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Our Business Is Being The Successful Extension Of Your Business

How Long Does Switching Fulfillment Companies Take?

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Switching fulfillment companies is a pain point that most eCommerce companies don’t take lightly. Changing logistics operations or adding a new 3PL partner costs staff time and freight and can lead to delays in order processing if not done correctly. […]

By: Geoff Whiting
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pick and pack fulfillment
By: Nikki Sneed

How to Ship Musical Instruments

Some items are easy to ship, and some are not. Musical instruments rank high on the list of things that are challenging to pack and ship correctly. When you ship musical instruments, you must consider more than the best way […]

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By: Alex Selwitz

What Is Shipping Insurance and Do I Need It?

When eCommerce businesses start shipping orders, they may add shipping insurance on every package. That’s an excellent practice for new online retailers, but you might not need to purchase that insurance (or as much coverage), depending on what you sell […]

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e-bike delivery doesn't have to be on foot when you learn how to ship an electric bike
By: Geoff Whiting

How to Ship an Electric Bike

Sales of e-bikes have taken off in recent years and show no signs of slowing down. If federal legislators take up another push to offer rebates and credits, many more people may adopt this excellent form of green transportation. However, […]

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By: Alex Selwitz

How to Sell on Amazon: The Complete Guide

Amazon is an online marketplace used by millions of people globally. From clothing to electronics to toiletries, you can find almost anything on Amazon.

Wondering how you can get in on the action? All you need is a small monetary investment to get started and the knowledge of how to run a successful listing.

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glass vase
By: Geoff Whiting

How to Ship Fragile Items

There is almost nothing that can’t be ordered online and shipped to customers. ECommerce companies have taken over product categories once reserved for brick-and-mortar stores because they were considered too hard to ship. Businesses now routinely ship heavy and large […]

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golf clubs
By: Alex Selwitz

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 […]

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Red Stag Fulfillment optimized our processes throughout COVID to perform better.
By: Geoff Whiting

What Is Volumetric Storage?

Innovative eCommerce fulfillment providers have been looking for better ways to measure and charge for warehouse storage. A volumetric storage model accurately measures the space your goods actually use, so the industry is moving toward this more precise method for […]

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how to ship a painting
By: Geoff Whiting

How to Ship a Painting

Great artwork should be seen and celebrated every day, especially if it’s a piece you’ve created or fallen in love with and purchased. If you live far away, want to take your art with you, or want to start an […]

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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.

  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
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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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