Shipping to Canada: Taxes, Duties & Tariffs

September 14th, 2018 Comments off

 

With over 20 million English-speaking digital buyers, it’s easy to see why Canada is an attractive place to sell for U.S. based e-commerce merchants. Canada even has one of the strongest e-commerce infrastructures in the Americas, including broadband internet access and widespread mobile phone usage for completing online transactions. Selling internationally doesn’t come without its challenges, however. Like any other country, Canada has duties, taxes and tariffs you will need to be aware of. If you haven’t gone through the process to become a Non-Resident Importer your Canadian buyer is responsible for duties, taxes, and tariffs that are imposed on imported goods.  It is important you communicate these additional fees to your customers at checkout so as to avoid unpleasant surprises at the time of package delivery.

 

Duties and Taxes

There are 3 kinds of duties and taxes for items being imported into Canada:

  1. Goods and Services Tax (GST): This is a 5% federal tax that applies to items being sold to Canadian customers for domestic consumption.
  2. Harmonized Tax (HST): A handful of Canadian provinces have opted to harmonize their provincial sales tax with the general sales tax and the total rate is known as Harmonized Tax.
  3. Provincial Sales Tax (PST): Provinces that do not participate in the HST collection process impose their own taxes at the local level. The tax rate varies by province and can range from 5% to 9.75%.

 

Tariffs

Along with duties and taxes, your Canadian customer may also need to pay tariffs. Tariffs depend on the country of manufacture, not the country from where the product is purchased.  NAFTA eliminates tariffs on all goods that are manufactured in the U.S. and shipped to Canada.  However, if your product includes components that were manufactured outside the U.S., then your Canadian customer will need to pay tariffs on those components.

 

Shipping to Canada

Over one-third of Canadian e-commerce sales are currently coming from U.S.-based websites. That’s nearly $50 billion dollars flowing in from north of the border. With annual growth predicted at over 12% for the next three years, now is the time to open your business to eager Canadian buyers. If you are looking to sell in Canada be sure to check out the Stamps.com Guide: How to Ship to Canada.

Managing Returns While Maximizing Profits for E-Commerce

May 11th, 2018 Comments off

We’ve all seen an infomercial that promises to let you return an item if you’re at all unhappy with your purchase. “If for any reason you’re no longer satisfied with your Snuggie, simply return it for a full refund. No questions asked.”

Many e-commerce return policies are based on this philosophy of risk-reversal. If you take away the risk of purchasing with a generously crafted return policy, people will be more likely to buy … But wait there’s more!

There’s much more to this story, as uncovered by a recent report from researchers at the University of Texas at Arlington (UTA). Published in The Journal of Retailing, the report looks at the effects of return policy leniency on purchases and returns in retail.

While the effects of return policy on retail sales are fairly well known, less is understood about the factors that influence people to return — or not to return — a product they’ve purchased. This report answers important questions for retailers about how they can use their return policy to achieve better business results.

The 5 Essential Elements of Return Rates

What are the ways to minimize returns and increase online sales? The report looked at the five most important elements of return policies and how each affects the rate of returns and overall profitability. These five elements are:

1) Time Leniency
This is the time period during in which a return is accepted by the retailer. Is it a 30-day return policy, 60-day return policy?

2) Money Leniency
This is how much money the retailer refunds for a return. Do you provide a 100 percent money-back guarantee, charge a restocking fee, etc.

3) Effort Leniency
The amount of hassle for the consumer to complete a return. Does it involve filling out a form or presenting identification to complete a return?

4) Scope Leniency
These are the products covered by the return policy. Are sale items included?

5) Exchange Leniency
What consumers get for returning the good. Are they given cash, store credit or replacement goods?
Report Results: Ways to Reduce Returns & Increase Sales
If you want to increase sales, the study shows that hassle-free returns (effort leniency) and money-back guarantees (money leniency) are the best incentives for buyers.
To decrease the dreaded returns, your policies should decrease the return options (exchange leniency) and increase the return periods (time leniency). Interestingly, people are actually less likely to return a product they’ve had for a longer period of time. It’s been theorized that this phenomena occurs because people often become more attached to items the longer they have them in their possession. That translates to longer return policies actually working to lower return rates and improve profitability.

 

Crafting the Right Return Policy
How will you use the findings to help reduce returns? As the report shows, crafting the right return policy can help drive more online sales for your e-commerce business. It can also help you avoid more returns in the mail. Look at each of the five return policy dimensions against your own policy to find new opportunities to grow and become more profitable.

