FedEx introduced a new product called One Rate that offers a flat-rate shipping option (see our coverage here). If you sell (or buy) on eBay, you might have seen the ads for FedEx One Rate as you browse the site.
Is FedEx One Rate a good fit for online merchants? Rafael Zimberoff, Product Manager for ShipRush, put it into perspective for those in the ecommerce space. ShipRush is a shipping automation tool that integrates with shipping carriers, marketplaces, listing tools, accounting tools and more.
Zimberoff said FedEx One Rate was a response to USPS Priority Mail flat rate boxes, which he called “a beautiful product” because you get packaging and predictability while eliminating the need to deal with weights and dimensions.
Will UPS jump on the flat-rate shipping bandwagon? Zimberoff believes UPS will wait before launching a flat-rate offering like FedEx One Rate or USPS Priority Mail flat rate until it sees how successful One Rate becomes.
But online sellers should note that FedEx One Rate is not available through the built-in eBay shipping system at this time, Zimberoff advised. “It is only available on FedEx.com, it is not in any third-party system.”
“But remember, the One Rate product is an Express product, not a ground product, so if you look at ecommerce, 98% are ground or higher. One Rate has a very limited application to ecommerce. That said, FedEx.com has built-in eBay integration now. So there are things you can find at FedEx.com that you can now do integrated shipping for eBay and some other ecommerce systems there.”
One Rate needs to be handled with caution by ecommerce sellers, according to Zimberoff. FedEx One Rate has tremendous advantages – “with flat rate boxes, you no longer have to think about weights, you no longer have to think about dimensions. It’s a beautiful thing.” However, he said, One Rate is not always less expensive. In comparisons conducted by ShipRush with a shipper’s own packaging, “in most cases it was less, and in some cases it was more expensive.”
The price differences can be large in both directions – 20 to 30 percent. “My advice is if you don’t do much express shipping, it’s not relevant.” But if you do a lot of expedited shipping, make your own spreadsheet comparing the rates, he advised.
Because One Rate isn’t available in third-party shipping systems yet, and because it’s an express service and most ecommerce service is ground, FedEx One Rate has limited applicability today for ecommerce, he said.
He also had tips for online sellers dealing with holiday sales, see Ecommerce Shipping Tips for the Holidays and Beyond in Tuesday’s Newsflash.