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premier fulfillment warehouse

Premier Fulfillment: Find a Next-Level Partner

With premier fulfillment locations and services covering 99.7% of the continental U.S. in two days, Red Stag Fulfillment’s partners have an easy time keeping customers happy. We’re designed to keep your costs low while saving time on inventory processes. That […]

ship furniture with us

Ship Furniture Easier With a Reliable Partner

For many eCommerce companies, figuring out how to ship furniture safely and affordably is their biggest supply chain challenge. Done wrong, and it can grind profits down to nothing. Done right and fulfillment can become a competitive advantage that protects […]

global order fulfillment

Global Order Fulfillment Strategies

Your eCommerce fulfillment plan probably covers the most significant pain points for your business. It keeps your inventory management lean but uses demand forecasting to ensure that your most popular products are rarely backordered. You use national fulfillment center locations […]

third-party logistics

16 Questions To Ask Your Next 3PL Provider

As your eCommerce business matures, at some point, you can no longer handle your order fulfillment in-house. You need to find a 3PL provider and outsource your fulfillment.  If you are asking, “What is a 3PL?”, then we have an […]

nationwide fulfillment locations

What’s Your Nationwide Fulfillment Solution?

Every eCommerce company needs a robust nationwide fulfillment solution because customers don’t care where you or your warehouses are based. They want fast, reliable shipping to their home and won’t give your location a second thought as they add things […]

Open Job Fair for Red Stag Fulfillment’s Knoxville Warehouses

The warehouse fulfillment provider has more than 130 job roles to fill and will be hosting open interviews on-site during the fair.   Red Stag Fulfillment is a third-party eCommerce fulfillment company with expanding warehouses in both Knoxville, TN, and Salt Lake City, UT, and a new fulfillment campus […]

scale to measure efulfillment companies

The Impact of Product Size and Weight in EFulfillment

Are you paying more than you should for eFulfillment services? If you work with an eCommerce fulfillment company that isn’t optimized to handle products the size and weight of yours, you are probably paying too much. When most eCommerce companies evaluate eFulfillment outsourcing options, […]

Nicole McKinsey is an Account Manager at Red Stag Fulfillment

Employee Spotlight: Meet Nicole McKinsey

Take a few minutes to get to know Nicole McKinsey. Nicole joined Red Stag Fulfillment in 2020 and is an Account Manager for the Client Relations department. While she is headquartered in our Knoxville office, Nicole serves potential clients from […]

omnichannel fulfillment

Omnichannel Fulfillment vs. Multichannel Fulfillment

Most eCommerce businesses sell on multiple eCommerce platforms. You might have a website or a Shopify store, list products on Amazon Marketplace, sell on Facebook, and also sell in brick-and-mortar locations. If you take a multichannel approach to sales, your […]

central fulfillment capabilities

Can You Afford Not to Have a Central Fulfillment Strategy?

Logistics news often focuses on coastal port delays and northern rail congestion, leaving out the reliability of central fulfillment operations that can reach your entire U.S. market. We think that overlooks some of the most significant potential time- and cost-saving […]

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.

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