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The e-Tail Shipping Trap

Guest post by: Matt Rieker

Article Overview: Many small internet businesses face a dilemma – they are too small to hire logistics expertise, and they don’t have cost effective options to use for their parcel needs.

The e-Tail Shipping Trap

If you own an internet business you have overcome some serious hurdles. Aside from developing your product, lining up vendors, and establishing credit, you have had to determine how to draw traffic to your site, and how to price your products. At long last the orders began coming in. The hard part is over, right? Not necessarily.

Most B2C companies find there are a limited number of partners to turn to when they need a full compliment of parcel shipping options. They also quickly find out that the volume they are shipping doesn’t get them attractive pricing or discounts, and the profits they expected to see from their new revenue stream are being eaten up by transportation costs. Hiring a logistics manager with extensive parcel experience is too expensive for most companies. They don’t have the clout to effectively deal with the large parcel shippers, and they don’t have the time to deal with multiple vendors on a daily basis. Now what?

There are parcel management companies like Lakeside Commerce LLC,that represent shippers like you. They have vast experience dealing with the major parcel shippers, the post office, and even traditional freight carriers. Most importantly, they are not compensated in any way by the carriers. They bring their expertise and their buying power to your company without long term commitments.

What you will find from parcel management companies like Lakeside is that they have already solved the problems you are facing many times. They represent many customers, and therefore have the buying power of pooled volume. They will typically recommend a combination of shipping options that you did not know where available to customers your size and they will have access to much greater discounts than an individual company can negotiate. Perhaps most importantly they can take all of your outgoing parcels and make sure that each of them is routed the most efficient manner possible and you only have one point of contact to manage.

Parcel management companies have different pricing methods that range from flat fee, to a price per shipment, to shared savings. Regardless how the pricing is structured, you should expect to see significant savings in your shipping costs even after paying the fee you negotiate with your service provider. If you are willing to share your shipping data with the service provider they will be able to tell you exactly how much they could have saved your business if you used their routing and rates. This makes evaluating the value of a parcel management company very easy to measure.

There isn’t one answer to the shipping challenges of every e-tailer, but there are people to turn to for help. They probably have a solution that you haven’t thought of and could never manage on your own that will get you out of the e-Tail shipping trap.

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Article Tags: b2c delivery, b2c shipping, ecommerce shipping, logistics consulting, Parcel delivery



Related Forum Posts
Re: E-Commerce Spending Down? - [quote="Kevin":35jt4q4o]In addition, on eBay, the shipping cost can sometimes be free/lower to attract buyer attention, but then the still cost more than another seller who charges more for shipping.[/quote:35jt4q4o] When I sold manga and Japanese "hanafuda" playing card decks on eBay the competition would often offer a lower product price and jack up the shipping and handling so that the total would be more expensive than my "higher priced" items! Shipping weighty products such as mj sets from Japan by Express Mail Service means free shipping is definitely not an option. This year my turnover has been par for the course, except August and September... August was one of the best months ever, September one of the worst! Now we seem to be chugging along at a regular rate again... despite hiking prices to adjust for the strong yen against the ever-weakening dollar.
International Shipping Costs Money! - Here's my perspective on high "shipping" costs, as someone who ships high quality mahjong sets across the globe from Japan... "Shipping" costs amounts to more than just the price you see on the shipping label! (That's why we call it shipping AND handling!) For example, if you want one of my top-end mahjong sets it will cost around $65-$95 to have it shipped to you. About $12-17 of that is eaten up by Paypal transaction charges. The rest goes on Express Mail shipping, and NO I don't offer other methods because they do not offer any security for either party. A set weighing 3-5kg when packed will cost around 5000-7000 yen to be shipped to the USA, more to non EU parts of Europe, and more still to South America. And the dollar is only worth 87 yen on Paypal at the moment (down from 120 yen a few years ago...). I haven't mentioned the cost of getting the sets from the supplier to me, or the packaging costs. I regularly find myself "subsidising" the cost of shipping sets to places like Russia - even though Russia is one of Japan's neigbours! The other day someone wanted to buy three high quality sets but hated the "shipping" cost - so the order fell through. No worries. I don't have time to waste on those who think shipping should be free. International shipping is an amazing service - and an expensive operation! Don't take it for granted.


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