How I Saved 50% on Shipping in 90 Minutes

There’s going to be a warning here. If you read like me and want to skim this article to find the magic service or website on how to save money on shipping, I have bad news: it's a story of luck and opportunity.

This is a story that truly happened, which will save me untold thousands in shipping costs, but the real lesson to be learned is how I put myself in this situation. So with that caveat out of the way, on with the story.

I've always been one of the “engineering” types. Good at analyzing the problem, finding a solution and delivering on results. I had this belief that merit alone was good enough. Little did I know that I was clueless. And I have Mike to thank for this lesson.

Back around 2006, Mike and I were two of the top affiliates in a popular industry at the time, though we had never met. When a mutual client requested their top producers to come to an invite-only event in New York, I felt it was an intriguing opportunity to meet all the major players in the industry at once.

It ended up being an incredibly fortuitous event for many reasons. One, I met Mike and we’ve been in business together for almost a decade now. Second, it’s also where I learned that Mike was getting paid 20% more for his leads, even though I was the #1 producer for the same client!

To say I was shocked was an understatement.

All this time, I had thought I was a negotiation master, by using my clients’ data against each other and knowing my lead values. But for all my engineering logic, data and suits, I was being run around in circles from an unassuming guy from Virginia in a polo shirt.

Where did I go wrong?

And how does this relate to saving on shipping?

The answer is personal relationships.

One of the reasons I had never gone to affiliate industry conventions was that I felt it was a waste of time. My business model was based on SEO and I had a deep technology background and understanding of search that put me leaps and bounds above the pack (at the time). The idea of talking to competitors only interested in obtaining my methods or inadvertently giving away trade craft seemed insane.

Ironically, Mike had a similar line of thinking regarding conventions, but nevertheless was a regular on the circuits and consistently talked to account managers and key people. To this day, a decade later and retired from the industry, he’s still friends with many of those same people. Mike’s nature isn’t that he’s just a people person, but that he’s actually genuine. A rare combination.

So while I had focused on delivering results with ruthless efficiency, Mike focused on building relationships. Clients wanted to work with me because I made them money, but clients were happy to work with Mike because they wanted to.

In the decade that I’ve worked with Mike, this lesson would be one of my most valuable that I would learn from our partnership. This lesson paid off quite handsomely when I began looking for ways to save on shipping costs.

As an ecommerce company, shipping is the equivalent to rent for a brick and mortar. It’s a cost of doing business that soaks up a good 20-30% of your gross profits. Anything that can be done to reduce shipping costs is an immediate boost to the bottom line, so trying to negotiate shipping with carriers is always a top priority.

I had recently found two companies that would collectively combine buying power across multiple shipping accounts to provide discounts to their clients. This sounded far easier than trying to bid account reps from FedEx and UPS against each other, so picked up the phone and made the call. Note that I said picked up the phone instead of sending an email. It’s too easy these days to just fire and forget an email. Picking up the phone is sales and marketing 101.

One company answered and asked a few cursory questions about myself and my business and then directed me to a form to fill out. I finished the application and within 30 minutes had a call back from an account specialist.

The account specialist was very personable and knowledgeable and we ended up chatting a bit during the setup. I asked him how he knew so much about the industry and it turned out that he was actually the owner of the company. I was impressed, because for the owner to make the call means that sales is a vital part of this business or that it’s a small enough company that the owner still cares; either way you’re talking to an important decision maker.

I asked him about his business, because I was genuinely interested and learned a lot about his business model and also how he was marketing. Since my experience has been completely in internet marketing and SEO, I asked him about the efficiency of his campaigns and then gave him some interesting suggestions he could try. This took him aback, so he asked about my background and we got to chatting more and bouncing ideas back and forth.

Eventually, what started out as a regular account setup call ended up being a highly informative 90 minute phone conversation. And before the end of the call, without even me asking, he discounted my shipping rates to 53% off the rack rate. Here I am, running a fledgling ecommerce store less than 12 months old and I’m already getting Fortune 500 rates out the door.

Now am I going to solely credit myself with this amazing stroke of luck?  Of course not. The owner of this company was very generous with this offer and is the one that controlled the outcome. But what did I do?  I made it easier for luck to find it’s way to me- by building that personal relationship.

I didn’t have to sit and talk on the phone for over an hour.

Nothing required me to be interested in this person’s business.

But you know what?  I wanted to get to know him and his business and he was already a skilled salesperson that he approached me in a way that made us both want to exchange information.

It worked out well for the both of us and that’s what business is all about: win-win. Not I win, you lose. Not you win, I lose.

It’s win-win.

Grant Chen

Grant currently owns and operates two ecommerce businesses selling kitchen products and clothing. He is also a partner in a restaurant franchise with two locations and has over a decade of experience as an entrepreneur and web developer. He lives in the beautiful city of Seattle, Washington, and when he's not at his laptop with a coffee, will be found skiing or hiking in the mountains .
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