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Minimizing Shipping Costs

Minimizing Shipping Costs

Due to the nature of Liquidation Goods & their relative low cost – at times shipping can become prohibitive. There are various methods you can use to reduce the relative cost of shipping:

Option 1 – Ship Multiple Pallets

SHIPPING MULTIPLE PALLETS IS OFTEN CHEAPER THAN SHIPPING JUST ONE.

Much of the initial cost of shipping covers the pick-up, the delivery and the administrative paperwork. These are generally fixed costs and shipping one pallet will always be relatively more expensive than shipping multiple pallets. After that initial charge, the cost for the second or third pallet only goes up marginally. This is especially true when shipping to residential addresses and/or when shipping with a lift-gate since both are relatively fixed flat charges.

Using the Example you can compare side by side the difference in the landed cost (total cost including delivery) of the goods when Purchasing 1 Pallet for $750/pallet as opposed to 3 Pallets. In the example below Buyer could purchase:

  • 1 pallet for $750 + $145 shipping for a total landed cost of $895 OR
  • 3 Pallets for $750/pallet + $275 Shipping for a total landed cost per pallet of $841.67 ($53.33 cheaper per pallet or 5.96% Cheaper).
Pallet Shipping

Option 2 – Shipping to a Freight Terminal Can Save you the Residential Charges

SHIPPING MULTIPLE PALLETS IS OFTEN CHEAPER THAN SHIPPING JUST ONE.

Although it can be much more convenient to receive the merchandise directly at your door, it does cost a little bit more and there are options to avoid those additional residential charges. One way to avoid these additional residential/liftgate charges is to go pick up your pallets at a local freight terminal. There is a freight terminal in or near every major city, and you can rent a U-Haul or drive over with a pickup truck to get the merchandise from the terminal to save yourself some money. There are some things to consider to determine if this will be worth it for you:

  • The distance of the terminal from your home
  • The rental cost of a U-Haul/Pick-Up/Van if you do not have use of a track or van or trailer
  • The fuel cost of driving to the terminal and back
  • The time it will take you

Often times, the residential surcharge is very reasonable once you factor in the time and out-of-pocket expenses you would incur by picking up the pallet from the terminal yourself.

Option 3 – Adding Case Packs Spreads Shipping Over More Merchandise

If you only have space for 1 or 2 pallets but the shipping costs are rather elevated, you can opt to add a couple of case-packed items to your order. Case-packed items are items which when ordered alone, are typically shipped by Courier such as Fedex/UPS. Case packs are sold in smaller lots, packed inside small boxes that are relatively low weight and can be consolidated with most pallet orders and shipped at little to no additional charge.

In the Example below Customer initially is purchasing 1 pallet of Water Dispensers initially for a total of $540 on Merchandise + $220.90 shipping (almost 30% of total $ investment goes in shipping). When adding 1 or more case packs (2 in this case) Customers Shipping Cost only increases by $9.91 so now customer spends $975 on Merchandise + $230.90 on Shipping – result being that total $ spend on shipping is reduced to only 20% of total investment).

Cart Example Cart Example 2

Option 4 – Maximize Space on the Truck

When purchasing larger loads of merchandise such as full truckloads, it is also a good idea to use up ALL of the space on the truck. In the large majority of cases, shipping rates for full truckloads or containers are FLAT and do not change whether the truck is filled to capacity or half empty. Depending on the type of pallets & trailer/container used 24 to 52 pallets can typically fit on a truck.

If for instance you are purchasing a 20 pallet load, there may still be plenty of space available. The cost of shipping the truck will not change, but adding more merchandise to fill the truck all the way will reduce the percentage of shipping that you pay on the overall load. This, in turn, will reduce your landed cost per pallet or unit and will increase your potential profit. Below are a couple of mathematical examples to illustrate the potential savings

Via Trading Truckload

Buyer orders 24 pallets + shipping compared to 48 Pallets + Shipping

Original Order

Item Qty Price Ext Price
Item Qty Price Ext Price
WM Pallet 24 $350 $8,400
Shipping $800
Total $9,200
Landed Cost/Pallet $383.33
% Paid in Shipping 8.70%

Modified Order

Item Qty Price Ext Price
WM Pallet 48 $350 $16,800
Shipping $800
Total $17,600
Landed Cost/Pallet $366.67
% Paid in Shipping 4.55%
$ Savings per Pallet $16.67
% Saving 4.35%

Buyer Orders 24 Pallets + Shipping compared to 24 Pallets + 2 Other Pallets they purchased to add to the back of the truck

Original Order

Item Qty Price Ext Price
Item Qty Price Ext Price
WM Pallet 24 $350 $8,400
Shipping $800
Total $9,200
% Paid in Shipping 8.70%

Modified Order

Item Qty Price Ext Price
WM Pallet 24 $350 $8,400
New Footwear Pallet 2 $1,500 $3,00
Shipping $800
Total $12,200
% Paid in Shipping 6.56%

Above examples are also extremely valid if you are eligible for our SoCal shipping specials.

Read more about out our Flat Rate SoCal Shipping Specials.

Via Trading Chat