What is Drop Shipping and is it Right for my Company?
I like to think of Drop Shipping like a carpool where everyone shares the ride, saves on gas, and saves time getting to their final destination. The service is available for local and national mailings and is ideal for those with loads weighing 100 pounds and greater. The cost reduction and speed to the recipient can be very significant and is well-worth investigating. Probably the best part is that this service, unlike most mailing offerings, is actually stacked FOR those who are not super-mailers at astronomical volume levels. It’s perfect for all mailers who want to “carpool” with other mailers in the same freight truck to get to their recipients faster and more cost-effectively.
Drop Shipping works by cutting out the first three steps of the standard USPS delivery process and loading pre-sorted mail directly onto a freight truck which arrives at the final destination postal facility – expediting delivery to the recipient. Using a simple concept nicknamed LTL, or less than a truckload, mailers pre-sort their campaigns then contract with the freight company to share space with other LTL mailers and even FTL, or full truckload mailers. It’s like hitching a ride with friends you never even knew about. The LTL drop shipping is ideal for those whose load to the final destination weighs between 100 -20,000 pounds. There are also drop shipping options for FTL mailers which can have very significant benefits, but this option is reserved for more concentrated mailings that are above 10,000 pounds or more to the final destination point.
In 1991, the USPS began offering postage discounts for mailers who ship pre-sorted, pre-paid, and palletized Standard Mail directly to Regional Postal Facilities closer to the final destinations and voila – Drop Shipping was born! Let’s take a case study of how this process works and actual cost savings with Drop Shipping.Let’s say we have a 20,000 piece mailing produced in Baltimore, MD destined for Chicago, IL. After the pre-sort is completed, the mailer achieves a mailing with 50% 3-digit mail and 50% 5-digit mail. If this mail was dropped as local entry mail in Baltimore, the postage is in the 26.5 cents per piece range for standard class mail. If the mailer takes advantage of Destination Delivery Discounts and trucks the mail to the Chicago NDC (Network Distribution Center) or another Chicago area destination sorting facility, the postage goes down between 3.5 cents for NDC entry and 4.4 cents for SCF entry per piece to the 22.5 cents per piece range. The postage savings on this job is approximately $800. The cost to Drop Ship this mail from Baltimore to Chicago is approximately $200 – $300, so there’s a net savings of up to $600 for just one shipment. Imagine how this can add up for many concurrent local or national campaigns.
Sound like a good fit for your company? It’s best to engage an experienced Drop Ship firm that understands the details, paperwork, and scheduling requirements necessary to be successful. Based on your mail campaigns, they’ll advise as to the best strategy and expected cost savings Drop Shipping can deliver for your business.
Ready to give Drop Shipping a try? At Three Dog Logistics, our consultants will help develop a plan that delivers your mail and parcel at the lowest cost and fastest delivery speed possible. Remember, we take the bite out of postage and freight. Visit www.threedoglogistics.com or call 410-284-5494 extension 220 to schedule a complimentary consultation today.
