3 Ways Business Owners Can Reduce FedEx/UPS Shipping Costs
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Many business owners struggle as shipping costs continually trend upward with no end in sight. How can a non-enterprise sized business shipper cut costs while FedEx and UPS keep increasing their rates (now more than once per year!) and Amazon keeps strengthening their Prime and free shipping promotions? Unless you ship at super-enterprise level volumes, it can be more and more difficult to gain leverage and cut a break with your shipping carriers.
There is some good news! A number of opportunities exist for businesses to save on shipping. They all involve a certain level of investment in time and, to a certain degree, knowledge. Check out these tips on how to offset the rising costs.
Ask(!) your carrier rep for better terms.
As the saying goes, you don’t get what you deserve, you get what you negotiate. Asking your carrier rep to provide you with better terms becomes a powerful, yet forgetful tactic to pursue. FedEx, UPS, and to a certain degree, USPS, are the only three parcel carriers serving the US domestic market. Both FedEx and UPS are in a head-to-head war to get as many customers, and perhaps more importantly, not lose their existing ones.
The crazy part? Upwards of 28% businesses never request a second look. The mere hint of reaching out to one of their competitors will create a higher sense of urgency and keep them on their toes.
Although we have seen a few customers that get updated terms 3-4 times a year, due to the nature of their business and shipping characteristics, we believe an annual ask is sufficient.
Leverage volume discounts through groups.
Companies often belong to a trade association or industry groups. Carriers then work with many of these organizations and provide group discounts that may have better terms than your current terms. Make sure to read the details of the group terms, as some organizations may ask for an enrollment fee or monthly fees. Some of these group discounts are very advantageous; even after calculating any fees, your total shipping costs are lower than your existing terms.
Pro tip: In few occasions, a clause to waive your right to late-delivery refunds may be inserted. Double-check to see if its there, and when possible, ask your association/group to remove it. (We can help with that, too.)