February 21, 2010
The last several posts about Priority Mail Flat Rate Boxes have stirred up some great observations by readers. The comments below are from Jay Eichler of The Ultimate Thomas Store. Jay is a big seller of licensed Thomas & Friends products on his website, eBay, and Amazon, so he is very knowledgeable about best practices for shipping. As you will read below, his suggestion can save you 38% on shipping USPS Priority Mail Flat Rate Boxes. Thank you Jay!
I invite any of you with best practices to share them with our community by emailing me at email@example.com. Together, we can help one another save on shipping and boost our economy.
Here is Jay’s email:
USPS has spent a lot of advertising dollars on getting people to use the flat-rate boxes. In my opinion, for 90% of what is shipped in them (including many of the widgets they use in the commercial), it would be much more economical for the shipper to use the non-flat rate boxes to get a better deal. For example, this past week I won a Yankees thermal jacket on eBay. The seller lived about 100 miles from me, charged me $16.00 for shipping, and shipped in a USPS Medium Flat rate box which cost them $10.70. Had they shipped in a regular Priority Mail box (Box 1095), it would have only cost them $6.67 for the same package. For a seller on eBay, who should be especially conscious of shipping charges with their DSR ratings at stake, this is a huge waste of shipping dollars.
I don’t know if this is something you would want to publish in your blog, but with the latest change in USPS Priority Mail pricing, the Priority Mail Envelope is now cheaper than the Small Flat Rate Box. The one thing I don’t think USPS thought about is that you can fit the box inside of a Flat Rate Envelope. You could actually use two USPS shipping containers, place one inside the other and ship for the lower rate. Using this, why anyone would pay for a Small Flat Rate Box is insane!
Keep up the Good work!
The Ultimate Thomas Store
September 19, 2009
Warehouses that ship small parcels are different than the other types of shippers that I have discussed so far. They ship a much higher volume of packages, from hundreds to thousands of parcels a day. They can be manufacturers, distributors, or third-party logistics companies (3PL). A 3PL is a company that provides outsourced logistics services (more about 3PL’s in a future post).
Small parcels are packages that weigh less than 150 pounds and are typically shipped with UPS, FedEx, DHL, Regional Carriers ( Lone Star Overnight, Eastern Connection, OnTrac,), and the US Post Office. Parcel shippers may also be Less-Than-Truckload (LTL) shippers or full truckload shippers. The way parcels are processed is very different than LTL shipments. Each parcel has a separate tracking number and label. A LTL shipment is usually a pallet with many boxes and shrink-wrapped. The pallet is shipped as a single unit.
Companies that ship small packages send them directly to consumers (business to consumer or B2C) or to businesses (B2B).
Examples of B2C shippers include the following:
- books (Amazon.com)
- apparel and accessories(LandsEnd, Zappos)
- gift baskets and mail order (Harry and David)
- sporting goods (Callaway, TaylorMade)
- electronics (Best Buy)
- medical supplies (Liberty Medical)
- computers (Dell, Apple)
- drugs, vitamins (CVS,GNC)
Examples of B2B include the following:
- industrial supplies (Grainger)
- pharmaceuticals (Merk)
- automotive supplies (Michelin)
- office supplies (Staples)
- fasteners, bolts, rivets (Fastenal)
- electrical components (Westinghouse, Allied)
- industrial valves (Asco, Kingston)
- industrial chemicals (Dow, BASF)
Because of the sheer volume of packages that a typical warehouse sends, these shippers tend to be very sophisticated. Throughput and accuracy are the most important attributes that they look for in processing. Features that warehouse shippers look for include the following:
- Multiple user processing
- Integration with Enterprise Resource Planning (ERP) or Warehouse Management Systems (WMS)
- Business rules
- Error checking
- Mode optimization
- Integration with material handling systems, such as conveyors, scales, label printers
- International processing capabilities
I will be discussing many of these software features in future posts, so stay tuned.
August 8, 2009
The fifth category of parcel shippers is an Internet Retailer. This could be a SOHO with a website that markets products over the internet or a power seller on eBay. It could also be a retail store that also markets their products online. The difference here is volume. Internet Retailers ship every day. Volumes can range from a dozen packages to a hundred plus parcels a day. Technology becomes critical to making their lives easier. They utilize programs like Blackthorne Pro, Auctiva, and Channel Advisor to automate their auctions, images, orders, and fulfillment. When it comes to shipping, technology that can increase productivity is important. The following are features and functionality that appeals to Internet Retailers:
- Internet Retailers want shipping functionality integrated with the software that they use to process orders. They don’t want to have to type or cut and paste shipping addresses from one software program into another.
- The ideal shipping technology provides the most cost effective service and carrier for each package. This can be accomplished through business rules or comparing prices based on delivery requirements.
- The capacity to ship with multiple carriers. These shippers realize that no carrier is the least expensive in all categories. They want to be able to ship with several carriers. They need to print USPS First Class, Priority Mail and Media Mail labels with Delivery Confirmation. They want PC Postage capabilities and also need to be able to ship packages via UPS, DHL, and FedEx.
- Technology that can cut costs and eliminate errors is valued such as features like address validation and checking whether or not an address is a residence or business that can reduce accessorial charges.
- The ability to ship parcels to international locations is essential.
