When deciding to ship, you’ll need to evaluate the services of different carriers, such as UPS, FedEx and the U.S. Postal Service. Some businesses use a combination of shipping services. The Beecher Group—a distributor based in Des Moines, Iowa—uses UPS primarily and a regional carrier as a secondary option for nearby orders. UPS has the benefit of being organized, competent and reliable, says The Beecher Group vice president Alan Beecher, and is available to serve the entire country—including Alaska and Hawaii—while offering package tracking. International orders are also accepted, but restrictions against hazardous goods—such as peroxide, bleach or aerosol products—prevent them from being shipped by air; they must be transported with ground shipping.
Barry Botchko, who works in shipping for Bay Cities Beauty in Santa Monica, California, notes that UPS pickups occur daily at his company, while FedEx or USPS orders can be filled if the customer specifically requests that method. His company ships only to the contiguous United States due to customs and expense issues; and c.o.d orders incur an additional $20 charge, paid for by the customer, because UPS charges a fee. For non-c.o.d. orders, a flat rate of $9 usually applies.
Reed also prefers UPS for its tracking system and convenience, though she is considering other options for greater savings. “From a customer perspective, we want to offer more USPS shipments, but they’re hard to track, and if the package is lost, the reimbursement process isn’t as great as with UPS,” notes Reed. Uncle Funky’s Daughter offers international shipments, but the company informs the customer that duties and taxes may apply to get the products into the country and shipments may get held up slightly at customs. The company’s shipping rates are the UPS fee without any additional service charges, but the company will periodically offer shipping specials throughout the year to reward customers.
Three Custom Color Specialists offers shipping through USPS, FedEx and UPS, though priority mail from USPS is considered most cost-effective. The company ships worldwide with free priority-mail shipping in the contiguous United States for orders of $75 or more, and a $7 credit on shipping for international orders of $75 or more. “[USPS] mail is really the way to go, but we offer the other services because some customers like to be able to see exactly where their package is en route, and [USPS] doesn’t offer this service at the priority-mail level,” explains Catto. “The cost difference is vast, and the service is very reliable. Plus, UPS and FedEx add fuel surcharges and extra fees to ship to residential addresses versus business addresses, which really add up. USPS charges a flat rate, so there are no surprises.”
Esposito also uses the trio—USPS, UPS and FedEx—for orders. Over the past five years, the company has promoted $1 shipping for orders more than $50 and $5 shipping for orders less than $50. Shipments to Canada are charged a $15 flat rate, with a $35 flat rate for the remainder of the world—not including any duties the customer may incur from the local government upon delivery. Esposito has found that using a combination of the three most popular shipping services allows him to get products out to customers as quickly as possible, because each entity has a different pickup schedule. “Carefully weigh out your shipping charges. We spend a fortune on shipping charges, as our flat-rate models are way below the actual costs,” explains Esposito. “However, because we don’t discount any products sold through our company, we look at these charges as pure marketing dollars.” He adds that companies should make sure they’re shipping within the guidelines, not delivering prohibited items by air. If issues arise with the shipment, you could find your store in some very expensive hot water.
Whatever shipping service(s) you decide to use, do your research beforehand and listen to your customers’ needs. After calculating the shipping costs associated with your orders, you’ll be able to price your shipping fees fairly and ensure that you’re not losing a significant amount of revenue in the process.