How Do Shipping Labels Work?

As an online business owner, shipping labels are one of the most important tools in your shipping process. A proper label ensures your parcels arrive quickly and safely. But how do shipping labels work?

In this guide, we'll answer this question alongside discussing what they include and how you can create them easily.

Key Takeaways

• Shipping labels carry the key details needed to deliver and track packages.
• These labels help carriers sort, scan, and deliver orders accurately.
• Clear, accurate labels are essential for smooth eCommerce shipping in Canada and abroad.

What is a Shipping Label?

A shipping label is a document that contains essential delivery and tracking information. They are usually printed on a sticker, attached, and are used by carriers to make sure the parcel gets to the right customer at the right time.

What is the Purpose of a Shipping Label?

The purpose of a shipping label is more than just carrying the details of your package. It tells where the package is going, the service level used, and how to track it. Without a proper label, your parcel won't go anywhere.

What's worse? It could end up at the wrong address, creating an unnecessary issue between you and the customer.

How Do They Work?

Shipping labels give shipping companies and their systems the data they need to sort and deliver packages.

Here's a breakdown of what goes into them to have a better:

Recipient Name, Address, and Phone Number

The first section indicates who you're shipping to. It has the recipient's name, their address, and contact number. So, double-check that the information matches exactly what the customer entered at checkout, especially for apartments or condos.

Example:

Emma Liu

Unit 304, 1205 Bay Street

Toronto, ON M5R 2A9

(416) 555-7890

Do you notice anything? The unit number and postal code are clearly written. A package delay or return can happen if either is missing or incorrect.

Sender Address

This is your return address. Unfortunately, things can happen where the delivery personnel can't deliver your package, or it needs to be returned. So, make sure it's accurate and tied to your business.

In this section, we will provide you with two examples:

1. If you are a home-based seller, you can input your home address as the return address like this:
   
   Jasmin Singh
   123 Oakridge Crescent
   Surrey, BC V3X 1B2
2. If you have a warehouse, you can put that as the return address instead, like:
   
   Maple Threads Fulfillment
   90 Bentall Street, Unit 5
   Richmond Hill, ON L4B 4P5

If you're using a 3PL like Stallion, they may allow you to use their return address to simplify the process.

Tracking Number and Barcode

Each shipping label includes a tracking number tied to a barcode. The carrier scans these codes at different points during shipping.

Many carriers and third-party shipping platforms automatically update the tracking status as it moves through sorting facilities, trucks, and final delivery. This helps customers to be informed throughout the shipping journey.

Unidirectional or QR Code

These are machine-readable codes that allow for fast and accurate scanning. You can scan some QR codes with mobile apps, improving flexibility.

Example:

If you use a service like UPS or FedEx, they may include a QR code that allows employees to scan packages on mobile devices. This works even without a barcode scanner. It boosts speed and accuracy, especially during busy shipping seasons.

Weight

Shipping labels include the package's weight. While this tells us how heavy the item is, it also determines how much you pay for postage. So, be honest with the weight, especially when using third-party shipping software.

Example:

You're shipping a hoodie and accessories that weigh 0.9 KG. Round up to 1.0 KG instead of rounding down. Under-reporting could lead to the carrier returning or holding your parcel until you pay the difference.

Shipping Method

This section shows the level of service and the shipping method you choose, like how fast the parcel should be delivered. It's best to offer different options at checkout to help your customers choose based on price or speed.

Payment

The payment section confirms whether the label has been paid for. You'll see a "Paid" or "Prepaid" mark, especially when using a shipping platform.

Example:

You generate a label through Stallion, and it will show "Stallion Prepaid." This means you've already paid for it through your account. It avoids confusion at drop-off or pickup.

Also Read: How to Make A Shipping Label: Stallion’s Handy Guide

Why are they Important for eCommerce?

Shipping labels are a must for any online business in Canada. Here are the reasons why they are important:

Information on the Label

Accurate details help avoid delivery issues. A missing unit number or a wrong postal code may seem like a simple problem. However, it can easily send a package back or delay it for days.

Carrier Use

Carriers depend on the label to sort and move parcels efficiently. They are especially valuable during high-volume times like the holiday rush or Black Friday.

Tracking and Delivery

More than anyone else, your customers expect updates. Labels with barcodes allow for real-time tracking from your store to their doorstep.

Barcode Technology

Modern shipping labels include high-quality barcodes or QR codes. This speeds up scanning and reduces human error in the sorting process.

