YOUR GUIDE TO
Shipping Best Practices Shipping rates can vary based on a lot of different factors—product types, choice of carrier, order destination, and calculation method, among others. You can expect to see rates vary, but shipping should be a consistent source of profit and not loss.
SOLVE YOUR SHIPPING PROBLEMS Contacting the customer for additional shipping funds
Shipping adjustments should be rare. Not every order will ship profitably. In aggregate, though, shipping should be profitable. Only contact the customer to adjust shipping costs unless it’s an extreme circumstance.
Under-charging products that are bulky, heavy, or have special shipping considerations
On average, 2% of orders will include an item that requires additional shipping fees. In order to cover these, you should: Set a fixed shipping rate specifically for these items.
Aggregate shipping gross profit is lower than desired
An average order gross profit for competitive dealers is $33-35 based on seasonality. To achieve this, you can: Optimize your shipping selection. Often, you can charge customers a lower rate and make more gross profit utilizing USPS. Target an average shipping cost per box of less than $12. Using USPS for the majority of your orders can help with this. (Be aware that some package types don’t ship well with USPS.) SimplePart System-wide Average Profitability by Shipping Carrier
Shipping Carrier
Avg customer order shipping charge
Avg dealer cost per box shipped
Profit per box shipped
USPS
$14.15
$7.53
$6.62
UPS
$18.62
$22.44
-$3.82
FedEx
$20.63
$20.59
$0.04
Target an average customer shipping charge of $17.
A slow shipping turnaround
Streamline your order processing procedures by setting a schedule that works with high order volumes, stock order deadlines and shipping carrier pickups. Negotiate shipping carrier pickup times with all of your carriers. Review and receive orders twice daily—once at the beginning of the day, and once before the stock order deadline—and on Saturdays if you can. Process orders according to your stock order deadline or shipping carrier pickup times.
We can assist you with each of these items. As always, we are available to help you meet your objectives at support@simplepart.com or 1-888-843-0425.