Shipping plays a major role in online retailing. Shipping products to different domestic and international destinations costs much. Carrier's fees often give merchants a headache, especially if the increase is abrupt. Who will shoulder the cost of shipping? Is the purchase profit expedient to pay the shipping cost? There are several challenges that online retailers must consider with regards to shipping.
Adding salt to the wound, competitors' capability to offer free shipping or negotiate with shipping companies for flat rate disenfranchises small and medium merchants. For other stores, spending for shipping is not a big deal as long as they can gain bigger market share which will return profit in the future.
For online merchants offering free shipping to customers, flat rate shipping is very beneficial. It gains them a vantage point in competing for a market share without spending much. Flat rate shipping offers sending packages anywhere in the United States for the same cost. Packages are not weighed to determine cost. You just pay for the box rate, regardless of what you can fit inside. The United States Postal Service is the leading carrier offering flat rate shipping in the country.
Flat Rate Shipping Advantages
Here are some benefits of flat rate shipping that should convince to use the service:
Known Cost. With flat rate shipping, you know how much you must pay for the package. There are not hidden cost and surprises. For small-medium online retailers, flat rate shipping helps in budgeting and targeting a profit estimate for every purchase. USPS does not charge fees for Saturday deliveries or fuel cost. Plus, free USPS boxes offers a great advantage to retailers looking for cost-effective shipping.
High Priority Delivery. USPS and other carriers offering flat rate shipping give high priority on flat rate boxes. The high boarding priority provides fast shipment within a time frame, and avoids lost packages.
Fraud Avoidance. US federal law enforcement agencies support and protect USPS flat rate box shipping. It assures avoidance of fraud and theft of packages. To avoid lost of packages, carriers redeliver boxes and avoid abandonment when the addressee is not around. Using USPS gives access to mailboxes and to thousand post office boxes across the planet. Among shipping companies, only USPS can send mails and packages to government agencies.
According to its own website, USPS“use Priority Mail Flat RateSe™ Boxes to ship anywhere in the U.S for the same price, no matter the weight.” Being the largest vehicle fleet operator, USPS ensures delivery of packages on time. USPS has the obligation to deliver boxes and packages anywhere in the country without regard to geographical make-up. As a result, online merchants can send products anywhere, thereby increasing the customer satisfaction and establishing reputation of the retailer.
Having exclusive right to deliver mails and boxes to government agencies, USPS has advantage over its private competitors, including FedEx and UPS. The United Parcel Services of America, or UPS, focuses on “goal of enabling commerce around the globe.” On the other hand, FedEx“provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services.”
USPS Flat Rate Shipping Rate vs FedEx vs UPS
For illustration, let us check the price difference between USPS, FedEx and UPS. The succeeding screenshots show how much you can save when utilizing USPS flat rate shipping small box. In this example, packages are sent from Athens, Georgia to six different drop-off metros of the country, to wit: New York, Orlando, Chicago, Dallas, San Diego, and Las Vegas.
For only $5.35, you can already ship a one-pound product to these six destinations. The principle of “same price anywhere in the United States” of USPS proves to be advantageous to online merchants, especially in providing free shipping feature to the store. Although, both UPS Ground and FedEx Ground offer lower fees and faster transit, USPS still offers comparably the lowest charge. The drawback is the number of days for the transit of products. But for online purchases, three-day transit is already acceptable.
USPS offers the same standard or flat rate of $5.35 for the small box even if the product weighs 3 or 5 pounds. In the same way, the three-day transit standard is a great feature your online store can have. The online merchant may capitalize on the three-day delivery anywhere at anytime. Plus, boxes are for free.
On the other hand, UPS Ground offers higher fees to include fuel surcharges and residential delivery. You need to pay for the box at around 50 cents to $1.00. Discounts are offered by UPS for online merchants with frequent shipping. However, the discount differs on the geographical location and condition of the destination.
FedEx Ground offers lower fees compared to UPS Ground and the difference of package transit time is not too distinguishable. They compute the distance of one place to another. In this example, delivery from Athens, Georgia to Orlando, Florida costs lowest because the distance is just 728.1km. However, for Las Vegas which is 3, 269.1km from Athens, the cost of FedEx Ground is higher.
For online merchants, USPS 'if its fits, it ships' marketing principle offers a powerful vantage point. Online stores that need to ship dense products can greatly benefit from the flat rate shipping system, either for the free shipping store feature or for discounted shipping methods.
However, for light but dimensionally big products, USPS flat rate shipping may not prove advantageous. In the screenshot below, USPS Athens-New York shipping is valued at $15.45 for a package weighing 3-pound, but if you ship it using UPS Ground, you will only spend $14.32 for the same transaction. Much more with FedEx Ground, $10.18 is already a great advantage.
Though you can take advantage of the lower fees of UPS Ground and FedEx Ground when it comes to bigger but lighter packages, USPS offers the most trusted and fastest transit from point to point. If you want to satisfy customers with a uniform shipping duration, USPS flat rate shipping is a good option.