How to Create A Shipping Label

Creating shipping labels can be confusing at times. Here's how Canadian sellers can create labels that work:

1. Choose A Shipping Carrier

Select a courier or use a shipping platform that offers more competitive shipping rates for Canadian sellers. However, don't forget to consider your customers' needs before making a decision.

2. Prepare the Shipping Details

Collect the recipient's name, address, and phone number. Double-check for accuracy, especially for international shipping.

Pro Tip: Having a shipping label template will make the process quicker, especially if you're creating the shipping label online.

3. Select Shipping Service and Options

Choose how quickly you want the parcel to arrive while considering the shipping costs.

For example, your customer might need the package immediately, so express shipping might be the option for her. On the other hand, if time is not an issue, standard or economy shipping might already be enough.

Next, add extras like insurance or signature confirmation if needed, especially if you're offering free shipping to your customers.

4. Generate the Shipping Label

Use the carrier’s online tool or a platform to create the label. Many software programs let you create and manage multiple labels at once, saving you time and effort.

5. Print and Attach the Label

Use a thermal or inkjet printer to print shipping labels. However, before doing so, ask the shipping company because some may have their preferences. Once confirmed, attach it to the largest flat surface of the box, avoiding seams and corners.

6. Drop Off or Schedule A Pickup

Drop the package off at a post office or courier hub, or book a pickup if your carrier offers it. Just note that your shipping label may include specific instructions for drop-offs or pickups.

Shipping Label Best Practices

Keep your packages moving smoothly and avoid delivery issues. Here are the best practices every Canadian online seller should follow when handling shipping labels:

Use Clear and Accurate Information

Typos or missing details can lead to failed deliveries, returned packages, or long delays. Always triple-check the following details before printing the label:

• Recipient's full name
• Complete address
• Postal code

Note that even a small mistake can cost you a significant amount of time and money.

Print Labels Clearly

Use a reliable printer that produces sharp, clear text and barcodes. If your label is blurry, smudged, or faded, scanners may have trouble reading it. This can lead to delays, misrouted packages, or even label rejection by the carrier.

For best results, use a thermal printer or a high-quality inkjet printer.

Place the Label Properly

Place the label where it's most visible during handling—on top of the box. Avoid placing it over seams, edges, or corners, as this can cause it to peel off.

Also, don't tape over the barcode. The shiny tape can interfere with scanning, which may delay or misroute your shipment.

Protect the Label

Use clear packaging tape or waterproof label sleeves to protect the shipping label from smudging, tearing, or water damage. You want to save yourself from headaches, especially during Canada's rainy or snowy seasons.

A damaged label can be difficult to scan to read, which can lead to lost packages or delays.

Add Extra Info When Needed

If you're shipping to the US or internationally, include all required customs forms to avoid border delays. Attach them securely and visibly to the package. If you're shipping fragile items, add a "Fragile" sticker.

You can also provide clear handling instructions to help carriers treat the parcel with extra care during transit.

Use Automation Tools

Many platforms make shipping more efficient by letting you bulk-generate labels for multiple orders at once. You can auto-import customer details and shipping info directly from your online store.

This means you don't have to manually enter order data, reducing the chance of errors and saving you tons of time, especially during busy sales periods.

Final Thoughts

Shipping labels seem like a small detail, but not for Canadian eCommerce sellers. They play a major role in the success of the delivery process.

A properly formatted, accurate label ensures that packages reach the right destination without delays or confusion. In the long run, a clear, well-made label not only keeps your customers satisfied but also helps you save money.

Save Time and Money — Generate Discounted Labels with Stallion!

Are you shipping within Canada, to the US, or internationally? Stallion makes the entire process faster, simpler and more affordable.

With Stallion, you can:

• Generate discounted shipping labels in just a few clicks.
• Track all your shipments in one dashboard.
• Sync orders directly from platforms like Shopify, Etsy, or WooCommerce.

You'll save up to 80% compared to standard carrier rates, without sacrificing speed or reliability.

Plus, Stallion is a full 3PL fulfillment service. We handle everything from storage and packing to shipping. This means you can outsource your entire order fulfillment process.

What does this leave you? You have free time and multiple resources to focus on growing your business. Stallion is built specifically for Canadian eCommerce sellers, providing local support and tools designed with your needs in mind.

Start shipping smarter today with Stallion and take your eCommerce business to the next level.

Jose Sagun

Jose is Stallion's Senior Business Analyst. He helps improve the company’s shipping processes, works closely with delivery partners, and looks at shipping data to find the best prices for our customers. Outside of work, Jose has a passion for running, regularly completing 5k and 10k runs, with the goal of running a full marathon in the near future.