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.
Business Integrations

Order Fulfillment for CommerceHub

Successful eCommerce fulfillment is a study in complexity. Your supply chain may include multiple suppliers, 3PLs, and delivery companies. Reaching consumers requires an omnichannel approach. That means selling on platforms and marketplaces, your own website, and in-store retail or wholesale […]

Media Fulfillment 101: Here’s What to Know

Almost everyone has a favorite artist, author, movie, book series, CD, or a favorite something they enjoy time and again. Companies like yours that sell these hallmarks of fun and culture know how fussy these customers can be, especially when […]

kitting

Kitting Logistics Definition

Kitting logistics is an eCommerce fulfillment process for pre-assembling individual items into kits to make fulfillment faster and easier. Warehouse kitting is a service that some 3PLs offer. However, many eCommerce entrepreneurs don’t know they can take advantage of it. […]

slow-moving inventory audit

Are You Using the Best-Fitting Order Fulfillment Software?

When you founded your business, started selling, and created a plan to scale, picking fulfillment software probably wasn’t anywhere on the to-do list. Fulfillment operations are a less glamorous side of eCommerce, but wholly essential to your success. That means […]

How 3PLs Make Marketing Your Business Easier

For many businesses, the partnership with a 3PL provider ends with picking, packing, and shipping your products. For others, it can simply be for storage. But, a lot of businesses forget that a 3PL partner can help you focus on […]

Warehouse inventory turnover ratio

Supply Chain KPIs for ECommerce Success

Successfully running an eCommerce company is much more difficult than it seems at first glance — especially when you’re rapidly growing and in need of seamless, accurate eCommerce fulfillment. Whether you’re self-fulfilling or working with a 3PL, it’s important to […]

Red Stag net promoter score

How to Get Started Working with Red Stag

Delivering the perfect unboxing experience to every customer every time is never as easy as seems for an eCommerce company. Whether you’re fulfilling orders yourself or relying on a fulfillment partner, there are far more steps, processes, and possibilities for errors […]

same-day fulfillment

On Time and In Full (OTIF): An Essential ECommerce KPI

Tracking key performance indicators is a terrific way to assess your eCommerce fulfillment. One essential eCommerce KPI is OTIF: on time and in full. Your OTIF rate can highlight problems with your pick and pack processes so you can correct […]

fulfillment report card final grade

2021 Fulfillment Report Card: How Would You Rate Your 3PL

How would you rate your current fulfillment solution? Now that eCommerce companies have finally managed to dig themselves out of the holiday sales boom and increased holiday returns deluge, this month is a perfect time to look at an operations report card for 2021, especially the holiday season.

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