Why USPS Is Such a Big Opportunity For Us

Offering USPS is such a huge opportunity for us that I want to spend a few posts breaking down the project itself and why it’s such an opportunity.

When we moved in to our industrial park in 2008, one of the downsides was that the US Postal Service didn’t pick up or deliver mail to the park. Over time we’ve come to learn that this is pretty rare. At the time though, it wasn’t a big deal. We got a PO Box, created a returns page with our two different addresses, and got to work. At the time we shipped international via USPS and we just drove packages over to the post office. We just weren’t big enough for it to matter, and when we did stop shipping international it was one of the many deciding factors.

We never really considered or cared about shipping domestic orders via USPS because FedEx was better in every way: lower rates, better tracking, better claims, better service.

Over time though, that’s changed and USPS has gotten a whole lot better. I’m personally very bullish on the postal service, but that’s a topic for a future post. They’ve been able to improve their tracking, claims processing, service to clients of our size, and most importantly have lowered rates when FedEx and USPS have consistently increased them.

Our order distribution had always skewed large. We ship a lot of tools, a lot of gallons, and in general just a lot of heavy things. Last year when we introduced SmartPost we tested out some subsidies to see if it would grow business. Orders under 2 lbs shipped for $5.99. Somewhat to our surprise, small orders exploded, more than offsetting the subsidy. Which led us to ask the obvious question: what would happen if we were able to ship USPS, a cheaper, faster, more reliable service?

We hypothesized that it could explode growth on the low end. And by “low” I mean light, not necessarily cheap. Roughly half of our products are light enough that they can be shipped First Class Package Service for $3 or less to anywhere in the US in 3 business days or less. We were likely missing out on considerable sales of coatings like 22ple because there wasn’t a low-cost shipping option (even that SmartPost $5.99 wasn’t that great, especially when it can take up to 8 business days to get there). Not to mention small orders when a regular customer needs just a towel or a pad. Now they can get it quickly and cheaply.

Combine that with opportunities using a variety of the USPS Priority Flat Rate Boxes and generally low USPS Priority rates for light packages, and the opportunity became bigger and bigger. I should mention that for anything heavy at all our FedEx rates are still vastly superior. In many ways they compliment each other perfectly. In conjunction, we’re able to offer fast, low-cost shipping options for almost every order type.

Now we just had to figure out how to get a pickup…

1 comment on Why USPS Is Such a Big Opportunity For Us

  1. […] up where I left off on my last post, the real challenge in making USPS happen for us wasn’t technical, operational, or financial, […]

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