Learn what it really means to partner with a vendor who is reselling shipping rates
Everyone loves to save money, right? But does it come at a cost?
Earlier this year, our Co-Founder, Justin Cramer took a deep dive into the, “Install in Days” software myth that some shipping software vendors are selling. In this article, he reveals one of the reasons that a vendor may try to sway you to this technology, no additional cost to add carriers.
A Closer Look at Reseller Parcel Shipping Rates
We will take a closer look at this reasoning within the realm of reselling shipping rates. Several well-known multi-carrier shipping software (MCSS) vendors offer reseller shipping rate programs in addition to their core MCSS platforms. While some enterprise and mid-sized retail, manufacturing, and 3PL providers see only dollar signs, they need to be aware of the long-term effects of this going down this road.
To learn more about what red flags you could be missing by using one of these shipping vendors, let’s start by answering some of the basics.
What does it mean to use reseller parcel shipping rates?
Reseller parcel shipping rates are discounted shipping rates on carrier services that you may already use, given by one of your software providers. The draw is that you don’t need to be a current customer of that carrier to access those discounted rates.
How do some multi-carrier shipping software solutions benefit from offering discounted parcel shipping rates?
When a vendor offers you discounted parcel shipping rates, this means that they are making a margin off of every shipment processed. In total, it could be a flat fee across the board, or a percentage of each transaction. For enterprise shippers who ship thousands, if not millions (during peak season) of shipments, this can add up quickly the more you ship.
What red flags come with using Reseller Parcel Shipping Rates?
The biggest concern that shippers using these vendors should have is that you are giving away your right to negotiate directly with the carrier. This may make sense if you are a smaller shipper and do not have leverage or an appetite to negotiate on your own, though these are conclusions you must make through hard analysis and not by buying into a sales pitch. At some point in the growth of your business, it definitely makes sense to establish good relationships with carrier reps.
Do not blow off the need to have an advocate within your carrier partners. For a company whose business depends on the reliability and efficiency of outbound shipping, a solid relationship with a carrier rep is one of the most important partnerships to foster. The rep should know your business and tailor a rate card and operating plan that fits you closely. For example, if you are shipping items that are very large but light, a general discount on ground services may not offer as much value as a custom dimensional weight divisor. If you need a later pick up because of an upcoming online sales promotion, you need to know you can call someone in a pinch to get it.
If you have substantial volume, the carrier wants to work directly with you rather than let a reseller stand between you and them anyway Also, some extremely valuable carrier services like last-mile postal delivery or consolidated international shipping are only offered through a direct contractual relationship with the carrier.
In many cases, it is sensible to decouple your rate agreements from your technology stack so that the two can evolve independently as needs change. If you have outgrown a reseller’s rate card or their technology, you should be confident that you can move on in one area without a disruptive impact to the other.
The most mature companies select providers who are best in class for what they do in their core competency.
There is also a benefit in the principle of a shipping solution being “carrier agnostic” – not favoring one carrier over another. This will allow for easy expansion and reduction of your carrier portfolio mix as conditions change. It will also allow your carrier-agnostic vendor to deliver objective evaluations based on your business’s unique rules and serve up the fruits of your good negotiating efforts with your carrier partners, rather than focus on carriers who will line the pockets of your reseller vendor.
How can I find the right multi-carrier shipping software for my company?
As previously mentioned, if you are a new entry or startup, you probably don’t have access to shipping rates outside of the published rates. In this stage, it makes sense to utilize a vendor that can offer reseller parcel shipping rates. However, once a brand has grown past the startup phase, it is best to do some investigating to find out if you are still getting your money’s worth.
For shippers who manage a complex supply chain program, a MCSS that is focused on your core shipping profile will serve you now and as your needs change. ProShip’s industry-leading multi-carrier shipping software solution gives you the tools to achieve millisecond transaction times, building customer revenue streams that any enterprise brand would dream of. With a broad carrier library, shippers can find the carriers and carrier services to best meet their requirements. And with a flexible, powerful architecture, the ProShip solution has the intelligence to integrate into your existing software stack (learn how in our How ProShip Works brochure) to automate and simplify current shipping processes and expand functionality to new and optimized fulfillment strategies.
Find out if ProShip multi-carrier shipping software is right for your business
To learn more about how this robust parcel software solution can supercharge your shipping program, contact our team today.
About the Author
Clint Boaz is Senior Sales Engineer for ProShip, where he leverages his 20+ years of expertise in shipping technology to show shippers how integrated multi-carrier shipping solutions can bring efficiencies to their business. Prior to joining ProShip, Clint held various roles at UPS. Clint lives in Tulsa, Oklahoma with his wife and three children.