Categories: Ecommerce Shipping Tags:

Stamps.com Launches International Large Envelope/Flat Service

January 18th, 2018 Comments off

 
Now the Most Affordable Way to Send Small/Flat Merchandise Internationally.  
Stamps.com has created an affordable replacement for the discontinued USPS First Class International Flat Service for Merchandise. If you haven’t heard,  starting January 21st, online retailers will NO LONGER be allowed to ship merchandise using First Class Mail International Large Envelopes/Flats – the USPS will ONLY ALLOW VALUELESS DOCUMENTS due to international Customs changes. Luckily, Stamps.com has the answer.

Starting, January 21st, Stamps.com will offer a new International Flat service for retailers.  This new service allows you to continue to ship merchandise in a Large Envelope/Flat to an International destination at a significant cost savings compared to First Class Package International Service. Best of all, this service continues to utilize the powerful USPS delivery network.

3 Great Reasons to Choose Stamps.com’s International Flat Service 

#1 Incredible cost savings – save up to 65% compared to First Class Package International Service

#2 Customs Forms will be sent electronically – no more forms to print

#3 Get better visibility with more tracking events

 

How Does It Work?
Stamps.com customers can immediately use the new service by simply selecting “First-Class Mail International Large Envelope/Flats” as the mail service inside the platform. The shipping label for this new service will differ from other international labels in two ways:

  1. The shipping label includes both the recipient’s international address as well as the domestic address of the Postal Processing Facility.
  2. The shipping label does not include any customs information – Customs Forms will be sent electronically.


Save Up to 65% Compared to First Class Package International Service
This new International Large Envelope/Flat service can provide huge cost savings compared to First Class Package International Service.  Savings can be over $15.00 per Large Envelope/Flat, depending on weight and country destination!

NOT A STAMPS.COM CUSTOMER? – SIGN UP TODAY TO TAKE ADVANTAGE OF THIS NEW, MONEY-SAVING SERVICE!  (Note: After sign-up, you must call into Stamps.com Customer Support (1-888-434-0055 to get your International Flats activated on your account.)

 Check out these unbeatable rates!

