Turn Your Shipping Department into a Profit Center Without Gouging Your Customers

How do you turn your shipping department into a profit center without making your customers feel like you are exploiting them?  If your small package shipping charges are more than the carriers’ book rate your customers will know it.  The solution is to get discounted rates from a carrier so you will make a profit when you charge your customers the book rate.  You can also get better and less expensive shipping insurance rates from a third party than you can from your carriers.   By selling your small package shipping services to your customers at the published book rate you can earn profits on the insurance and on the shipping rate.

If your company moves heavy freight you can apply the same principles as above to generate more profits in your shipping department.   The only difference is that you can’t use the carriers published rates because they would be too high.  You should be able to have access to discounts of 60% - 78% from the carriers via your freight forwarder.  Developing a good relationship with a freight forwarder will give you access to reduced freight rates.   Just mark up the freight rate a small percentage to generate some revenue.  Usually the third party insurance will cover both small packages and heavy freight. 

Another thing to consider is to use technology to reduce your operational expenses in your freight department.    There are a few shipping technology providers that can offer access to an internet based shipping portal.  This portal can print waybills/labels for UPS, FedEx, DHL and USPS. The portal can also display the book rates for all of these providers.  I know of some technology companies that also provide access to the discounted third party provider if shipping insurance.   Later in 2006 a particular company will provide discounted rates for one of the major small package carriers and LTL service.  Your LTL cost will be shown to you and will calculate your profit margin that you determine. They also have plans to include domestic air freight with auto quotes.    In the future discounted international quotes will likely become available.  I have no doubt that in the years ahead more technology companies will partner with providers to offer a complete package.

The good news is that since 2007 small to mid size businesses have access to technology that simplifies the shipping process.  Savings on shipping small packages, LTL, domestic air and even international freight will also become available.  The result will be shipping departments will operate with less resources and at a profit.  Most of this technology will be available for free if you know where too look.

BIO

Paul Buisson has been helping small businesses save on their shipping expense for over eight years.  He specializes in helping start-up businesses and businesses that don’t know anything about shipping.  He can be contacted at 888-559-8820.