We're a third party fulfillment provider that approaches things a little differently.

Our business is being the successful extension of your business.

Enter your email below and we'll keep you up to date with the latest industry news, trends, and our growth, delivered right to your inbox.
sofa

How to Ship Furniture

Nothing is off-limits for eCommerce today. No product is too big or too delicate to ship. Modern logistics can solve any eCommerce fulfillment challenge. That includes how to ship furniture.  Wayfair and others have built thriving businesses selling furniture through […]

Answering Your Questions on Amazon FBA Fees for 2020

As ecommerce businesses grow, they often turn to 3PLs or Fulfilled by Amazon (FBA) to handle the orders, packing, shipping, and returns that occur as a natural part of operating. FBA is popular for Amazon sellers because it has the […]

golf clubs

How to ship golf clubs

It may be hard to imagine packaging and shipping something as big and awkwardly shaped as your golf bag full of clubs. However, people do it every day, and it’s simpler than you might think. Here’s our guide on how […]

fulfillment

What Is Dunnage and Why Do You Need It?

Dunnage is a common logistics term that’s slowly making its way to the ears of ecommerce businesses and regular consumers, but there’s still a bit of confusion around the term, what it includes, and why it’s likely valuable to your […]

oversized package shipping

The Cheapest Way To Ship Large and Oversized Packages

Ecommerce is an indispensable part of almost every retail business. Even if you have brick-and-mortar stores, giving your customers an online option will increase sales. However, for eCommerce businesses that sell large or heavy products, shipping can be expensive. Fortunately, […]

online business license

Do I Need an Online Business License?

When you start a brick-and-mortar business, you get a business license from the city or county where your operations are headquartered. So, when you start an eCommerce business, do you need an online business license? The answer to that question […]

Guide to Discreet Shipping

A standard packaging method for ecommerce business is “discreet shipping,” where no one can look at the outside of the order you ship and determine what’s inside. Discreet shipping hides any idea of what the products inside could be and […]

Delivery

FedEx, UPS, and USPS Delivery Times

ECommerce businesses need their packages delivered efficiently, quickly, and cost-effectively. In the US, that usually means using one of the three major carriers: FedEx, UPS, or USPS. Each carrier offers a range of service levels and rates. Delivery times are […]

Dimensional Pricing

What is dimensional pricing? Will it be the end of your business?

On January 2, 2015, FedEx and UPS changed how they will price shipments. We detail how this could greatly increase shipping costs for e-retailers and other businesses that use companies like FedEx and UPS to ship their products.

In addition, we breakdown why the carriers are making the change and provide examples of how the new calculations work.

Lastly, we provide possible solutions for companies that would like to reduce their shipping costs and help minimize the impact that could come from dimensional pricing.

Transcript

  1. Will It Be The End of Your Business? WHAT IS DIMENSIONAL PRICING?
  2. How does pricing work now? The historical way for calculating costs to send a package was based on a very simple method; Carriers use a table that assigns a “base rate” for every combination of weight (1-150 lbs.) and distance (Zones). The heavier the package and/or the farther you ship, the more it costs. Other surcharges and fees are then added to the base rate as they are applicable (E.g. fuel surcharge).
  3. Does it work? Historically, this pricing structure was ideal because transport trucks could use these same variables in their formulas to calculate transportation costs, and therefore determine the profit margin for each truck transporting goods.
  4. What is dimensional pricing? In other words, many of the lightweight packages you ship today could see A BIG INCREASE IN COST!!! Every package you ship will now have two weights – actual weight and dimensional weight. The larger of these two will be used to calculate the cost of your shipment (Height x Width x Length) Dimensional Factor* = Dimensional Weight * The standard Dimensional Factor that UPS and FedEx will use is 166
  5. Why the change? The convenience of online shopping with in-home delivery, has resulted in an increase in the number of lighter weight packages in bulkier boxes being shipped to homes across the world. Consumers now purchase bath robes and teddy bears online! Bigger boxes take up more room in a truck; so less space and less weight = less revenue per truck for the carriers.
  6. How will this affect my shipping cost? 3 lbs. x Zone 8 $9.84 Base (Daily Pickup) Rate 3 lbs. package shipped in a 12” H x 12” W x 18” L box From: Knoxville, TN (ZIP 37923) To: Reno, NV (ZIP 89501) TRADITIONAL (12 x 12 x 18) / 166 = 15.6 lbs. 16 lbs. x Zone 8 $18.86 Base (Daily Pickup) Rate DIMENSIONAL
  7. 3 Questions to Consider What will my margins be if I eat the cost? If I pass this cost on to my customer – how many will I lose? Will I still be in business 1 year from now?
  8. Solutions Take the Air Out Negotiate your dimensional factor Find a partner with negotiating power (E.g. a 3PL)
  9. Take the Air Out Deliberately engineer packaging to remove as much “air” as possible. If additional packaging is added when preparing to ship, educate your packing team on the effects of their decisions. This should be the first step for any company looking to avoid large dimensional weights You might be surprised how much opportunity there is
  10. Negotiate Dimensional Factor Larger Dimensional Factor = Smaller Dimensional Weight = Less Effect on Your Business Must negotiate with each carrier you use (i.e. FedEx and UPS) There are no guaranteed outcomes Shipping Revenue = Power
  11. Find a strategic partner Quality 3PL fulfillment operations minimize effect to their clients Strategic Partners help with these various strategies Examples: Negotiating power with Carriers Package consolidation Packaging engineering
  12. FOR HELP REDUCING COST OF DIMENSIONAL PRICING 800.815.STAG (7824) info@redstagfulfillment.com www.redstagfulfillment.com

We know what it's like searching for a fulfillment partner...

We've been there before! Red Stag Fulfillment was born out of necessity as the sister company to support a fast growing ECommerce business. You can read more about the story of our development here.

Our business is being the successful extension of your business, and a big part of that is providing tools to help you evaluate us, and other fulfillment companies. That's why we openly share our Fulfillment Provider Questionnaire, as a tool for you to use when selecting your fulfillment partner.

Download a blank questionnaire, or the questionnaire with our answers for your own internal use.

Getting started is simple

Your stuff icon

Send us Your stuff

Your orders icon

Send us Your orders

Give us 30 days icon

Give us 30 days to impress you

Take the first step
Start your no-obligation
30-Day Risk-Free Trial