The different types of rate shopping in Stone Edge Order Manager—standard rate shopping and time-in-transit based rate shopping—offer distinct types of savings for the merchant, depending on their business priorities and shipping strategies. Here’s how they can lead to different savings:
Standard Rate Shopping Savings
- Focus: Lowest cost shipping
- Savings Type: Cost Savings on Shipping Expenses
- How it Works:
- Standard rate shopping compares rates across different carriers (e.g., UPS, FedEx, USPS) and automatically selects the cheapest available shipping option for a given package.
- This approach is particularly useful for businesses where delivery speed isn’t a priority and customers are willing to wait a bit longer if it means lower shipping costs.
- Merchant Savings:
- Lower shipping costs reduce the total operational expenses for the merchant.
- Customer satisfaction might increase, as merchants can pass these savings onto their customers in the form of lower shipping fees.
- Over time, this can lead to significant savings, especially for merchants with high shipping volumes, as it optimizes for the lowest shipping cost for each order.
- Example: A merchant shipping non-urgent products might save by selecting USPS Ground over FedEx 2-Day if the cost difference is substantial, even if the delivery time is longer.
Time-in-Transit Based Rate Shopping Savings
- Focus: Balancing cost with delivery speed
- Savings Type: Time-Sensitive Delivery and Reduced Customer Service Costs
- How it Works:
- Time-in-transit based rate shopping evaluates both cost and delivery speed to choose the shipping option that delivers within a desired timeframe at the lowest cost.
- Merchants can use this method to meet delivery deadlines or customer expectations without necessarily paying for the highest-speed service.
- This method is used to compare non-expedited shipping methods against expedited shipping methods. e.g., UPS Ground will delivery a package from Philadelphia to New York City just as fast as UPS Next Day Air.
- Merchant Savings:
- Avoiding expensive expedited shipping costs when unnecessary. For example, if a customer needs an order in 3 days, the system can select a cheaper 3-day shipping option rather than more expensive overnight shipping.
- Reducing customer service costs by meeting delivery expectations (e.g., fewer complaints, refunds, or replacements due to late deliveries).
- Time-in-transit rate shopping also minimizes the need to use excessively fast (and costly) shipping options by picking the right service for the expected delivery window.
- Example: A merchant may avoid paying for overnight shipping by selecting a 2-day shipping service that still meets the customer’s delivery deadline, saving on unnecessary shipping fees while ensuring timely delivery.
Examples of Savings
To demonstrate the potentional savings, we’ve calculated sample rates and savings for the same parcel between the same addresses and compared those across carriers and services. The first example will be to compare rates using only standard rate shopping while the second example compares rates using the time-in-transit method.
For each example we’ve gathered rates using the following input:
Package Weight: 13lbs
Package Dimensions: 3″x6″x10″
Shipping from: King of Prussia, PA 19406
Shipping to: Richmond, VA 23173
Below are rates for an order shipping on a Monday morning with the time-in-transit (TNT) in days and the price.
These rates are retail rates available from each carrier at the time this article is written. Inside the Stone Edge Order Manager users will automatically receive deep commercial discounts from USPS and your personal negotiated rates from UPS and FedEx will be displayed. Therefore, your individual results will vary considerably. This is just an example to explain the functionality of this feature.
USPS Ground Advantage – 2 – $16.15
USPS Priority Mail Large Flat Rate Box – 2 – $24.75
UPS Ground – 1 – $18.24
UPS Next Day Air – 2 – $96.66
UPS Second Day Air – 2 – $56.16
FedEx Groud – 1 – $17.53
FedEx Standard Overnight – 1 – $106.19
FedEx 2Day – 2 – $53.96
Standard Rate Shopping:
Customer places and order and requests Standard Shipping
With standard rate shopping, the system would compare similar methods (i.e., UPS Ground vs FedEx Ground vs USPS Ground Advantage) and select the least expensive. In this case USPS Ground Advantage would win the shipment with a potentional savings of $2.09.
Customer places and order and requests 2-Day Shipping
With standard rate shopping, the system would compare similar methods (i.e., UPS Second Day Air vs FedEx 2Day vs USPS Priorty Mail) and select the least expensive. In this case USPS Priorty Mail would win the shipment with a potentional savings of $31.41.
Time In Transit Rate Shopping:
Customer Places an order and requests Standard Shipping
In Stone Edge you have “Standard Shipping” defined as needing to be delivered to the customer within 5 days. With time-in-transate based rate shopping, the system could compare all shipping methods from all carriers and filter the results first by the shipments that will get to the customer in 5 days (in this example all of them would), and then sort by the least expensive. In this case USPS Ground Advantage would win the shipment with a cost of $16.15.
Customer Places an order and requests Expedited Shipping
In Stone Edge you have “Expedited Shipping” defined as needing to be delivered to the customer within 2 days. With time-in-transate based rate shopping, the system could compare all shipping methods from all carriers and filter the results first by the shipments that will get to the customer in 2 days (in this example all of them would), and then sort by the least expensive. In this case USPS Ground Advantage would win the shipment with a cost of $16.15 even though Ground Advantage won’t always provide 2-day delivery, in this case it does. Compared to standard 2-day shipping methods you just saved $8.60.
Additional Benefits of Both Methods
- Improved decision-making: These methods provide data-backed decisions on which carriers to use based on specific order needs, which can help optimize logistics.
- Negotiated Carrier Rates: Merchants who have negotiated rates with certain carriers can still leverage rate shopping to ensure they are using their discounted services to full advantage, potentially saving even more.
In Summary
- Standard rate shopping provides the cost savings by selecting the lowest shipping rate available, which is ideal for non-urgent deliveries and high-volume shipping. Or by selecting the least expensive of similar shipping methods across carriers.
- Time-in-transit rate shopping offers maximum savings through smarter delivery choices, ensuring timely deliveries at the most cost-effective rate, reducing the need for higher-cost expedited options.
Both methods lead to different types of savings—cost reduction versus efficiency and service improvement—allowing merchants to fine-tune their shipping strategies based on customer expectations and business goals.