eBay Seller Explodes Sales with this Shipping Tip

August 21, 2010


Here is a tip from Jay Eichler, owner of The Ultimate Thomas Store, http://www.ultimatethomas.com, that he say “exploded his sales in the last year.”

“Up to last year, I was a seller on eBay (and via my own website) which shipped most of my orders (under 3 lbs) via USPS. I would use their website (usps.com) to generate the labels and ship via Priority Mail. The shipping labels I purchased especially to print in the dimensions required by Click-N-Ship (or PayPal shipping, for those that use it).

I decided late in 2009 to upgrade my entire shipping station and purchase a thermal printer (purchased reconditioned off of eBay for ¼ of it’s “new” price) to print my labels. In addition, I upgraded to a USPS-approved shipping service (in my case, Endicia), which then allowed me to offer First Class shipping of my items which could ship for under 13 ounces. Yes, this would mean that I would not be able to use the “free” shipping supplies offered by the USPS for Priority Mail shipping, but I soon realized that the boost in sales my items would get would far outweigh the benefit of the free supplies.

The result of this combination of changing shipping service methods, as well as the thermal printer (which you can get labels for free if you have and use a FedEx or UPS account) has resulted in a surge in sales due to the lower prices I can offer. While I am paying for the Endicia service ($15.95/month), my costs are still lower due to the free labels and since I use a thermal printer, no use of printer toner.

I’ve said it before, and I’ll say it again…this was the best thing I’ve ever implemented to help my business.”

To provide you an example of the savings, I looked up how much it would be to ship a 12 ounce package from New York to Beverly Hills. As you can see below, a First-Class Package is $3.09 compared to Priority Mail with the online discount of $5.44. The savings is 43% which is HUGE for an eBay seller. Thank you Jay!


What is a DIM Factor?

July 5, 2010

Every shipping department and mailroom needs a measuring tape and a scale. The reason is that in order to calculate the correct postage or shipping charges, you have to know the DIM factor.

A DIM Factor is an acronym for Dimensional Weight Factor. It is a mathematical factor for calculating the dimensional weight of a package. UPS, FedEx, DHL, the US Post Office, and some regional carriers use dimensions as a factor in determining the cost to send a package. For example, the USPS has a DIM factor of 1 cubic foot or 12″ x 12″ x 12″. If a package exceeds a cubic foot in volume, instead of the weight of the package, they use the volume of the package to rate it.

Here are the steps for a 12 ” x 12″ x 13″ package:

  1. Multiply 12 x 12 x 13 = 1,872.
  2. Next, divide the total by 194. 1,872/194=9.65.
  3. Round up the result to the next whole number to get the dimensional weight of the package. 9.65 = 10 pounds.
  4. If the dimension exceeds the actual weight, you would use this number to calculate the shipping charges. So, in this case, even if you had a 5 pound box, (which is what happened to me) you will be charged for a 10 pound box.

For more information on how USPS calculates dimensional rate, click http://www.usps.com/prices/USPS_prices_dw_pop.html

For UPS, click http://www.ups.com/content/us/en/resources/prepare/dim_weight.html#How+To+Measure+the+Cubic+Size+of+Your+Package

For the FedEx dimensional weight calculator, click http://fedex.com/be/tools/dimweight.html

For the DHL dimensional weight calculator, click http://www.dhl-usa.com/IntlSvcs/dimweight/dimweight.asp?nav=Inttools/DimWeiCal

The USPS has a different factor than UPS and FedEx for domestic packages. You should compare rates between carriers based on package dimensions. For USPS, if the result exceeds 1,728 inches, you must use the dimensional weight. For UPS and FedEx, if the result exceeds 5,184 inches, you pay the dimensional weight.

Domestic is different than International. Here are the current factors:

  • Domestic you divide by 194
  • International you divide by 166

One Inch Can Cost You Big When Shipping Packages

June 17, 2010

In my last post I challenged you to figure out why the USPS was more money for a light-weight residential package weighing five pounds. Congratulations to Steve Foster of the US Post Office. He noticed that the dimensions of my package were 12 x 12 x13, which put it in the category of a Large Package. The USPS charges more for packages that are larger than one cubic foot. So in my case, if that package were just 1″ smaller, it would have only cost $11.76 and the USPS would have been my least expensive carrier. That one inch cost and extra $9.59!

