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21 November 2017

Flat Rate Secrets Revealed!

Have you ever seen a breeder offering the same shipping rate on all their animals? No matter how big the package, or how far it must travel, they charge the same flat rate. How do they do that? Do they have some kind of special deal with FedEx or ShipYourReptiles or ShipYourAquatics? If so, how “big” does one have to be to get the same deal? Is there a magical number of shipments to achieve in order to earn that special status?

Here at All Pro Shipping, we don’t have “magic numbers.” Whether you are using ShipYourReptiles or ShipYourAquatics, we prefer a personal relationship with each customer. You might be a big shipper with frequent weekly packages going out, or a pet owner looking to safely transport between college and home a couple times per year, or anything in between. Every situation, every business, is unique, and we strive to meet those individual needs as best we can. 

So, what is the secret to that coveted Flat Rate? 

When we were reptile breeders as Pro Exotics Reptiles, we set a flat rate for shipping a "normal package" (everything except when we needed to use the large 30x16x10 box). In the early years it was $35 per shipment. Later in the 2000's it was $55 per shipment. 

We didn't bother to quote individual shipments. Sometimes it was cheaper, and sometimes it was more. But the "flat rate" offer appealed to our customer base. It was a great marketing technique. It made order calculation fast and easy, and we were reasonably confident that we wouldn't lose money, most of the time. 

There is no rule that says if you pay $77.34 for a particular shipment, you must then charge that exact amount to your customer. Whether you are shipping reptiles or aquatics, whether your business is large or small—everyone pays a variable rate based on the size of the package and the distance it must travel. When a business offers a $45 flat rate for all their shipments, that does not mean they are paying a $45 flat rate themselves. They simply choose to keep their personal shipping costs private and charge their customers a rate that works for their business.

There are two primary models for choosing a Flat Rate to offer your customers: 

Average Shipping Rate

  • If you have a solid shipping history already, you can take an average of your shipping costs and round that off to a customer-friendly number. For instance, if your average cost over a year of shipping is $63.78, you might round that off to $60 or $65 as the amount you charge your customers for Flat Rate shipping. 
  • If you don't have a long history built up yet, you can estimate your future average cost.  Using the dimensions of your most commonly shipped box, run several Quick Quotes on our website with zip codes both near and far. (If you have customized rates with SYR/SYA, make sure your account is logged in to see your personal rates quoted.) Take an average of all these figures, round off as described above, and make that your Flat Rate.
  • Over time, you'll spend less on some shipments, and more on others. As your business grows, your net gain/loss on shipping costs will approach $0. 
  • Keep in mind that base shipping rates increase annually, so some adjustments may need to be made from time to time.


The Subsidized or Zero $ Rate

  • Some businesses will advertise a very low (or free) shipping cost as a way of attracting customers. Although they are paying far more for shipping, they might charge their customers $30 per box, or even $0. This practice helps mitigate the “shipping sticker shock” many new buyers encounter when ordering animals online. 
  • This model is particularly easy to pull off with high-dollar animals because the profit margins are large enough to absorb that cost without a noticeable loss of income. 
  • Can this method work for low-dollar animals? Yes, for some—depending on how much wiggle room you have in your retail pricing. Figure out your average cost of shipping, then reduce it by a number you are comfortable with. For instance, you might reduce a $60 average to a $40 Flat Rate. Then increase the retail cost of your animals by $20 to offset the difference. 

Not everyone can offer a low flat rate and make it economically viable. If you specialize in selling single animals at $25 each, there is just no margin to offset shipping costs. You won't be able to afford to eat $20 of your shipping costs as a marketing ploy to appeal to your customers; the numbers just don't add up. 

So how do companies like LLL Reptile and ReptiMart sell single geckos for $20 with $25 shipping? Volume. Consistency. And millions of dollars in business. LLL and ReptiMart don't ship with SYR, but they do tens of thousands of packages a year directly with FedEx, and they are able to negotiate really aggressive discounts. They have worked decades to build their businesses, their customer base, and that leverage. It isn't realistic to expect that you can start breeding and hatching 6 clutches of ball pythons a year and get the same kind of extra deep shipping discount from FedEx that LLL Reptile does. 

But let ShipYourReptiles work with you to maximize your potential! One of our specialities is BEING ABLE TO give you access to a much deeper discount on your shipping than what you would be able to negotiate directly from FedEx. Whether you are shipping three times a year, 6 times a week, or 100 times a week, SYR can give you a better shipping discount than what you are likely to get direct with FedEx or UPS. You might not be able to match the $25 flat rate that LLL Reptiles offers, but we can get you in the best possible position—a position and rate that will allow you to grow your business and keep reaching your customers!

In the end, shipping will always be an expensive part of selling animals outside of your local area. As a business-person, it will be up to you to decide how you wish to incorporate that cost into your business model. If you’re breeding quality animals and offering top-notch customer service, you shouldn’t have any trouble convincing your customers that they are worth the cost of shipping!

Please don’t hesitate to reach out to us and let us know how we can best meet your business needs with the most reliable and customer-oriented shipping services available!  

Email ShipYourReptiles or ShipYourAquatics
or call
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