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The ºÚÁÏÃÅ Blog>How to Negotiate Shipping Rates: Tips for Better Price and Service

How to Negotiate Shipping Rates: Tips for Better Price and Service

Posted by Anastasia Prokofieva

One big factor that can really eat into your budget andÌýproduct profits isÌýshipping rates, which can vary greatly from one provider toÌýanother. Sometimes, these unexpected costs can cancel out anyÌýsavings you made earlier inÌýtheÌýmanufacturing process. So, it’s worth knowing how toÌýnegotiate shipping rates toÌýprotect your profit margins.

From dealing with UPS, FedEx, andÌýUSPS toÌýfreight lines, getting theÌýbest deals will require aÌýthoughtful strategyÌý— especially since you don’t want toÌýskimp onÌýkey aspects like service andÌýspeed.

Good newsÌý— this article has all theÌýinfo you need. Keep reading toÌýlearn how toÌýget better shipping rates.

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How toÌýNegotiate Rates with Shipping Lines

The first step inÌýnegotiating rates with shipping lines isÌýunderstanding theÌýmarket landscape. For example, UPS andÌýFedEx hold aÌýsignificant portion ofÌýtheÌýmarket share, creating aÌýduopoly that sets theÌýstandard forÌýpricing.

Since this duopoly accommodates , they set theÌýrates forÌýtheÌýentire industry compared toÌýeach other, not compared toÌýwhat itÌýactually costs toÌýship aÌýparcel.

However, this does not necessarily mean that you have noÌýroom toÌýnegotiate. It’s important toÌýresearch andÌýcompare prices from various carriers toÌýhave aÌýbetter understanding ofÌýwhat isÌýconsidered reasonable.

The great news isÌýthat most shipping carriers follow aÌýsimilar process forÌýnegotiating rates. This means theÌýinformation below can help you with anyÌýcarrier you choose toÌýwork with.

Creating anÌýAccount

The easiest way toÌýsave onÌýshipping isÌýtoÌýcreate aÌýfree account with aÌýprovider ofÌýyour choice. InÌýaddition toÌýenjoying shipping discounts, having anÌýaccount opens upÌýother cool perks like free shipping supplies, scheduling recurring collections, different tracking options, andÌýmore.

IfÌýyou run aÌýsmall business, creating anÌýaccount isÌýaÌýgreat way toÌýstart saving onÌýshipping costs. For example, ifÌýyou want toÌýknow how toÌýnegotiate shipping rates with UPS, their website claims you can save with aÌýfree UPS account.

USP provides more benefits forÌýcustomers who have anÌýaccount

Explore multiple carriers andÌýcompare their perks before signing up. Some provide free package pickup andÌýflat-rate shipping, while others offer discounts forÌýsmall businesses orÌýloyalty rewards forÌýfrequent shippers. Deciding which perks are more valuable depends onÌýyour shipping needs andÌýbudget.

Integrations with Ecommerce Platforms

The ecommerce platform you use forÌýyour online store can also help save onÌýshipping fees. Certain shipping providers, like USPS, integrate with ecommerce platforms toÌýoffer discounted rates toÌýtheir customers. Consider itÌýasÌýifÌýshipping rates have already been negotiated onÌýyour behalf.

Take ºÚÁÏÃÅ byÌýLightspeed, forÌýexample. When using ºÚÁÏÃÅ forÌýyour online store, you not only benefit from discounted shipping rates but also have theÌýconvenience ofÌýprinting shipping labels directly from your ºÚÁÏÃÅ admin.

IfÌýyou’re wondering how toÌýnegotiate shipping rates with USPS, this option might beÌýjust what you need. ºÚÁÏÃÅ sellers inÌýtheÌýUSÌýcan buy andÌýprint discounted shipping rates through USPS, while those inÌýBelgium, theÌýNetherlands, andÌýGermany can utilize Bpost, PostNL, andÌýDHL, respectively.

