Your Shipping Partner Can Make You or Break You

posted in: Nundinae | 0

I’m convinced that choosing the right shipping partner is key for ecommerce merchants to succeed. Even though Canada still has some “catch-up” to do, comparing to the US, ecommerce is growing in the country. And people want to get their purchase fast and they don’t want to pay much for it.

Jeff Braverman, from Nuts.com, says that “The real competitor for every online business is Amazon. People want free shipping on $20 orders. That’s really tough for us. You can negotiate on the cost side with UPS and FedEx, or maybe you can look at raising your prices to build shipping in.”

A good way of looking at shipping costs is to include them in your marketing expenses. At the end, you build your brand servicing your customers fast, not expensive and in an efficient way.

Shipping rates are high

In Canada, shipping is not cheap, au contraire, I find it expensive. When you compare shipping rates in Canada and the US, you can be jealous from our neighbours in the South.

This is an example of rates comparison between Canada Post and USPS. In Canada, shipping from Montréal to Vancouver; and in the US from Miami, Florida to Concord, California. For Canada, rates are in the range of CAD 15.60-CAD 44.75, and in the US between USD 5.25 – USD 47.43. You can see the detailed information in this MS Excel file.

Who should be your shipping partner? What should you consider?

These are four basic points we invite you to consider:

1- Rates.
2- Local presence is important. Where to drop-off your packages? or does the shipping company come to your office or warehouse and pick up your parcels?
3- The courier’s delivery policy.
4- Does the courier specialize in B2B or B2C?

Talking about local presence in Canada

This is the information we have been able to gather from three of the main couriers servicing Canada, as of December 2014.

– UPS has 750 access points in Canada (191 in Québec);
Canada Post has 6,000 Post Offices accross the country;
FedEx has over 1,000 locations accross Canada.

Jim Bena, VP of Marketing for UPS Canada, said in an interview published by the newspaper Le Soleil, that as more Canadians are shopping online his company has seen an increase of 11% in parcel deliveries in 2014 and UPS has added 62,000 sq. ft. to its Missassauga, Ontario based facility.

Many couriers are flirting with Canadian merchants to conquer their heart and pocket. Parcel deliveries is increasing in the Canadian market as letters and cards are declining. Canadians are buying online more, and from anywhere using their mobile devices.

At this moment, Canada Post is the king of parcels in Canada, delivering 67% of parcels in the country. They claim to be at 2.5km of reach for 78% of the population, and are offering same-day delivery in cities like Toronto and Vancouver.

Companies like UPS and FedEx have the possibility to invest more money in order to gain marketshare. At the end of this, it will always the consumer the one who will profit the most.

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