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What Should I Pay for a Shipping System?

Posted by Greg Marone on Jan 14, 2017 8:00:00 AM

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If you’re shipping goods to your customers, you already have a shipping system. Perhaps you’re using the system provided by your carrier or an alternative free service. Therefore, you might wonder why you would ever consider paying for a different shipping system.

To answer this question, you need to consider your individual circumstances and ensure that you fully understand the benefits that paying for a shipping system could bring to your business.

When (and Why) Should You Pay?

In general, you should pay for a new shipping system if and only if it will pay for itself within the first 12 months of use. If you are unlikely to regain the cost of a new system, you should continue using the one you already have.

So how does a shipping system "pay for itself"? By saving your company time or money in warehouse management operations, as well as by opening up new opportunities for your business. By identifying the inefficiencies associated with your current shipping system and looking into paid shipping systems that could help you solve them, you should be able to estimate how much a new system could cut costs or raise revenue for your organization.

Also, have you ever considered the limitations that your current shipping system places on your organization?

For example, you might find that your shipping system blocks you from working with big companies like Amazon, as these giants may impose requirements that your system can’t fulfill, such as printing shipping labels in a certain way. Upgrading to a shipping system that can meet these requirements could open up new markets for your company.

What Will Your Investment Look Like in 12 Months?

If you're a shipping manager, these kinds of benefits may seem obvious, making the decision a "no brainer." But if you're not, you may still these this as an unnecessary expense. If you fall into this latter category, there is a simple bit of math you can do ahead of greenlighting a paid shipping system: calculate the cost-cutting benefits such a system would provide you, and measure that against your ability to demonstrate that your investment will be paid off within the year.

For instance, one of the major benefits of a multi-carrier shipping system is the ability to rate shop services to seelct the lowest cost service that still meets the delivery requirements. If this saved you even 50 cents per package, the manthly savings would be significant. This kind of figure can be very convincing, as it gives a clear idea of how much the company will save over each month, quarter or year. Or you may find that it's not the right choice for you.

It May Not Always Be the Right Answer

Paying for a shipping system isn’t always worthwhile. If you are involved in running a very small business, you may decide to stick with the free carrier-provided shipping system you already use - and that's totally fine.

However, if your current system is slowing down your shipping process or preventing you from working in important retail environments like Amazon Marketplace, then investing in a new shipping system could not only open up exciting new opportunities for your business, but also streamline your operations along the way.

Pack and Ship Station

Topics: shipping costs, shipping system