IfÌýyou are from another country orÌýwant toÌýuse aÌýdifferent shipping provider, you can buy discounted shipping labels using apps from theÌýºÚÁÏÃÅ App Market.

Accessing discounted rates through anÌýecommerce platform isÌýaÌýconvenient way toÌýmanage all aspects ofÌýyour online store inÌýone place rather than juggling multiple accounts andÌýservices.

With ºÚÁÏÃÅ, you can buy shipping labels right where you manage your orders

Shipping Contracts

While theÌýfirst two options work great forÌýsmall businesses, larger sellers may consider signing aÌýshipping contract with aÌýcarrier. This allows you toÌýnegotiate custom rates based onÌýyour specific shipping volume andÌýneeds.

Once you have chosen aÌýcarrier, it’s crucial toÌýunderstand how theÌýnegotiation process works. Typically, carriers will review your shipping history andÌývolume toÌýdetermine your rates. The more you ship, theÌýbetter rates you can negotiate.

ItÌýalso helps toÌýclearly understand your average shipment size andÌýdestination zones, asÌýthis information can affect your negotiated rates.

AÌýshipping contract isÌýaÌýlegal agreement between you (the company orÌýmanufacturer) andÌýtheÌýcarrier (UPS, FedEx, etc.). Depending onÌýyour manufacturing andÌýshipping model, such aÌýcontract will hammer out theÌýdetails ofÌýwhat isÌýbeing shipped andÌýinÌýwhat volume.

For example, aÌýcontract can contain:

AÌýcontract normally covers several items, such asÌýpayment terms, insurance, andÌýliability. Signing aÌýshipping contract can also provide additional benefits, such asÌýdedicated account managers, specialized customer service, andÌýother perks.

However, it’s essential toÌýcarefully consider theÌýcontract’s terms andÌýconditions before signing. Thoroughly review theÌýpricing structure, service level agreements, andÌýhidden fees orÌýsurcharges.

It’s also recommended that you compare multiple contracts from different carriers toÌýget theÌýbest deal forÌýyour business. Don’t beÌýafraid toÌýnegotiate andÌýask forÌýbetter rates orÌýadded services that fit your needs.

More Things toÌýNote When Negotiating Shipping Rates

Now that you know how toÌýnegotiate shipping rates with FedEx orÌýanyÌýother carrier, here are aÌýfew more things toÌýkeep inÌýmind when securing shipping contracts.

Consider Your Business Needs

Carriers have different pricing structures andÌýmay offer discounts based onÌýtheÌývolume orÌýfrequency ofÌýshipments. Consider your business’s shipping needs andÌýnegotiate accordingly.

IfÌýyou typically ship large volumes, you can leverage this asÌýaÌýbargaining chip forÌýbetter rates. OnÌýtheÌýother hand, ifÌýyour shipping needs are more sporadic, focusing onÌýnegotiating better service levels rather than lower rates may beÌýmore beneficial.

Negotiate theÌýContract Duration

Another vital aspect toÌýconsider isÌýtheÌýduration ofÌýtheÌýcontract. Most contracts have aÌýset term, usually ranging from one toÌýthree years. Carefully review this andÌýnegotiate forÌýaÌýlonger term, asÌýthis can often result inÌýbetter rates andÌýmore stable shipping costs.

Learn About Extra Fees

Another critical factor isÌýtoÌýfind out about anyÌýextra fees carriers may charge forÌýovernight andÌýpeak delivery, fuel surcharges, address correction, andÌýeven residential delivery. These assessorial charges can run upÌýsignificantly ifÌýnot considered.

Keep inÌýMind Grace Periods

Some shipping carriers may extend aÌýgrace period ifÌýyour shipping volume isÌýnot yet high enough toÌýprocure attractive discounts andÌýyou expect your volume toÌýincrease rapidly. This grace period will allow you toÌýtake advantage ofÌýthose lower prices now, but you will lose your discounted rate ifÌýtheÌýsales goals aren’t met.

