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!

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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%!



UPS 2010 Rate Increase—In-Depth Analysis, Great Links, and How to Get a 31% UPS Discount

December 1, 2009

Attention UPS Shippers: the rates will be increasing on January 4, 2010. Most of you probably know this by now, but what you may not realize is how the rates will impact your budgets for 2010. My friend and colleague, Doug Kahl, wrote a useful analysis for PARCEL magazine which I would encourage you to read, called, UPS 2010 Rates: An In-depth Look.

In a nutshell, UPS Ground UPS Ground service will increase 4.9%. Doug provides an in-depth initial analysis of the 2010 Ground Rates UPS List Rate Increase that you can download. You will see that the lower weights and zones, less than five pounds, go up a little over 6%.

UPS Air and International Services will increase 6.9% in the base rate and will reduce the Air and International Services fuel surcharge by 2%. Doug also provides an analysis of the express services that you can download.

If you would like to see how UPS will compute the fuel surcharge next year, you can download the PDF, Fuel Surcharge Calculation Changes. You can download Doug’s analysis of fuel surcharges here.

Some of the highest increases occur with the 2010 Surcharges. You can download an excel spreadsheet.

The 2010 UPS Rate and Service Guide for Daily Rates is available here for download. You can also see the Retail Rates here.

The difference between retail and daily rates is significant. Retail is $7.05 for a zone 2 one-pound package compared to $4.84 for Daily Rates. You pay 31% more for retail! Nobody that ships regularly should pay for retail. Retail rates are for what is known in the industry as “gift shippers” or consumers. (see my blog on Consumer Parcel Shippers Pay More for Shipping). These are people that only ship once or twice a year and don’t have an account with a carrier.

Here is how to get up to a 31% Discount on UPS:

Discounts are available for shippers; in fact, eBay shippers can get an account with UPS and qualify for the lower daily rates and save 31%. You can find out more about the eBay discount here. So even if you ship a few packages a month, you could save a lot of money on shipping!

 

 

 


Ten Software Features for Internet Retailers Shipping UPS, USPS and FedEx

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. The ability to ship parcels to international locations is essential.
  6. Batch processing is indispensable. Internet Retailers want to be able to produce shipping labels in mass rather than one at a time.
  7. The capacity to have multiple users is significant; this is the first category that may have employees to help in the shipping process.
  8. 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.
  9. 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.
  10. 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.

eBay Shipping Tips

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.