It's no secret that the cost of shipping impacts a brand's bottom line. For direct selling organizations especially, the cost of delivering product to a distributed network of consultants is a major line item. The secret is that you're almost certainly paying more than you have to. Here's the inside scoop, along with proven, effective ways to get better shipping rates--without impacting the recipient's experience.
1. YOU'RE NOT GETTING THE BEST AVAILABLE RATES
Fed Ex, UPS, and other shippers routinely charge different rates based on volume. Even if you’re shipping thousands of orders per month, it’s unlikely that you alone can move the massive quantity of product necessary to access the lowest available shipping rates. What the shipping companies don't want you to know is that you don’t have to be the size of Amazon to access their best rates. Solution: Choose a fulfillment provider with a large customer base and the industry expertise to negotiate extremely aggressive rates, and ask them to pass the savings on to you.
2. ZONE SHIPPING IS KILLING YOU
All of the major shippers tie their rates to shipping zones. They love to deliver your product to distant zones, because they get to charge you up to 25% more than if you were shipping within one zone. If your distribution center is located in Florida, you’re paying way too much on shipping to Oregon and Canada. What the shippers will never tell you is that it may be cheaper for you to centralize your distribution location than to keep paying the higher rates. Solution: A centralized distribution center in a location like Texas ensures that domestic shipping is never more than five or six zones away, and reduces the average number of zones shipped overall.
3. ZONE SHIPPING CAN BE YOUR FRIEND
What’s better than never shipping more than six zones away? Never shipping more than four zones away, of course! An order fulfillment company with a significant warehousing footprint can offer a multi-distribution center model that ensures your product is always close to its intended destination. Maintaining inventory in California, Texas, and Virginia, for instance, allows you to nearly always ship from a nearby zone, which also improves speed of delivery without increasing cost. The multi-distribution model is especially effective for organizations expanding internationally, as it permits shipping from the nearest coast.
4. SPEED IS NOT THE HOLY GRAIL
In the retail world, fast shipping is often considered the holy grail of impressive customer service. Shipping companies love to maintain the illusion that speed is critical, but the fact is that customers are often happy to wait a little longer for the right products and brand experience. In most cases, other factors are significantly more important than speed of delivery. This is especially true in the direct selling world, where anticipation is part of the fun of the experience. Instead of focusing on overnight or even 2-day shipping, successful direct selling organizations focus on delivering a wow-worthy consultant and customer experience that is worth the wait.
Understanding exactly how speed of delivery impacts customer experience—and how it doesn’t—can empower your organization to tailor shipment options to dramatically lower overall cost. Then you can explore creative options like Fed Ex Smart Post, where Fed Ex picks up and sorts but USPS executes the miles and delivery. Fed Ex Smart Post can reduce shipping costs by as much as 50% without impacting customer experience.
5. A SPENDING ANALYSIS IS YOUR SHIPPER'S WORST ENEMY
Many companies are shocked at what they find when they look closely at their order fulfillment and shipping numbers. A spending analysis often reveals easy cost savings opportunities, and opens the door for deeper changes with significant long-term benefits. It also creates a baseline for comparison to see how your cost savings efforts measure up to expectations.
If the idea of an in-depth spending analysis seems overwhelming, find an experienced logistics provider to guide you through and model your savings options. The right partner will help ensure you’re comparing apples to apples and accurately measuring your potential savings. Ask for a bottom line savings calculation that demonstrates a ballpark monthly figure that you will save by following their recommendations.
Find out how much you can save: Contact us today.