volumes. Carriers encourage high-volume shippers because high shipping volumes spread their operating and capital costs over more shipments, reducing the average fixed cost per shipment. Some platforms purchase shipping labels at standard commercial rates, while others negotiate individual discounts with carriers.

These platforms then pass some of their savings on to customers by offering shipping labels at reduced rates, which are lower than retail prices but higher than commercial rates. Although this decreases their immediate profit margin, the reduced rates usually generate additional sales, resulting in greater overall profit. Thus, neither the carriers nor the third-party sellers lose money, and the customers get discounted postage – it’s a win-win-win situation!

While discounted shipping labels can be and often are legitimate, there are untrustworthy sellers who sell fake ones. A red flag is when shipping labels are suspiciously cheap and the seller does not have a transparent pricing structure.

For example, we at PostageMaker offer discounts of up to 50% off retail USPS and UPS prices. However, the 50% discount applies only to select services and weight categories, while the rest of the categories have a smaller discount, allowing us to make a profit. We also have a clearly structured rate table that compares our prices to USPS and UPS retail prices.

In contrast, fraudulent sellers can offer discounts of up to 90% and won’t provide a detailed breakdown of their prices. It’s impossible to make a profit selling legitimate shipping labels at 10% of the retail price. This business model is simply unsustainable.

Another red flag is when the seller offers pre-generated shipping labels, especially if they won’t specify the carrier. A shipping label not only proves that you purchased postage but also contains all the information required to deliver your package, serving as its primary identifier. You can’t just slap a prepaid “generic” shipping label on a package and write the address on the box because shipping labels don’t work like postage stamps.

A legitimate service will require you to submit all the necessary information about the package, such as the sender’s and recipient’s names and addresses, the package’s weight and dimensions, and the selected carrier and service type. Then, it will generate a unique shipping label for your package by connecting to the carrier’s server. The label will have a tracking number that you can enter into the tracking bar on the carrier’s website. If the label is legitimate, the website should recognize the tracking number and display a tracking status such as “Shipping Label Created, Carrier Awaiting Item”.

Of course, some fraudulent services may have an online shipping label form instead of selling pre-generated labels. Such platforms defraud customers by stealing their credit card information when generating a label. To avoid this, research the platform online to ensure that it has an established reputation, business address, social media presence, and customer reviews.