The Cost Savings of Drop Shipping

Today’s post on drop shipping is from our friend John Thackray at Thompson Mailing.

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If you haven’t done so already, you should consider incorporating drop shipping into your direct mail plans.

Drop shipping is the act of sending qualified mail to either a BMC or SCF surpassing your local post office as the point of entry. This results in postal cost savings.

The sample analysis below shows the difference of postage between a mailing being shipped local entry (your local post office) and the same mailing going out as a drop shipment (drop shipping). 

As you can see, the postage savings can be pretty substantial.  We chose a job that was prepared and mailed as a drop shipment for this analysis.

Drop shipment:                            Local Entry:

Quantity: 1,250,026 pieces              Quantity: 1,250,026 pieces

Drop ship penetration                      Drop ship penetration

BMC: 52.82%                                 BMC: 0%

SCF: 43.09%                                 SCF: 0%

Local: 4.09%                                 Local: 100%

Postage: $240,022.15                     Postage: $284,433.04

This particular mailing has a postage savings of $44,410.89 less freight preparation and fuel surcharge.  In most cases these costs remain less than half of the postal savings.

If you have any questions about drop shipping, please contact Matt Cote: matt (at) ballantine.com

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Tags: Drop Shipping, Postage