The lesson learned is this: when you are comparing rates and services amongst various carriers, make sure you include the dimensions of the package. Failure to do so will cost you plenty!


What You Don’t Know About Shipping Will Cost You Plenty!

May 16, 2010

When it comes to shipping packages, I am known as the expert (at least in my family). I have been in this industry since 1976—too many years to add up in my head. I can almost intuitively look at a package, guess its weight, and declare what the best carrier and service will be. Who needs rate shopping software?

So, when my wife asked me to ship a “care” package to our 25 year old son in South Carolina, I knew the best way to ship it. I made the following assumptions:

  • The package was light—weighing 5 pounds.
  • It was being shipped residential.
  • It was going a relatively short distance, from New York to Charleston (as compared to a zone 8 which would be cross country).

So, based on what you know about shipping, which carrier would you choose?

My choice was the US Post Office. We all know that the USPS is the best way to ship light-weight, residential packages; right?

I went to www.usps.com and selected the option to calculate postage. Here are the results:

Can you imagine that I was shocked! I couldn’t believe that this package was $20! So, I did the next thing a savvy shipper would do, I went to www.fedex.com to compare rates. Here is what I found:

My cost was $11.86 with FedEx Home Delivery for the same level of service as USPS Priority Mail at $19.50 (with my discount for paying for postage electronically).

I saved $7.64 or 40% by choosing the carrier that I assumed would be more expensive!

Now, my dear readers, who can figure out why this happened? Please comment your thoughts on why the USPS was 40% more for this light-weight residential package. In my next post, I will share the answer. There was a reason my assumption was wrong.

In the meantime, don’t assume that you know because what you don’t know about shipping, could cost you plenty!


Save 38% on USPS Priority Mail Flat Rate Boxes

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 mark.taylor@myshippingcoach.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!

Jay Eichler
The Ultimate Thomas Store


What is the Cheapest Way to Ship a Package?

February 7, 2010


What is the cheapest way to ship a package? It all depends.

I received the following email from one of my readers. Thank you, you have raised some very good questions. Read my response below in blue:

I invite any of you with questions to email me at mark.taylor@myshippingcoach.com. I may not be able to get back to you for a few days, but I read all my emails and respond.

I stumbled upon your blog and I’ve got to say, it is very helpful.  I am a new Ebay seller and am new to this whole shipping business.  I was wondering if you could answer a question for me.  I use USPS for my shipping; I’ve found it to be cheaper than FedEx and UPS. Priity Mail Flat Rate Options

 

 

  Price Size
Priority Mail Flat Rate Envelope $4.90 12-1/2″ x 9-1/2″
Priority Mail Small Flat Rate Box $4.95 8-5/8″ x 5-3/8″ x 1-5/8″
Priority Mail Medium Flat Rate Box (FRB1) $10.70 11″ x 8-1/2″ x 5-1/2″
Priority Mail Medium Flat Rate Box (FRB2) $10.70 13-5/8″ x 11-7/8″ x 3-3/8″
Priority Mail Large Flat Rate Box (Domestic Addresses) $14.50 12″ x 12″ x 5-1/2″
Priority Mail Large Flat Rate Box (APO/FPO Destinations) $12.50 12″ x 12″ x 5-1/2″
Here is the priority mail flat rate prices.  What if I want to use my own packaging or some of their other boxes not on the list, such as their shoe box?  How will I know how much it is going to cost?  It is based on weight?  Basically, I just want to know how USPS determines shipping costs.   And, do you have any tips to get the lowest shipping price possible? I ship mostly clothing and shoes, not anything that would be too heavy.  I would like to get them shipped at the lowest possible price.  How can I do that with USPS? Thank you so much!!!

The cost to ship a package depends on the weight, zip code, and dimensions, among other factors. For USPS you can ship in your own box, or in a Priority Mail box that you can get for free. Priority Mail Flat Rate Boxes can be the best way, but not necessarily. It all depends. Let’s look at a few examples:
  • You have a 2-pound package that is shipping to a zone 2 (someplace close). If it fits into the Priority Mail Small Flat Rate Box, you can ship it for $4.95. BUT, if you put it in another box, it would only be $4.90. If you used the bigger Priority Mail Large Flat Rate Box, you could pay $14.50—way more money!
  • If you have a 5-pound box, the rating becomes more complex. For a Zone 5, you would pay $11.76. It would be cheaper not to use the Priority Mail Large Flat Rate Box. But the same package going to Zone 8 (cross country) would be $16.37, so it would be cheaper to the Priority Mail Large Flat Rate Box. Now, I could ship that same box with FedEx Home Delivery for $10.59 and save $5.78 with the rates I get from FedEx (email me and I will tell you how).

