Massive Fedex Discount Offer!

What to do with this offer from Fedex?

[jpman]

Well, I had been chasing fedex/dhl/ups for a while but they wouldnt offer me any discounts since my shipments were not good enough for them. Just out of curiosity, I called them again after 18 months break and probably 5 times more shipments than my last calls. I was surprised to see the offers from dhl and fedex. So far, dhl guys have been here 3 times with a different offer each time. The fedex guy came with such an offer thats almost impossible to turn down. I would most probably be saving close to around 40% of the shipping costs.
In my industry, customers always pay 100% of the shipping costs. Some of my competition even charge a handling fee, besides the actual shipping costs.

Now, I am lost a little bit and am wondering what to do with the extra CA$H. As an online merchant, what would you do with the sudden income/saving you get from your shipping costs/savings. I really dont want to spoil the party for myself and for the industry since everyone is probably doing fine. A few of them are 5 times larger than us but we are catching up.

[pageoneresults]

The fedex guy came with such an offer thats almost impossible to turn down. I would most probably be saving close to around 40% of the shipping costs.

That's interesting. My understanding is that the FedEx Routes are now franchised. I wonder if those franchisees have any restrictions on "how low can you go"?

Saving 40%? Wow! That's a significant savings. I'd actually be using that to lower prices and/or offer special shipping rates to increase sales. No need to be greedy when you can take advantage of this and everyone wins. :)

[jpman]

I have two types of customers. Smaller one time customers and resellers. I was thinking of extending almost all the savings to these resellers since they mostly bring alot larger business than smaller one timers. Most of the discounts offered are from the middle size boxes of 10-20kg and larger weight and luckily, most of my shipments are around that size. I am not greedy but I am in a shock situation at the moment when 20-25% of the costs account for shipping.

[ambellina]

If it were me, I would take off a small percentage of the shipping rate for one time customers and offer a larger discount to the resellers based on volume. And if the new rates for one-time customers are significantly lower than other vendors in your sector, advertise the beeswax out of the new rates on your homepage/product pages/etc.

[gpilling]

Large discounts are not uncommon with Fedex or UPS. We have more than 40% discount on next day, 2nd day; we have also a large discount on Hundred Weight shipments. Our UPS freight discount is 73%.... but with these small parcel shipments the devil is in the details. Your discounts will vary by shipment type, and by shipment speed. The greatest discounts will be on the most expensive services, naturally.

We ship mostly ground packages around 10-20 lbs, so our discount on those is not as large as the discounts on next day shipments.

I am fortunate that I have a 15 year UPS veteran that works for me. He has been a godsend on understanding how to maximize my freight reductions.

I have also found that Fedex and UPS have almost exactly the same pricing, once you have boiled down all the numbers.

What do we do with the extra savings? We use it to fund the "free shipping" that we do on larger orders. Many customers will buy up to the level to get the free shipping, in our case we do mostly wholesale.

[jpman]

Luckily, our largest discounts are in the 10-20kg and over 100kg shipments and thats what we ship most of the time as well.

[Rugles]

Pass the savings on to the customer. Who knows how many sales you lost in the past because the shipping charges were the deal breaker.

If you increase your sales, you will increase your Fed Ex volume which will likely translate into further discounts.

Good luck.

[jpman]

Well, after all these opinions, we are going to make a plan some sort of discounts. We are sure to benefit our customers with this offer from fedex in short and long run.

[teebo]

First post, hello all.

Just wanted to chime in. I have been in talks with my dhl rep for over 1 month in getting new rates. It's actually very very frustrating. It's been one week since I accepted the inital rates to actually get them implemented. Is it just my rep?I may just decide to talk to the local reps. It is no wonder the company is going down the drain, the only good guys are their drivers and I feel bad for them because most of them are disappointed in the way its being run.

gpilling and jpman I was wondering if I can contact you and see what kinda rates your getting, as I don't know anyone else who deals with ecommerce

[jpman]

you could get somewhere from 60-80% off the listed price. It really depends on how many $$ do you pay them on a monthly basis.