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Purchasing: Shipping expense can be a big part of the equation.

I have been in the book business (retail sales and publishing) for fourteen years and in trying to compete with the likes of Amazon I have learned a few things. If your vendors typically include free shipping then this communication is meaningless but they probably do not.

Some vendors make a enough to cover all of their administrative and warehousing costs by mark ups on shipping and if you are trying to get your group/client the best price unknown shipping expense can prevent this.

One typical way a vendor will do this is negotiate a large discount with the shipping carrier and then charge the purchaser the full retail price for the shipment.

You, as the purchasing agent for clients/group can independently negotiate huge discounts with carriers: If your volume is too small you can use a broker. I use Unishippers they are not the cheapest but they have a good easy to use website and their service is good.

Then whenever you purchase you have the vendor use your shipping accounts and the amount you pay is the shipping expense. You then incur some increased administrative expense or time. For parcel this is minimal for LTL, pallets, (over at least 300 usually 400 pounds) this involves an additional transactions with the weight, height, and class. Shipping via pallets has the additional advantage of less damage than parcel. Though some parcel services are pretty good at this. (another subject)

Then there is logisitcs. If the project has tight arrival schedules because there is little on site storage and there is no way to create storage with onsite trailers or containers, you can incur a lot of work, last minute expedites, and the expense of air shipments. Air shipments actually have big margins where you can save your group/client money. Regardless, it will always be more expensive than slower methods and by working with your group/client to setup onsite storage you can prevent this and save the group/client a lot of money, and last minute expedites.

Freight forwarders can be used to consolidate shipments to one large shipment. This is particularly important on cross boarder shipments which incur customs administrative expenses with each shipment.

Cheapest to most expensive shipping methods I know are:

Container 48, 40, 20 foot (particularly returning empty via rail, use freight brokers for this),  truck load, pallet, parcel air container, air bulk,  air parcel.

Trucking can sometimes be as fast as air parcel if the distance is short or the trucking company will continue to move the shipment over a weekend. For example, one publisher gets huge discounts from LTL carrier Daylight. (ship on Thursday or Friday and it is across the country by Monday or Tuesday the equivalent of 2 day air)


Bernard Littman

PS: For more information helpful information see: The Small Business Success Manual (Softcover)

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