If You Ship Items Worth Over $100; This Secret Can Save You Big!

Do you ship items worth over $100?

What happens if that item is not delivered and your customer complains?

If you are an Amazon seller, you are bound by Amazon.com’s A-to-Z Guarantee and the money is automatically refunded to the customer. Most likely, you will refund the customer or ship another item, but you lose your profit and bear the costs of your product and the shipping costs.

The US Post Office, UPS, FedEx, and DHL all offer various forms of insurance if your package is lost or damaged. With these carriers a shipment is automatically protected up to $100 for loss or damage, but if you require more protection than you need to declare a higher value for protection. FedEx and UPS call it “Declared Value”. DHL calls theirs “Shipment Value Protection. The US Post Office offers insurance as well.

The formula works pretty much the same even though the rates are different if you have a retail or commercial account.

For example, for customers with Retail Rates, UPS charges $0.90 for each $100.00 (or portion of $100.00) of the total value declared, with a minimum charge of $1.80. If you had a package that was worth $500, you would subtract the $100 that is included and have $400 or 4 units x $0.90 for a cost of $3.60.

If you shipped 10 packages a month of this value, you would be paying $36 just for insurance!

FedEx charges $.70 per $100 of value with a minimum charge of $2.10.

The USPS starts with the first dollar that you declare, has a minimum of $1.75. For $100 package, the cost is $2.25.

Now here is a secret that many eBay sellers and online merchants don’t know. There are third party insurance companies that will insure your packages for 50% less than the carriers charge.

Here are the rates from one third-party insurance provider: (Full Disclosure—I would receive a small referral fee if you use this service)

• UPS/FedEx Ground $.30 per $100
• USPS Priority Mail with Delivery Confirmation $.50 per $100

This is a HUGE savings. For a $200 package with FedEx, the cost would be $.60 instead of $2.10—a savings of 71%!

For USPS, that $100 package is only $.50 instead of $2.25, a savings of 78%!

How to Beat the High Cost of Parcel Shipping!

I have been working in the mailing and parcel industry since 1976—34 years! I am still surprised at what I see and hear. If you don’t know what you are doing, you can waste a ton of money. The worst part is that the carriers don’t make it easy for you, the small parcel shipper, to do it right. In fact, it almost seems like they confuse you on purpose. Let me give you an example, let’s say that you want to ship a package on Monday and get it to your customer by Wednesday. Which service would you use? Many would choose a service like UPS 2^nd Day Air or FedEx 2 Day service. Others might use US Post Office Priority Mail. What if you want to be sure that it gets there and choose the most economical service?

What is the best way to ship this package: UPS, FedEx, or US Post Office?

I went online to FedEx.com, USPS.com, and UPS.com and researched shipping a 5 pound package being shipped from Plymouth MI to a residence in Lawrence KS.

Here are the results of my analysis:

• The most expensive choice was UPS 2^nd Day Air for $27.91—guaranteed.
• FedEx 2Day would get my package there for $27.58—guaranteed. (almost the same)
• USPS Priority Mail was only $11.76. This would save me 57% but it is not guaranteed.
• But wait, if you look at the display below, you would see that FedEx Home Delivery would get it there in “2 Business Days.”
  
• Why do they have to make me figure out that 2 Business Days is Wednesday! Why do they make it so hard!
  
• I could pay $11.85 and it would be guaranteed. Looks like the best deal, but why pay retail if I could get a discount?
• I checked my discounted rates and saw that it was only $9.21, 22% less than retail. (email me and I will tell you how to get this discount)

Look at how much difference there is between rates. If I didn’t know what I was doing, I could have paid as much as $27.91!

I saved $18.70 on one package, or 67%.

Even Small Parcel Shippers Can Save 50% or More!

Wow! It sure does cost a lot to ship a small package. Even though I advise people on shipping packages, the truth is that I don’t personally ship that much, maybe a couple of packages a month. So, when I do ship something, like I did over the weekend, I experienced firsthand the surprise and frustration of small parcel shippers. Here is what I saw and learned when I shipped several items.

• My first observation was that the retail cost to ship an envelope across the country (from New York City to Beverly Hills, CA) was exactly the same for FedEx Priority Overnight and UPS Next Day Air. I knew that the prices for ground shipments were the same but I did not realize that it was also true for express shipments.
• Of course I was shocked that the price was $32.05! I can’t believe that anyone pays that much.
• Of course, I was glad that I only paid $14.11 with the discounted rate that I was able to obtain because of my industry knowledge. I saved 56%!
• I wondered how people that don’t know where to get a discount feel about paying so much to send an overnight letter. If you email me at mark.taylor@myshippingcoach.com, I will be happy to share with you how I received that rate.

My second package was 2.2 pounds that I was sending to my son in Texas.

• I went to USPS.com to get the rates. I was surprised that this small package was going to cost me $9.95 to send Priority Mail.
• I saw that I can save $.60 by shipping it online and get Delivery Confirmation for free, saving another $.70 for a total savings of 13%.
• I wished that it could fit into Priority Mail® Small Flat Rate Box for only $4.85 online.
• While it could have fit into the Priority Mail® Medium Flat Rate Box, that would have cost $10.20 online or $.85 more.
• I wondered if people sometimes made the mistake of thinking that the Flat Rate Boxes were always the cheapest way to ship something.
• I then went to FedEx.com to compare prices. The retail rate for FedEx Home Delivery was $11.50.
• But my discounted rate was only $8.57, 25% less than retail!
• I thought about all the people I see standing in line at Kinko’s to ship a package and pay more; I wondered how they compete with bigger companies if they were businesspeople.