Connect with Your Account Manager

Typically, after you sign aÌýcontract with aÌýcarrier, you will beÌýassigned anÌýaccount manager orÌýrepresentative. ItÌýisÌýimportant toÌýestablish aÌýgood relationship with this person asÌýthey can often provide valuable insights andÌýhelp resolve anyÌýissues that may arise during theÌýshipping process.

Review Your Contract Regularly

Finally, it’s important toÌýregularly review your shipping contract andÌýrenegotiate when necessary. Shipping rates are constantly changing, soÌýfeel free toÌýreach out toÌýyour carrier andÌýnegotiate forÌýbetter terms ifÌýyou notice aÌýsignificant cost increase. It’s also beneficial toÌýcompare rates from different carriers periodically inÌýorder toÌýensure you are getting theÌýbest deal forÌýyour business.

How toÌýNegotiate Freight Rates

Curious about theÌýdifference between freight andÌýshipping? Let’s delve into theÌýdetails.

The Difference Between Freight andÌýShipping

When itÌýcomes toÌýfreight, weÌýtypically think ofÌýmoving large shipments, often inÌýbulk. Think ofÌýitÌýasÌýtheÌýheavy lifting inÌýlogistics. Shipping isÌýaÌýbroader concept, encompassing anything from tiny packages toÌýentire shiploads. ItÌýisn’t constrained byÌýsize orÌýquantity.

Freight andÌýshipping costs can differ significantly. When itÌýcomes toÌýfreight, weight, volume, andÌýdistance play aÌýbig role. It’s all about loading smart andÌýplanning routes well toÌýsave money.

Like many other carriers, FedEx uses distinct terms forÌýfreight andÌýpackage shipments

Shipping rates are influenced byÌýeven more factors like how it’s transported, how quickly it’s delivered, andÌýwhat isÌýbeing shipped.

Choosing between freight andÌýshipping depends onÌýcargo type, delivery speed, budget, destination accessibility, andÌýservice specifics. Freight suits large, heavy items, while general shipping works forÌýsmaller loads.

Negotiating Freight Rates

Handling freight comes with different factors compared toÌýshipping parcels. For example, freight isÌýtypically calculated inÌýbulk.

Similar toÌýshipping carriers, freight shippers work with contracts that outline theÌýterms andÌýconditions under which goods will beÌýtransported.

This type ofÌýcontract covers theÌýtransportation ofÌýgoods from one place toÌýanother, detailing theÌýprice, payment terms, delivery dates, andÌýresponsibility forÌýloss, damage, orÌýdelays during transit.

When negotiating freight rates, it’s essential toÌýunderstand theÌýfactors that impact pricing andÌýhow you can leverage them toÌýget aÌýbetter deal.

Consider theÌýfollowing:

Wrap Up

Contract negotiation can make aÌýbig difference toÌýyour bottom line, forÌýbetter orÌýforÌýworse. So, doÌýyour homework, stay informed, andÌýunderstand your own bottom line andÌýbudget. Then, suggest andÌýnegotiate until you find theÌýperfect shipping deal that suits your requirements.

Choosing anÌýecommerce platform isÌýjust asÌýimportant asÌýselecting aÌýshipping providerÌý— both play key roles inÌýyour business success. For aÌýrobust online store with theÌýadded benefits ofÌýhassle-free shipping, consider ºÚÁÏÃÅ byÌýLightspeed.

ºÚÁÏÃÅ provides you with various shipping tools soÌýthat you can offer your customers aÌýsmooth andÌýtransparent shipping experience:

Learn more about shipping tools you can use andÌýset upÌýanÌýonline store with ºÚÁÏÃÅ toÌýstart delivering aÌýtop-notch shopping experience toÌýyour customers.

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About The Author
Anastasia Prokofieva is a content writer at ºÚÁÏÃÅ. She writes about online marketing and promotion to make entrepreneurs’ daily routine easier and more rewarding. She also has a soft spot for cats, chocolate, and making kombucha at home.

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