Thursday, June 9, 2011

Saving Money on Your Shipping Bill

I didn't make the best The UPS Store owner from the start.  No one had ever told me, and it never dawned on me in the first year, that I should go through my weekly UPS invoice to review the adjustments and other fees that seem to pop up.

If the charges weren't valid, a simple phone call (or click of the mouse) and the expense would be taken back off the invoice, no problem.

Around this same time, it also dawned on me that if the packages arrived late, I was entitled to a Guaranteed Service Refund from UPS.   I asked my day manager to track each of the packages that had been shipped in the prior week to see if any had arrived late.  She found very few and it took her more than half a day as she was constantly interrupted by having to work the counter.  To this day, I'm sure many potential GSR's slipped through the cracks simply because the work was so tedious and she was multi-tasking.

A few years later another store owner steered me toward a software company that had a software application that allowed me to upload the previous week's shipping information and it would automatically track all the packages and find the packages that were eligible for GSRs.  It worked OK and it didn't take too long to run.  Maybe 10 minutes a week.


Call me old school, but something rubbed me wrong about the company from the start.  Their approach to selling the software was "let me run a few of your past invoices to see what you would have saved."  Nothing wrong with a free run at the software I thought.

They ran my invoices and found some substantial savings.  The cost for the software?  $500 per year.  Based on my shipping volume and refunds it found, it paid for itself but not dramatically so.  More on that in a minute.

About a year later, I turned the day to day management of the store over to a manager and took an executive position at another company.  This company happens to be a very large franchisee in a different industry altogether, but with similar economics.

It so happens that my new employer spent nearly three times as much on their weekly shipping invoice as I did.  All for their own account!  (Yes, I had dreams of somehow figuring out how to run my employer's business through my account or hell, even just grabbing the drop-off business!)

And as a good employee, I had an idea on how to save the company money.  Surely they have packages that are eligible for GSRs.  I happen to know a software package they can buy.  I dutifully gave them the saleman's name and had them call.  I already told them the price would probably be around $500/year.

A week later, I had a chance to speak to the mailroom associate.  Same story as mine.  He got a few past invoices, showed them their savings, and then shot them a price based on the shipping volume he saw.  Same software, same everything, but a dramatically different price.  Unfortunately for the salesman, he didn't know this prospective customer had been referred by me and knew the price I was paying.

When my annual renewal fee came due, I declined to renew my software.  But now I was out software to check for GSRs.

The solution?  I decided to work with a development team and create my own software for finding GSRs. 

It's taken two years of work with web site designers and programmers, but I was finally able to get the application where I wanted it and am proud to say we use it weekly to shave money off our shipping bill.  (Yes two years.  Software development from the ground up is similar to remodeling a house.  "While we have this torn out, why don't we go ahead and just add another room to the house.")

=>  Shameless Plug Alert

After realizing I couldn't be the only UPS Store owner with this issue, I had the application re-designed so that other store owners could use it to find GSRs for their own account.  I took out the crap I hated, like pricing based on how much money it could save you, the big up-front fee, and having to download software to my computer, and reconfigured it to be a simple, easy to use online application.  You can try it for free for two weeks at Haystacksonline.com