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warehouse provider

蜂鸟电竞数据博注手机版

Warehouse providers offer logistics services including warehousing and third-party fulfillment. Finding the right 3PL warehouse provider for your eCommerce business is crucial to your success because eCommerce fulfillment is your closest contact with your customers. Therefore, you want exceptional order […]

direct-to-consumer fulfillment

Direct-to-Consumer 蜂鸟电竞数据 Guide

Direct-to-consumer (D2C) is a growing trend in eCommerce. Some companies start with a D2C business model, often launching their initial products through crowdfunding. Many brands that sell their products through other retailers have added D2C sales as an additional revenue […]

empty warehouse shelves when starting a 3pl business

Your Total Guide to Starting a 3PL Business

Starting a 3PL business is a challenging, exciting adventure. Get it right, and you can become a master of international shipping and travel, negotiating with companies around the world. Get it wrong, unfortunately, and you’ll quickly burn through revenue and […]

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Everything is getting delivered these days, and that has many eCommerce companies asking how to ship alcohol to see if it can be a part of their growth strategy. In our research, alcohol has some of the more complex requirements […]

carrier facility

What Is a Carrier Facility? Your Complete Guide

After you place an order online, you might get a shipping update that mentions a carrier facility. The notice might say “Arriving at carrier facility” or “Leaving carrier facility.” Here’s everything you need to know about this stage of order […]

Jackson Griffith is an Account Manager for Red Stag 蜂鸟电竞数据

Employee Spotlight: Jackson Griffith

Take a few minutes to get to know Jackson Griffith. Jackson joined Red Stag 蜂鸟电竞数据 in 2021 as an Account Manager for the Client Relations Department. While he is headquartered in our Knoxville office, Jackson serves potential clients from around […]

Shipping CBD

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Cannabis has gone mainstream, and business is, to put it bluntly, booming. As of this writing, marijuana products are fully legal in 16 U.S. states, Washington D.C., Guam, and Canada. Cannabis is legal for medical use and/or decriminalized in another […]

Dimensional Pricing

What is dimensional pricing? Will it be the end of your business?

On January 2, 2015, FedEx and UPS changed how they will price shipments. We detail how this could greatly increase shipping costs for e-retailers and other businesses that use companies like FedEx and UPS to ship their products.

In addition, we breakdown why the carriers are making the change and provide examples of how the new calculations work.

Lastly, we provide possible solutions for companies that would like to reduce their shipping costs and help minimize the impact that could come from dimensional pricing.

Transcript

  1. Will It Be The End of Your Business? WHAT IS DIMENSIONAL PRICING?
  2. How does pricing work now? The historical way for calculating costs to send a package was based on a very simple method; Carriers use a table that assigns a “base rate” for every combination of weight (1-150 lbs.) and distance (Zones). The heavier the package and/or the farther you ship, the more it costs. Other surcharges and fees are then added to the base rate as they are applicable (E.g. fuel surcharge).
  3. Does it work? Historically, this pricing structure was ideal because transport trucks could use these same variables in their formulas to calculate transportation costs, and therefore determine the profit margin for each truck transporting goods.
  4. What is dimensional pricing? In other words, many of the lightweight packages you ship today could see A BIG INCREASE IN COST!!! Every package you ship will now have two weights – actual weight and dimensional weight. The larger of these two will be used to calculate the cost of your shipment (Height x Width x Length) Dimensional Factor* = Dimensional Weight * The standard Dimensional Factor that UPS and FedEx will use is 166
  5. Why the change? The convenience of online shopping with in-home delivery, has resulted in an increase in the number of lighter weight packages in bulkier boxes being shipped to homes across the world. Consumers now purchase bath robes and teddy bears online! Bigger boxes take up more room in a truck; so less space and less weight = less revenue per truck for the carriers.
  6. How will this affect my shipping cost? 3 lbs. x Zone 8 $9.84 Base (Daily Pickup) Rate 3 lbs. package shipped in a 12” H x 12” W x 18” L box From: Knoxville, TN (ZIP 37923) To: Reno, NV (ZIP 89501) TRADITIONAL (12 x 12 x 18) / 166 = 15.6 lbs. 16 lbs. x Zone 8 $18.86 Base (Daily Pickup) Rate DIMENSIONAL
  7. 3 Questions to Consider What will my margins be if I eat the cost? If I pass this cost on to my customer – how many will I lose? Will I still be in business 1 year from now?
  8. Solutions Take the Air Out Negotiate your dimensional factor Find a partner with negotiating power (E.g. a 3PL)
  9. Take the Air Out Deliberately engineer packaging to remove as much “air” as possible. If additional packaging is added when preparing to ship, educate your packing team on the effects of their decisions. This should be the first step for any company looking to avoid large dimensional weights You might be surprised how much opportunity there is
  10. Negotiate Dimensional Factor Larger Dimensional Factor = Smaller Dimensional Weight = Less Effect on Your Business Must negotiate with each carrier you use (i.e. FedEx and UPS) There are no guaranteed outcomes Shipping Revenue = Power
  11. Find a strategic partner Quality 3PL fulfillment operations minimize effect to their clients Strategic Partners help with these various strategies Examples: Negotiating power with Carriers Package consolidation Packaging engineering
  12. FOR HELP REDUCING COST OF DIMENSIONAL PRICING 800.815.STAG (7824) info@redstagfulfillment.com www.redstagfulfillment.com

We know what it's like searching for a fulfillment partner...

We've been there before! Red Stag 蜂鸟电竞数据 was born out of necessity as the sister company to support a fast growing ECommerce business. You can read more about the story of our development here .

Our business is being the successful extension of your business, and a big part of that is providing tools to help you evaluate us, and other fulfillment companies. That's why we openly share our 蜂鸟电竞数据 Provider Questionnaire, as a tool for you to use when selecting your fulfillment partner.

Download a blank questionnaire, or the questionnaire with our answers for your own internal use.

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