Are You Competitive with Your Shipping Rates?
October 27, 2008 by Pablo Palatnik
One of the key factors in the success of your website (sales based) will be your shipping rates which is one of the MOST competitive factors you have against your competitors.
With gas prices increasing (although now they are decreasing but we’ll see how long that last) shipping rates have gone up for everyone within the past year and 1/2. Almost everyone. Let’s look at some of the big online retailers who are raising shipping rates.
(This data is taken from the magazine internet retailer)
Amway/Quixtar: Rates for orders of $120-$750 went up between $.80 and $2.00.
Backcountry.com: Raised rates on expedited orders.
L.L. Bean: Their rates are based on a tier system and each tier was raised by $1.00.
Peapod: They added surcharges and about $1.50 at current gas prices.
Recreational Equipment: Raised about $1 on most orders.
UPS announced they will raise shipping rates in 2009 by 5.9% on the ground and 4.9% in the air. The formal rate increase for air and international shipping is 6.9%, but the world’s largest package deliverer will lower its fuel surcharge by 2%.
Fedex is also increasing shipping rates as a press release noted, “…FedEx said its Express rates would increase by an average of 6.9 percent for U.S. and U.S. export services, effective January 5, 2009. FedEx added that the rate increase will be partially offset by adjusting the fuel price at which the fuel surcharge begins, reducing the fuel surcharge by two percentage points.”
Companies such as Zappos, Overstock, and Buy.com are staying put without raising any shipping fees to their customers which is probably the best bet to try and keep as much business as possible.
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Comments (1)
Thank you for posting this.
Each year the major carriers increase rates. In most cases they may scale back one or more surcharges; however, watch for the surcharge to increase later. Also most shipping discount % plans don’t apply to surcharges.
If you are looking for real shipping cost savings you should store inventory closer to end buyers. If you sell internationally, move a small amount of inventory into the international market.
http://www.shipwire.com makes this easy to do. We offer warehouses in the US, Canada and the UK. We even offer a free trial of any warehouse that gives you great shipping tools and custom shipping label printing features you can use free forever.
http://www.shipwire.com/trial