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The Ship•Systems Advantage
What it is and how much it costs
Shipping costs used to be charged by weight. The heavier the parcel was, the more expensive the shipping. Today, most carriers apply a dimensional weight or volumetric weight formula and charge you more expensive of the real package size and the calculated one. Using only weight to get shipping rates results in inaccurate pricing.
Here's an example from Canada Post for a parcel weighing 1.5Kg:
Dimensional Weight Formula: (Weight x Density Factor) = Volume
If we enter the real package size, we get a different dimensional weight, the one we will be charged for shipping.
Dimensional Weight Formula: (Volume / Density Factor = Weight)
Packing boxes isn't rocket science; you do it every day for your eCommerce, shipping and warehousing yet your eCommerce website doesn't know how. In the best case scenario, it's foregoing dimensions and using weights to get the dimensional / volumetric weight from the carriers. In the worst case, it's treating each item as a separate parcel.
Based on the previous example, your customer would be given a shipping quote based on the dimensional weight of 1.5Kg but actually shipping the parcel would cost more, the equivalent of 3.0Kg. That difference in cost comes right out of your profit margins. If you were to ship from Ottawa's Parliament buildings to Toronto's CN Tower you would pay almost $2 more for shipping than the customer paid. On $50 order operating with a 50% gross margin, that's almost an 8% reduction to your net profit for this sale.
If you sell for $30,000 this year, your expected net profit should be $15,000. If you're losing 8% on every shipment, you'll end up with $13,800 instead. This is just an estimate, and the figures look even worse the lighter and less dense your products are. The losses would be much greater if you were shipping popcorn than if you were shipping popcorn kernels.
Ship•Systems uses actual product and box dimensions to find the smallest boxes for your order. This allows it to get accurate rates in real-time at checkout. With fully interactive 3D packing visualization of the packing you can stop losing money on shipping and protect your bottom line.
Shipping carriers benefit from you sending high volume, low weight packages.
Carriers apply a dimensional weight algorithm, charging the highest price between the actual and volumetric weight.
Ship•Systems gets the real price, using real-world measurements.
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