In
a previous post,
we looked at how Amazon is changing the way we receive our purchases, with
their push to increase their physical footprint in the form of in-store pickup
and Amazon kiosks. So why is Amazon doing this? It’s not to deter the package
pilferers though this certainly is an added benefit. There is also a certain
degree of comfort in not having to worry about missing the delivery of your
precious purchase but that’s not the reason either. The simple reason is that
it saves them money! It’s a pretty basic calculation, 20 deliveries going to 1
kiosk is a lot cheaper than 20 individual deliveries. It’s no secret either
that most of the big names in shipping charge extra for deliveries to
residential addresses and this is another reason for this move.
Why
do carriers charge a premium for home delivery? Companies like FedEx and UPS primarily
service other small or large businesses. Unlike the postal service, these
carriers are not accustomed to servicing residential areas on a daily basis so
they charge a premium for this service. These carriers determine your shipping
cost based on whether the delivery is going to a commercial or residential
address. You may think you can get around this because you run your business
out of your home but think again. Carriers use a system to verify the addresses
known as RDI short for Residential Delivery Indicator, this list is maintained
by the US postal service so if they have you down as residential be prepared to
pay extra. Want to check if you’re residential or commercial? You can do a
check here using
the SmartyStreets single address verification tool.
These
residential delivery fees also impact our wholesale liquidation customers who
place smaller, lighter orders consisting of a box or two. With small lots
consisting of less than 20 or 30 pieces, It’s not uncommon for us to see
shipping costs sometimes equal half the cost of the lot when being delivered to
a residential address. Want to avoid this costly frustration of additional
delivery fees on your next order? Of course you do, put those additional
dollars saved towards your next purchase instead. So here’s your
cash saving tip, have your next order shipped to a commercial address. Don’t
have access to a commercial address? You do, you just don’t realize it. FedEx
our primary carrier for small ground shipments has literally thousands of
locations that allow hold at location deliveries for small shipments. These are
often located in drug stores like Walgreens or in their FedEx/Kinkos office
locations. Want to know if there is one near your home? Simply check using
FedEx’s find a location type
in your zip code and make sure to select hold at location when you search to
determine locations close to you that will accept the delivery. This would now
be considered a commercial shipment saving you as much as 50% on some shipment
costs. Are the savings worth the additional effort of picking it up? Absolutely,
some customers save as much as 50% by having it shipped to a commercial
address.
Of course the
savings increase exponentially when ordering lots consisting of multiple heavy boxes. Note, that
the difference in cost between residential and commercial delivery for freight is
almost negligible. So your goal should be to start buying pallets as soon as
possible. More items translate into more sales and that is a topic for our next
blog entry.