Balancing shipments through multiple parties

As many of you know, we’ve started using UPS as a shipping option for international shipments. Part of the reason for this is due to pricing – it’s actually cheaper (marginally) to ship to some countries with UPS with our discounted rates than with Canada Post. A side goal is to reduce our cost of shipping to the US to a more manageable level for large shipments.  While the Small Packets USA costs is extremely reasonable for shipping, it only works for packages up to 2kg.  That means that most of our US orders are for smaller products.

Currently, we are on a tiered discount level with UPS, with shipping costs reducing as we spend more on a rolling basis.  It’s a good system, especially at our current spend levels since it gives us specific goals to shoot for in terms of shipments.

However, to get the most out of it, we need to hit the next tier up. Unfortunately, it’s a chicken and egg scenario – we can’t provide good rates till we ship a lot, but customer’s won’t purchase from us till we get good rates.  So occasionally, we balance out shipments by contacting individual customers who are shipping outside of Canada to see if they’re okay with us shipping via UPS rather than Canada Post.  It’s more work, but the goal of course is to eventually move up the tiers and get a decent (and consistent) shipping rate.

The obvious question is why don’t we move to UPS in Canada? The simple answer is that it’s more expensive to use UPS for most shipments in Canada, even at the best discount rates UPS can provide us.  As such, it makes more sense to keep Canada consistent with Canada Post and move to cheaper rates with them.  Of course, we’re now at a size that moving from one tier to another requires a significantly higher number of shipments.