Minimizing Shipping Costs

Due to the nature of liquidation goods and their relatively low cost, at times shipping can become prohibitive. There are four main ways to reduce the relative cost of shipping your wholesale liquidation orders: ship multiple pallets at once, pick up from a freight terminal instead of paying residential charges, add case packs to spread shipping over more merchandise, and maximize the space on the truck. This page explains each option with worked examples.

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.

As an example, compare side by side the difference in the landed cost (total cost including delivery) of the goods when purchasing 1 pallet at $750/pallet as opposed to 3 pallets. The 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).

Option 2: Ship to a Freight Terminal to Save on Residential Charges

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 truck, van, or trailer
• The fuel cost of driving to the terminal and back
• The time it will take you

Often, 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: Add Case Packs to Spread 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.

For example: a customer is initially purchasing 1 pallet of water dispensers for a total of $540 in merchandise + $220.90 shipping (almost 30% of the total investment goes to shipping). When adding 2 case packs, the customer’s shipping cost only increases by $9.91. Now the customer spends $975 on merchandise + $230.90 on shipping, and the total spent on shipping is reduced to only 20% of the total investment.

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 and 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 examples to illustrate the potential savings.

Example: 24 pallets + shipping compared to 48 pallets + shipping

Original order:

• Landed cost/pallet: $383.33
• % paid in shipping: 8.70%

Modified order:

• Landed cost/pallet: $366.67
• % paid in shipping: 4.55%
• Savings per pallet: $16.67
• % saving: 4.35%

Example: 24 pallets + shipping compared to 24 pallets + 2 extra pallets added to the back of the truck

Original order:

• % paid in shipping: 8.70%

Modified order:

• % paid in shipping: 6.56%

The above examples are also extremely valid if you are eligible for our flat rate SoCal shipping specials. Read more on our shipping information page.