We’re A Third Party Fulfillment Provider That Approaches Things A Little Differently.

Our Business Is Being The Successful Extension Of Your Business.

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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
Shipping containers
By: Jake Rheude

Building a Resilient Supply Chain

When the coronavirus pandemic hit Asia in early 2020, many businesses experienced major supply chain disruptions. This highlighted the need for companies to build resilient supply chains. Now, more than ever, it’s essential to make your supply chain resilient to […]

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Inventory turnover ratio
By: Jake Rheude

Understanding Inventory Turnover Ratio

Your company’s inventory turnover ratio is an important metric. A simple inventory turnover formula can help you understand and improve your inventory management. When you get clear about your inventory turnover ratio, you can run your business with smaller carrying […]

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handling returns during the pandemic
By: Jake Rheude

ECommerce Returns During the Pandemic

The novel coronavirus pandemic has brought an influx of customers to online retail. Online sales were up 76% in June 2020 over 2019. That is good news for eCommerce businesses. However, many are facing challenges in dealing with returns during […]

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warehouse inventory
By: Jake Rheude

How to Calculate and Reduce Inventory Shrinkage

There are many terms for inventory shrinkage: warehouse shrinkage, product shrinkage, loss of product. They all amount to the same thing — your merchandise is missing from the warehouse shelves. For businesses that sell physical things, some amount of shrinkage […]

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Reverse logistics solutions
By: Jake Rheude

Ultimate Guide to Reverse Logistics

In an ideal world, your eCommerce would have a return rate of zero. However, returns are unavoidable when you sell online. That’s why you need a robust reverse logistics operation. Return rates for eCommerce shops are more than double the […]

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FBA alternatives
By: Jake Rheude

Cross Docking for Backorder Management

You might not have heard of cross docking, but it just may be the solution to your eCommerce fulfillment problems. This is a time when many online retailers are facing difficulty in keeping products in stock. Cross-docking can help your […]

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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

Don't Just Take Our Word For It

See What Our Partners Have To Say

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Red Stag has been a part of our eCommerce story since we first sold online, and we’ve grown together.

The Original Oatly

Owner, CEO

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As a partner, I take them for granted now. That reliability - it’s one less thing to worry about.

Pop-A-Shot

Owner, CEO

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We don’t have to worry about anything with RSF. We can’t ship our big, heavy D2C packages without them!

Lori Beds

Founder, CEO

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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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