- Batch processing is indispensable. Internet Retailers want to be able to produce shipping labels in mass rather than one at a time.
- The capacity to have multiple users is significant; this is the first category that may have employees to help in the shipping process.
- Tracking of packages is important to this segment; they are committed to customer service and want to easily respond to customer inquiries; they want to know when a package was delivered.
- Internet Retailers also want to pro-actively notify their customers when a package has shipped, the carrier, and the tracking number. They want shipping software that can send an email automatically to a customer with all the details.
- Finally, the Internet Retailer wants reports on shipping volume, average weight per package, average cost per package, dollars spent for each service and carrier, and so forth.
July 19, 2009
The third kind of parcel shipper is the eBay type shipper. This is a person that sells products part time via eBay or some other internet site. According to a June 2006 survey conducted by ACNielsen International Research, there are approximately 1.3 million sellers around the world who use eBay as their primary or secondary source of income. Ina Steiner of Auction Byte says that there are 1.3 million amazon sellers. This is a significant amount of the market. These part time shippers typically ship anywhere from a few packages a week to dozens per day.
One of the challenges that eBay shippers face is reducing shipping charges. Buyers of products look for the lowest cost and savvy sellers that know how to ship inexpensively will get more business than sellers that naively ship packages using the wrong service or for higher rates. In my survey of eBay shippers at two eBay Live conventions, 6 out of every 10 people that ship on eBay pay too much for shipping. I spoke about this on a segment of SBTV, called eBay Shipping Tips.
Typical mistakes that these kinds of shippers make are the following:
- They pay retail for shipping; UPS offers programs for eBay shippers to save up to 31% off retail rates. Even the US Post Office (USPS) provides discounts and freebies, like free Delivery Confirmation to shippers that use on-line technology for processing their shipments.
- They don’t manage the weight of their packages. Sometimes, cutting an ounce or two of packing material can substantially reduce the cost of shipping.
- Most part-time shippers put all their eggs in one basket; by this I mean that they only use one carrier such as UPS or USPS. According to market research, most eBay shippers use the US Post Office as their carrier because of the convenience. They assume that the cheapest way to send a package is Parcel Post (it is not always). While the USPS is a great carrier and frequently is the lowest costs, these shippers can significantly cut their shipping expenses by comparing rates and service options of multiple carriers.
Free shipping is the most competitive way to sell on eBay; to do that and remain profitable use a carrier and service that is the most economical.
June 20, 2009
One of the challenges shippers face is making decisions about, well about everything—processes, technology, carriers, rates, etc… regarding their shipping operation. Circumstances change depending on the type of shipping. For example, if you ship from an office, you have different needs than if you ship from a warehouse.
All shippers are not alike. Too many shipping vendors try to have a one size fits all solution—from carriers to software companies. My contention is that if you can find yourself on a map, you can increase the likelihood of getting what you need to be as efficient as possible. Shippers needs differ. By creating a map you can make sense of your segment and get a better solution.
I got this idea to create a map of shipping operations from of my favorite authors, Ken Wilber. Ken is a contemporary American philosopher that has written dozens of books including, A Theory of Everything. In this book, he says “What is the point of using this Integral Map? First, the Integral Map helps make sure that you are “touching all the bases.” If you are trying to fly over the Rocky Mountains, the more accurate a map you have, the less likely you will crash. An Integral Approach ensures that you are utilizing the full range of resources for any situation, with the greater likelihood of success.”
So that you don’t make a mistake shipping and crash, I am going to use this approach to map out the territory for parcel shippers in a series of posts. Today, l will lay out 13 different kinds of parcel shippers.
- Consumer—occasional ships a package
- Mobile worker—works for a large corporation but from home
- eBayer—sells products part time on ebay or amazon.com
- SOHO—small office, home office
- Internet retailer—has a website and ships product to customers
- Office—ships a small volume, mostly urgent envelopes and an occasional package
- Legal—ships documents
- Mailroom—processes envelopes mostly but needs to ship urgent envelopes and packages
- Warehouse—a distribution center or manufacturer that ships packages weighing less than 150 pounds
- 3PL—third party logistics company that fulfills and ships products for multiple companies.
- Campus—university or corporation with multiple shipping points on a campus type environment
- Multi-Warehouse—a company that has multiple distribution facilities
- Global—an organization with multiple shipping points globally
What kind of shipping operation do you have? Does one of these categories cover your type of shipping? Let me know if I missed a category and stay tuned as I will detail some of the different need of each type of shipper.
November 25, 2008
Most Amazon sellers make mistakes when shipping packages. When you sell an item on Amazon, you receive a fixed amount as a shipping credit to help cover shipping costs, so it is important to know your shipping costs or you could lose money. If you ship smart, you can make a profit.
Taylor’s Tip “Don’t assume; compare different services.”
Most Amazon sellers assume that Media Mail, available from the United States Postal Service (USPS) is the least costly method of shipping and don’t even bother to compare rates. This is a mistake. If you have a package that weighs less than seven ounces, then you should consider First-Class Mail. The USPS has a special rate for packages weighing less than 13 ounces, and for lighter weight packages it is cheaper than Media Mail! First-Class mail is delivered in three days or less, so your customers should be delighted. You can also add Delivery Confirmation.