How to Save Money on Mailing and Shipping
By
VendorSeek
How many different issues are you confronted with in running your business? Have you ever been frustrated over shipping costs? You are not alone. Negotiating with parcel carriers and the cost of mailing can be two frustrating components of running a business.
Mailing Tips The following procedures can help you save money on mailing costs:
- Presort the mail for discounts based on the volume and the density of Zip Code
- Barcode your mail.
- Be meticulous in watching the weight of your mail (a difference of one-hundredth of an ounce will cause you to pay the next higher rate).
- Use standard envelopes.
- Use legal-sized stationary for promotional mailings. Perforating the bottom part of the parcel where the customer's name and address is shown can be pre-printed. It can now become a reply form. - Eliminate duplicate addresses in your files.
- Large companies sometimes have their own courier service and are willing to share the service in order to lower the costs.
- Consider outsourcing large mailings. This offers faster results, postage discounts, and help with designs.
- Do not use staples or fasteners. They can get caught in postal machines and prohibit the mailing from being counted towards lower automation rates.
- Your mailing database should be aligned with the USPS Delivery Sequence File. This contains all addresses listed by the Postal Service. The DSF verifies each address.
Negotiation Tips Negotiating can be complex with parcel carriers.
The following information is meant to help in avoiding frustrating circumstances associated with the process:
- Know the quantities, sizes, weights, applicable surcharges, origins, and destinations for each package shipped. Shippers usually have this information logged in via software. Ask to see calculations based on your shipping activity for a few sample weeks. You can get an idea of what your discount rates can be.
- Certain package characteristics are more attractive to carriers. The carriers are more flexible with discounting high-margin business deliveries than with rural and home deliveries. Ask if changing any "undesirable" characteristics would grant you discounts.
- Shipping prices are based on rolling averages, revenue tiers, cell-by-cell pricing, and net revenue per piece. Understand the carriers pricing policies for each of these factors.
- Shippers often do not realize how susceptible they are to add-on charges. These can include surcharges for fuel, rural delivery, tracking fees, and up to seventy other factors. These factors can raise the cost of the whole shipment considerably. The surcharges are usually billed separately, so it is often hard to assess how much it impacts a company's bottom line. Know the surcharges of the carrier service and what surcharges apply to your individual shipments.
- Completely read and understand the contract terms and agreements. If a service provides a "break" in one area of the contract, make sure to look for them "leveling" the agreement elsewhere. There are certain conditions that may not be conducive to maintaining a decent bottom-line. Know the conditions and the repercussions of the conditions.
- Carriers often will prolong the process in attempts to have a business "give-in." Make sure that your business sets the tempo of the negotiations and everything is well-understood at all times. If there is an area not completely understood, it may cost you a good amount when it would have been advantageous to ask.
- Sometimes shippers offer "portfolio" pricing. This entails the shipper handling all of your shipping needs instead of you dividing your service needs among several shippers. Be careful in accepting this pricing; you may be able to get better pricing by going to several parties for the same shipment despite the "portfolio" rates.
- You don't have to wait until the end of your contract period to renegotiate. If pricing changes, then it is beneficial for you to be compensated in some way so the pricing of the services does not increase considerably. Big parcel carriers will not be as flexible as smaller parcel carriers. The more you know about pricing and the logistics of the service, the better your chances of negotiations ending in your favor.
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