What is a Shipping Label and How Does it Work?

Shipping labels may seem like a tiny piece of the ecommerce puzzle, but they are vital to your online store’s success and customer satisfaction. Shipping labels share important information with your supply chain, helping technology and people alike understand the origins and destination of your package.

Without clear shipping labels, your customers’ orders could be lost or mishandled, creating a bad customer experience, damaging brand loyalty, and ultimately losing sales.

How to Offer Affordable 2-Day Shipping

This article will cover the information included on a shipping label, how to create shipping labels for self-fulfilled orders, and how a third-party logistics (3PL) provider can help take the hassle out of the shipping process.

What is a shipping label?

Shipping labels are a type of identification label that helps describe and specify what’s inside a package. Shipping labels differ depending on the carrier you use, but they all consist of things like addresses, names, weight, and a tracking barcode.

Understanding shipping labels

Most UPS and USPS shipping labels look like this:


Note: These are not ShipBob-specific shipping labels.

As seen above, shipping labels generally include the following information:

  • Origin/return address
  • Destination address
  • Package weight
  • Shipping class (Next Day Air and Priority Mail, respectively, in the examples above)
  • Electronic tracking number and barcode (automatically generated by the carrier)

The above information is critical for getting your customers’ orders where they need to go as quickly as they’re supposed to get there. This is especially important if your online store offers more than one shipping option, such as expedited shipping which is significantly more expensive; you want to make sure that customers get what they pay for and expect.

That said, the main information you or your shipping provider will need to provide is the customer’s address and return address — a good shipping software or ecommerce fulfillment provider will automatically generate the rest.

The shipping label will also show whether or not postage has been paid; if you are pre-paying and printing shipping labels online, or if you work with an order fulfillment provider, the shipping label will be marked as paid, such as the “US Postage and Fees Paid” note at the top of the sample USPS label above.

[Related Article: Fulfillment Basics: What is a SKU?]

Creating labels for self-fulfilled orders

Now that you know the “what” of shipping labels, it’s time to learn the “how.” If you’re already working with a 3PL, you can go ahead and skip to the next section.

If you are self-fulfilling orders for your ecommerce store, there are a variety of websites and apps that can help you purchase and create shipping labels for your orders. These options range from paying for and printing labels on USPS and UPS’s websites to more robust shipping automation platforms like ShipStation. Your ecommerce platform and/or marketplace may offer shipping label generation as well.

Shipping with a 3PL

Working with a third-party logistics company that purchases and generates shipping labels for you can take the hassle and stress out of label creation. All you need to do is pay for shipping, and then the 3PL will make sure your customers’ orders are labeled and shipped properly.

Many 3PLs, including ShipBob, have also negotiated volume discounts with major carriers such as DHL, USPS, and UPS, meaning that the lowest shipping prices possible are passed on to you and your customers.

Want to learn more about working with a 3PL? Check out our e-guide, “How to Choose a 3PL for Your Ecommerce Business,” to learn how to find a fulfillment company you can trust to help your ecommerce business grow.

Download the Guide