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Small Parcel Benchmarking in Contract Negotiation

By April 16, 2015

FedEx UPS Small Parcel Contract Negotiation Benchmarking

What is rate or discount benchmarking? Have you ever wondered what your neighbor paid for his new car? Did he get a good deal? Say you liked that car and were able to walk into the dealership knowing the exact price as well as the finance rate negotiated. This information would certainly give you an idea of what kind of price you are being offered. What would be even better is if you had that same information for about 20 other buyers. That would definitely put you in the driver’s seat – in more ways than one.

Take this same principle and apply it to your FedEx and UPS rates and discounts. Each service you use, FedEx Ground or UPS 2nd Day Air, etc. are discounted at a rate off the published rate. The published rate is the rate that any person who opens a UPS or FedEx account can get without question.

Suppose you want to ship a 10 lb UPS 2nd Day Air package to a your aunt in Boise. The zone for your location to Boise is zone 205 according to UPS. Per the UPS daily rate chart, that package would cost $39.60. But any shipper with volume knows that this same package is not going to cost them $39.60 as more volume will earn percentage points off of this daily rate – perhaps a 25% discount.

But how do you know if a 25% discount rate is a good deal based on your shipping volume? UPS or FedEx do not publish a set scale showing that if you shipping a certain amount you will get a specific rate. Maybe you could get a 35% discount? How do you know to ask for 35% and not 55%? This is where benchmarking comes in.

Businessdictionary.com defines benchmarking as “a measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers,” and claims the main objectives of benchmarking are: “(1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high performance levels, and (3)to use this information to improve performance.”

Many 3rd Party Negotiators live and die by their benchmarking. This is the secret sauce that allows 3PNs to convince shippers to hand over 20-50% worth of potential savings to them. STOP PAYING FOR THIS. Refund Retriever gives this to your for free. Thats right, F-R-E-E! For each service you use, Refund Retriever will benchmark your data with similar-sized shippers. We do not share any of their confidential information with you – just a tick on a graph. You can see where your rates stack up with other shippers.

reports-example-benchmark-discount-low2-l

Take a look at the graph above. You are the red dot and other similar-sized clients are the blue dots. Does it look like you are getting a good deal? Should you go to your account rep and ask for a 5% better rate on your 2nd day air or 15% rate on your ground shipping? WIth Refund Retriever you will have all of this information at your fingertips 24-7.

This is not rocket science, and you should not be paying thousands for some outside service that has more data than you. Skip the middleman. Sign up with Refund Retriever and start saving instantly with our late package GSR refunds and take advantage of our FREE small parcel benchmarking.

Brian Gibbs

Author Brian Gibbs

More posts by Brian Gibbs

Brian Gibbs | President of Refund Retriever

Brian Gibbs founded Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever's primary focus is FedEx and UPS parcel invoice auditing. After graduating from Texas A&M University in 2001, he then graduated from the University of Houston in 2004 with a JD and MBA. Gibbs has been featured in Forbes, Entrepreneur and other publications discussing parcel auditing, shipping, e-commerce and more. Learn more at www.refundretriever.com or call (800) 441-8085 for more information.

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