Why 'Rate Shopping' Paints an Incomplete Picture

‘Rate shopping’. If you ship packages, you’ve almost certainly heard the term. Rate shopping reflects an attitude that in the end cost is king and you should pick the cheapest possible option to ship your packages. It turns out, though, that even though cost is obviously important, there are a multitude of other factors that make focusing solely on cost a foolish decision. In this article we’ll break these factors down into two categories: carrier and customer details and cost.  

Carrier and customer details

Some of the details that are important to consider as you select which carrier to ship a package with include questions such as, “What is the carrier’s track record with delivering items on time?" "How are packages delivered, and are they often damaged by the carrier?" And, "What is the carrier’s performance like to specific zip codes?” It is also important to consider who your customers are and what they are expecting, with questions like, “Where do they live? And how fast do they expect the package to arrive?”  

These are questions that usually require some research to answer, regarding both your customers and the carrier, but after gathering data you will be able to make a much better informed decision when it comes to deciding with which carrier to ship your packages. Let’s dive into the final category of details to consider as you plan out your shipping: cost.

Cost

Cost is the most obvious factor that shippers think of, and it is one of the most important. However, when most shippers think of the cost of shipping packages, they are only thinking of the cost associated with shipping the package and not the costs that they might incur if they neglect the other factors associated with shipping products. What if you select a carrier that damages a high number of packages and run into decreasing customer loyalty and lots of damaged inventory? What would happen if you selected a carrier to ship packages to customers living in rural areas and the carrier’s delivery times were much slower than anticipated, leading to frustrated customers?

These details expose an important truth: shipping is complicated. While ShipCaddie TWMS allows users to create custom business rules to determine how they allocate shipments and features integrations with all the nation's top carriers, there is much more than meets the eye when looking at the current costs of shipping a package in the software interface. It has never been more important to do the research on how to manage your business’ shipping strategy, and the term ‘rate shopping’ tends to lead shippers down the wrong path. The answer is much more nuanced.