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04 December 2018

Money Money Money!

A Discussion on the Expenses of Shipping 

Sticker shock at the cost of shipping live animals is a very common sensation. Even those experienced with shipping can find themselves shaking their heads in wonderment and dismay at how expensive it has become. 

I have some bad news for you. It’s going to get even more expensive for 2019. Every year, in the first week of January, FedEx (and UPS, as well) raise their base cost of shipping by 4%-6%. This year, that increase is expected to be around 5%. 

What does this mean? It means that the base rate (the foundation figure that determines how much any given shipment will cost) is going to go up by an additional 5%. The cost of every package shipped will be more expensive than the same package would have cost last year. This increase affects EVERYONE that ships, including SYR/SYA. 

The amount of discount you have set up with us does not change. You’ll continue to receive xx% off the FedEx retail rate, as before. But that retail rate is going up. 

For example: 
FedEx retail rate for a certain 2018 shipment was $100. SYR/SYA standard rates offer 30% off of that cost, charging you $70 for that label. 

The same shipment in 2019 may have a retail rate of $105. With the same 30% off from SYR/SYA, that package will cost $73.50. 

In addition to raising their base rates, FedEx often adjusts their other charges for the year. Additional fees such as the Residential Surcharge or Extended Area Delivery may also go up. (We’ll let you know those exact figures as soon as we do.) 

These changes happen every year. These decisions are made by FedEx, and are outside of our control. We will, as always, continue to work with FedEx to negotiate better pricing so we can continue to keep shipping as affordable as possible for our customers. 

So what can you, as a business, do to help your own customers accept the high cost of shipping? 

First off, you’ll have to figure out how the shipping costs will figure into your business model. Every business is different, so what works for one breeder may not work for another. Those with high profit margins can choose to charge their customers less for shipping than it actually costs. Those with very low margins may have to get more creative with their pricing and/or marketing. 

One very simple way to keep shipping costs as low as possible is to have your shipments held for pick-up at your recipient’s nearest FedEx Ship Center (hub). Doing so will avoid most of the additional fees that can be added on for residential deliveries, or those deliveries that range too many miles away from the hub. 

Another tactic is to choose your shipping boxes carefully. The smaller the box, the less it costs to ship. You don’t need to ship a baby snake in a 15x11x7 box. A 7x7x6 box will probably work fine and save a great deal of money on the cost of the label. (Unless you’re using a heat pack, in which case, we recommend a 12x9x6 as the smallest box to choose.)

Is it even worth it, to ship my animals these days? 

Honestly, that depends on you and your business. Some breeders can be very successful selling only in their local area. If you live somewhere that has regular, popular expos, and your production volume fits well with your available customer base, you may not need to fuss with shipping at all. 

For many, there is no easy way to reach local customers, or their volume of production far outstrips the number of sales that can be counted on locally. Being able to ship across the country opens up a massive customer base, but that base does not come for free. Shipping live animals is expensive. That fact has to be accepted and worked with in order to be successful at expanding outside of your local region. 

One of our most common complaints is “I’m losing customers because shipping is so expensive!” But are you, really? If a person trying to buy an animal online is not willing to accept the very real cost of shipping, then maybe they’re not actually part of your customer base. For every one of those “looky-loos” inquiring about your animals, you have to decide if they are worth the effort it will take to hook that sale. Are you willing to invest the time and energy to try and convince them your animals are worth the extra cost of shipping? Are you willing to adjust how much you’re asking for shipping and lose money on the deal to make that sale? Or…Maybe you should just let them go and direct your marketing energies toward the other 10,000’s out there that ARE willing to spend money on shipping for quality animals.

There is no “one-size-fits-all” answer to dealing with the high cost of shipping. And there is no “one-answer-fixes-all” either. Even those businesses that can offer their customers “free” shipping are going to deal with plenty of inquiries that don’t turn into sales…it’s just that their looky-loos won’t be able to use shipping costs as their excuse for begging off. 

For more detailed discussions on working with shipping costs, check out a couple of our previous newsletters: 

It Costs How Much?!? Marketing strategies for helping your customers get over the high cost of shipping.

Flat Rate Secrets Revealed! How “flat rate shipping” really works and how you can use it in your own business.

The success of your business is intimately tied with the success of our own! We will always be here to make sure your business succeeds by offering the safest and most affordable way to ship your animals to far-flung customers. Please don’t hesitate to contact us and ask for help if you’re struggling to integrate shipping costs into your business.  

Please don't hesitate to reach out to Customer Service for any questions or concerns you might have regarding your shipments.  We're here for you! 
Monday - Friday, 7am - 6pm MST


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