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New Guide Helps Sellers Cope with Higher Cost of Shipping

We can’t say it enough: online sellers should prepare for the USPS rate changes coming on January 17th. Planning now rather than waiting can help, and Shipping Easy has a new guide to help online sellers make sense of the unprecedented shipping rate changes of 2016.

Shipping Easy CEO Katie May says her company’s larger clients with shipping managers on staff have been planning for the rate changes for weeks if not months. This typically means re-thinking their shipping rules and reconsidering certain carriers and services for different orders and packages.

But small and medium size clients are just coming off of a very busy season and are only just starting to consider the impact, she said. The “eCommerce Seller’s Guide to 2016 Shipping Rate Changes” is designed to help online sellers of all sizes understand the 2016 Rate Changes across USPS, UPS and FedEx.

An additional change impacting some sellers under this month’s USPS rate changes is the elimination of discounts for Click N Ship. We asked May if Shipping Easy was seeing sellers preparing now, or if they will scramble come January 17th.

“For the majority, this will be a scramble,” she said, but the move to retail rates on the 17th will light a fire. “We think this will cause many sellers to reconsider their solution and how to continue getting the discounts they are accustomed to.”

Shipping Easy has seen a slight lift in its FREE, Starter plan since around Dec 10th. The lift is primarily due to former Click N Ship users planning for the 17th and their desire to maintain access to CBP (Commercial Base Pricing) rates which the plan offers.

Just how much volume does a seller have to do in order to make it worth using a paid service versus paying the higher Click N Ship rates?

It really depends on what they ship, May said. “On average, the savings on First-Class Mail is $0.48 when you compare Commercial Base Pricing, which most paid software solutions offer, to Retail Rates (across 1-13oz). So, if they are shipping 30+ packages in a month, it makes sense to consider a paid service. If they are shipping Priority Mail, the savings are much greater on a per package basis, so even less volume would make sense to consider.”

May said there is another factor these sellers should be thinking about: “The time savings of a software solution are a bonus on top of the rate savings.”

What criteria should all sellers be looking at when determining which carrier to use? Should they be open to using more than one carrier?

May said that in general sellers should focus on:

  • Delivery timeframe
  • Package weight
  • Package dimensions
  • Delivery distance
  • Discounts they may have negotiated (or may be able to negotiate) with a carrier
  • Pick-ups and the convenience of access to a given carrier

In addition, some online sellers might value one carrier brand over another, believing it adds to the overall impression of a delivered package, May said.

“Sellers should always consider the entire competitive set when it comes to shipping. It is a significant part of their cost structure and delivery matters. However, until they’re shipping $000s per month, the discounts and headaches of multiple pick-ups (or drop-offs) across multiple carriers might not be worth it.”

Shipping Easy’s “eCommerce Seller’s Guide to 2016 Shipping Rate Changes” summarizes the changes and increases across all carriers, and goes further – tables show the least expensive carrier across a variety of delivery timetables, weights and zones based on the new 2016 rates and surcharges.

What if you have negotiated rates with carriers? May said negotiated rates can easily be substituted in the table for a more accurate comparison.

The guide also features real world case studies featuring ShippingEasy customers.

May suggested sellers take the time this month to really consider the impact of the rate changes on their business. “Our guide was designed to demystify the increases and simplify them for online sellers in particular. It’s worth sitting down with the new rate tables and doing simple math on what it might mean for margins in 2016.”

She said that in some instances, a seller might want to increase prices to cover the greater cost – or at least reconsider shipping costs to buyers. “In addition, being open minded about the strengths of each carrier and leveraging the right services from each.”

You can download the guide on this page of the ShippingEasy.com website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.