Question on heavy product delivery service for start up business (Philadelphia: costs, marketplace)

[tigertrader]

Hello, everyone,

I'm starting a business to sell power generators. But I've found out that delivery cost (LTL) is unbelievably high from UPS, FedEx. For example, a 88 bound generator they would charge about $300 for delivery from Philadelphia to CA. I saw some other dealers on eBay who sell generators can offer free shipping to anywhere in US. I'm wondering how could compete with them with such cost delivery.

Any suggestions or tips?

Thanks alot.

-Michael

[deadhead948]

You're comparing yourself to established businesses that give ltl companies hundreds of shipments every week throughout the year. They've worked out deals with the salespeople from these companies for discounted rates. Many of them sign a contract with one of those companies and when the contract expires all the different ltl companies get to bid on the next contract. If you're planning on using ltl you need to speak with the salespeople from the different companies about discounted rates. Remember, those trucks probably don't even get 10 miles a gallon of diesel and you're talking over 3000 miles. That's not even counting their largest expense which is labor. With those "unbelievably high" rates you're speaking of, many of the ltl's end up operating at a loss at the end of some quarters. It's not easy!!! You end up spending more on the shipping than the product is even worth sometimes.

[Not Quite Right]

So your starting a business and you just found out what it costs to ship your product now?!? Hmmmm...... You need to cut back you area by 75%. Philly is within 8hr drive to 25% of the population of the US. You probably cut your shipping costs by 2/3. Now go out and get prices, they should sound a little more reasonable. Then let your success dictate if you need or want to expand. You may be able to deliver the close ones yourself if you get a truck.

[tigertrader]

Thanks for replies from deadhead948 and Not Quite Right. My strategies are starting with local delivery and picking up first. Cutting back the area is a smart idea.

Thanks a lot.

[Not Quite Right]

This could be your cheapest shipping alternative.

uShip - The Online Shipping Marketplace - Ship Freight, Furniture, Cars or Moves

[tigertrader]

Thank you. Not Quite Right.

[ant1024]

Also google freight companies, that is what the other companies are using most likely. Forward Air, ABF freight, etc.

Good luck.

[tigertrader]

ant1024, any tricks with those fright companies to get better discount rates?

[ant1024]

Sorry I do not, but if you call them and ask about getting an account set up and any discounts that they offer. I am sure you will get better rates depending on the volume that you are able to ship out every month.

Good luck!