The bottom line is this: no carrier is the cheapest carrier for every kind of package. The USPS does a great job and is the cheapest for package shipping to residences that weigh less than 2 pounds. My advice is to compare carriers and services.


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

January 31, 2010

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!

January 30, 2010

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 2nd 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 2nd 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%.


Christmas Shipping Deadline is Wednesday or Thursday

December 19, 2009

A Christmas Shipping Poem

By Mark Taylor

“Tis a week before Christmas and all through the house,

not a creature was stirring, not even a mouse.

The procrastinators know that there is plenty of time,

to get their gifts shipped and everything will be fine.

If they wait until Wednesday, two days before,

they can ship via USPS Express Mail and their gift will arrive at the door.

And for those who are willing to pay $12.50 more,

The USPS will take packages for Christmas, the day before.

But procrastinators be warned that not all destinations will be served,

and you need to drop off your package before noon or you might be nerved.”

In order to be certain, make sure you call, 1 800-ASK-USPS.

For UPS and FedEx the last day for shipping is Wednesday, December 23. Make sure that you use a service that provides delivery for the next day to the zip code you are shipping to. The last day for delivery is Thursday, December 24.

Many people have asked, what is the best carrier or the best value for shipping their presents. My answer is that it depends. It is variable based on how far away the recipient is, the weight of the item, and whether or not the delivery is to a home or a business (among other factors). If you don’t have a discount with a carrier, are shipping to a residence, and your gift if less than 10 pounds, the USPS is probably your best choice. Make sure that you check out their flat rate boxes. And if you ship online using Click-N-Ship or a PC Postage provider like www.stamps.com or www.endicia.com, you can get a discount on some services like Express mail and free Delivery Confirmation with USPS Priority Mail.

To give you a sense of the difference in price, let’s say that you have a 10 pound gift that you are sending to a residence from New York NY to Beverly Hills CA.

UPS Next Day Air by 10:30 will cost $97.32

UPS Next Day AirSaver by the end of the day will cost $87.78 (source www.ups.com retail rates)

USPS Express Mail $58.40 at the Post Office or $55.48 online.

USPS Priority Mail Large Flat-Rate Box is $13.95 at the Post Office or $13.50 online (source www.usps.com)


USPS Announces 2010 Price Reduction!

November 7, 2009

It is hard to believe but true, the US Post Office has announced that effective January 4, 2010 that it will reduce the price of a domestic Priority Mail Flat Rate Envelope from $4.95 to $4.90! Now a nickel is not a lot of money but it is better than an increase. Sure, some prices are going up—an average of 3.3% for Priority Mail; however, let me highlight some areas that you can save on shipping that are unique bargains in this upcoming change.

The USPS has three pricing levels: retail, commercial, and commercial plus. The first thing that everyone should know about the shipping industry is this: never pay retail. Retail pricing is for people that don’t know how to qualify for a discount. My objective of this blog is to educate so that you can save. With the USPS, you can get the first level of discount by simply using your computer to ship a package. You can do this for free at www.usps.com by simply signing up for Click-N-Ship. The savings are significant. Instead of $4.95, you pay only $4.75 for a Flat-Rate Envelope AND you get Delivery Confirmation for FREE, saving you $.70 compared to buying it at the Post Office. That is a savings of 16%. Online prices, on average, are 5 percent less than retail for Express Mail and 5.7 percent less for Priority Mail. Online savings for international shipping is 10 percent less than retail for Global Express Guaranteed, 8 percent less for Express Mail International and 5 percent less for Priority Mail International.

If you ship higher volumes, you can qualify as a commercial shipper by using PC Postage with through any other qualified PC Postage provider such as stamps.com or endicia.com for a monthly fee. Many other third-party providers embed PC Postage in their solutions.

If you are a high volume shipper, shipping over 100,000 pieces a year or 420 a day, the rates are even better and there are a couple of new bargains: a Priority Mail half-pound price, starting at $4.22 for a Zone 2 delivery and a new Priority Mail Flat Rate padded envelope for $4.95, measuring 9.5 x 12.5 inches will be available exclusively for Commercial Plus shippers.

Knowledge is power!


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