How do shipping discounts work?
How do shipping discounts work?
Everyone likes free things, and while discounts will not free, they are close enough. Shipping discounts are a great way to save money on shipping. When used smartly, shipping discounts can increase the sales of a business. RunRex has decided to compile this information that will help your business take advantage of shipping discounts.
Shipping discounts are for businesses
Shipping discounts are not designed for individual shippers that ship a package once a year. So if you are looking for a discount to send that one package at half the cost, then you are not in luck.
Shipping discounts are designed as a tool for the shipping companies to gain more business. Therefore, these shipping companies offer discounts to businesses so that they can be the attractive choice for these businesses.
In general the more volume a business has, the better the shipping discounts. Large businesses that ship thousands of packages each day such as Amazon enjoy huge shipping discounts. One of the reasons for this is that the shipping companies also benefit from operating in bulk since the shipping trucks leave these premises being fully loaded and they don’t have to make any pit stops.
As the shipping volume decreases, so do the discounts. Small businesses can qualify for shipping discounts, but they are usually very low. This puts them at a major competitive disadvantage when competing with big companies. For instance, Amazon affords to offer free shipping due to the huge shipping discounts they receive. Smaller companies, on the other hand, cannot afford to give their clients such offers.
How do I get shipping discounts?
You can get shipping discounts through negotiations or shipping discount programs.
Negotiation
Businesses are built on negotiations. Since both sides have something to gain from negotiating a shipping contract, shipping companies will be happy to negotiate a business contract with your company.
Negotiating a shipping discount with your shipping company is likely to get you a better deal than the generic shipping discounts available in the market. This is because you can factor in other features such as distance and packaging into the deal.
You should lay all the facts that relate to shipping on the table when negotiating a shipping discount. The location of your business and your clients is one of the important factors that you should discuss. You should also evaluate whether it is cheaper for you to make the drop off at the shipping company or have them pick up the packages. All these factors will help you bring your shipping cost down.
Discount program
Shipping companies already have discount programs for businesses set up. The discounts in these programs vary depending on factors such as volume and distance.
The US Postal Service has a discount program called the USPS Business Discount. Under this program, businesses can get shipping discounts of up to 56 percent.
FedEx also has a FedEx Business Discount program where businesses can choose between the Save Now Program of the More Savings Program. The Save Now program works best for small businesses with small numbers of shipment while the More Savings Program is ideal for businesses with many shipments over a long period.
UPS also offers UPS Connect that allows its customers to enjoy up to 20 percent discounts on their shipping rates.
Association and Organizations Discounts
By being a member of an association or trade organization, you might enjoy a shipping discount. These organizations and associations bargain shipping discounts on behalf of their members. The two parties then form a partnership where the shipping company is designated as the official carrier for the association, and in return, the carrier offers discounts on the members shipping rates as well as other additional perks.
eBay Discounts
eBay sellers, can receive shipping discounts from various shipping companies. For instance, UPS offers discounts to eBay sellers of up to 23 percent off for ground rates and up to 25 percent off for international shipments. FedEx offers up to 37 percent off for ground as well as international shipments.
Multiple carriers
Using multiple carriers is a smart business trick used by companies to get the best discounts possible. Carriers have different modes of operation, and most specialize in certain locations. Therefore, you are more likely to get a better discount if you negotiate only for the areas where the carrier is dominant. For example, a carrier that has a strong presence in Mexico will offer you a better discount if you choose to them for shipping your products to Mexico than if you negotiate with them to ship all your products to other countries as well where they are not major players.
Using multiple carriers is not only a factor of geography as you can also get a carrier that will offer you a better discount on ground shipments while another carrier has better rates for air shipments. Carriers also vary depending on how they charge for weight and size. Therefore, if you do a wide variety of shipping to different locations, you should consider using multiple carriers.