First Class Package
International Service
Stamps.com International Flats
Weight Zone 1
Canada
Zone 1
Canada
Savings with Stamps.com International Flats
1 $9.50 $4.79 $4.71
2 $9.50 $5.00 $4.50
3 $9.50 $5.21 $4.29
4 $9.50 $5.41 $4.09
5 $9.50 $5.62 $3.88
6 $9.50 $5.83 $3.67
7 $9.50 $6.04 $3.46
8 $9.50 $6.25 $3.25
12 $15.20 $7.29 $7.91
16 – 1 lb. $15.20 $8.33 $6.87
20 $15.20 $9.37 $5.83
24 $15.20 $10.41 $4.79
28 $15.20 $11.45 $3.75
32 – 2 lb. $15.20 $12.49 $2.71
36 $23.99 $13.53 $10.46
40 $23.99 $14.58 $9.41
44 $23.99 $15.62 $8.37
48 – 3 lb. $23.99 $16.66 $7.33
52 $35.39 $17.70 $17.69
56 $35.39 $18.74 $16.65
60 $35.39 $19.78 $15.61
64 – 4 lb. $35.39 $20.82 $14.57
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 2
Mexico
Zone 2
Mexico
Savings with Stamps.com International Flats
1 $11.64 $4.79 $6.85
2 $11.64 $5.47 $6.17
3 $11.64 $6.14 $5.50
4 $11.64 $6.82 $4.82
5 $11.64 $7.50 $4.14
6 $11.64 $8.17 $3.47
7 $11.64 $8.85 $2.79
8 $11.64 $9.53 $2.11
12 $20.43 $10.98 $9.45
16 – 1 lb. $20.43 $12.44 $7.99
20 $20.43 $13.90 $6.53
24 $20.43 $15.36 $5.07
28 $20.43 $16.81 $3.62
32 – 2 lb. $20.43 $18.27 $2.16
36 $31.35 $19.73 $11.62
40 $31.35 $21.19 $10.16
44 $31.35 $22.64 $8.71
48 – 3 lb. $31.35 $24.10 $7.25
52 $45.13 $25.56 $19.57
56 $45.13 $27.02 $18.11
60 $45.13 $28.47 $16.66
64 – 4 lb. $45.13 $29.93 $15.20
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 3
Australia/Asia
Zone 3
Australia/Asia
Savings with Stamps.com International Flats
1 $13.54 $4.79 $8.75
2 $13.54 $5.73 $7.81
3 $13.54 $6.66 $6.88
4 $13.54 $7.60 $5.94
5 $13.54 $8.54 $5.00
6 $13.54 $9.47 $4.07
7 $13.54 $10.41 $3.13
8 $13.54 $11.35 $2.19
12 $22.33 $13.22 $9.11
16 – 1 lb. $22.33 $15.10 $7.23
20 $22.33 $16.97 $5.36
24 $22.33 $18.84 $3.49
28 $22.33 $20.72 $1.61
32 – 2 lb. $22.33 $22.59 -$0.26
36 $33.25 $24.47 $8.78
40 $33.25 $26.34 $6.91
44 $33.25 $28.21 $5.04
48 – 3 lb. $33.25 $30.09 $3.16
52 $50.11 $31.96 $18.15
56 $50.11 $33.83 $16.28
60 $50.11 $35.71 $14.40
64 – 4 lb. $50.11 $37.58 $12.53
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 4
Russia/Eastern Europe
Zone 4
Russia/Eastern Europe
Savings with Stamps.com International Flats
1 $13.06 $4.79 $8.27
2 $13.06 $5.73 $7.33
3 $13.06 $6.66 $6.40
4 $13.06 $7.60 $5.46
5 $13.06 $8.54 $4.52
6 $13.06 $9.47 $3.59
7 $13.06 $10.41 $2.65
8 $13.06 $11.35 $1.71
12 $21.85 $13.22 $8.63
16 – 1 lb. $21.85 $15.10 $6.75
20 $21.85 $16.97 $4.88
24 $21.85 $18.84 $3.01
28 $21.85 $20.72 $1.13
32 – 2 lb. $21.85 $22.59 -$0.74
36 $34.91 $24.47 $10.44
40 $34.91 $26.34 $8.57
44 $34.91 $28.21 $6.70
48 – 3 lb. $34.91 $30.09 $4.82
52 $56.53 $31.96 $24.57
56 $56.53 $33.83 $22.70
60 $56.53 $35.71 $20.82
64 – 4 lb. $56.53 $37.58 $18.95
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 5 – UK/Western Europe Zone 5 – UK/Western Europe Savings with Stamps.com International Flats
1 $13.30 $4.79 $8.51
2 $13.30 $5.73 $7.57
3 $13.30 $6.66 $6.64
4 $13.30 $7.60 $5.70
5 $13.30 $8.54 $4.76
6 $13.30 $9.47 $3.83
7 $13.30 $10.41 $2.89
8 $13.30 $11.35 $1.95
12 $22.33 $13.22 $9.11
16 – 1 lb. $22.33 $15.10 $7.23
20 $22.33 $16.97 $5.36
24 $22.33 $18.84 $3.49
28 $22.33 $20.72 $1.61
32 – 2 lb. $22.33 $22.59 -$0.26
36 $33.96 $24.47 $9.49
40 $33.96 $26.34 $7.62
44 $33.96 $28.21 $5.75
48 – 3 lb. $33.96 $30.09 $3.87
52 $48.93 $31.96 $16.97
56 $48.93 $33.83 $15.10
60 $48.93 $35.71 $13.22
64 – 4 lb. $48.93 $37.58 $11.35
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 6
Southeast Asia/India
Zone 6
Southeast Asia/India
Savings with Stamps.com International Flats
1 $13.06 $4.79 $8.27
2 $13.06 $5.68 $7.38
3 $13.06 $6.56 $6.50
4 $13.06 $7.44 $5.62
5 $13.06 $8.33 $4.73
6 $13.06 $9.21 $3.85
7 $13.06 $10.10 $2.96
8 $13.06 $10.98 $2.08
12 $22.09 $12.81 $9.28
16 – 1 lb. $22.09 $14.63 $7.46
20 $22.09 $16.45 $5.64
24 $22.09 $18.27 $3.82
28 $22.09 $20.09 $2.00
32 – 2 lb. $22.09 $21.91 $0.18
36 $32.78 $23.74 $9.04
40 $32.78 $25.56 $7.22
44 $32.78 $27.38 $5.40
48 – 3 lb. $32.78 $29.20 $3.58
52 $52.73 $31.02 $21.71
56 $52.73 $32.85 $19.88
60 $52.73 $34.67 $18.06
64 – 4 lb. $52.73 $36.49 $16.24
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 7
Africa
Zone 7
Africa
Savings with Stamps.com International Flats
1 $13.06 $4.79 $8.27
2 $13.06 $5.68 $7.38
3 $13.06 $6.56 $6.50
4 $13.06 $7.44 $5.62
5 $13.06 $8.33 $4.73
6 $13.06 $9.21 $3.85
7 $13.06 $10.10 $2.96
8 $13.06 $10.98 $2.08
12 $22.09 $12.81 $9.28
16 – 1 lb. $22.09 $14.63 $7.46
20 $22.09 $16.45 $5.64
24 $22.09 $18.27 $3.82
28 $22.09 $20.09 $2.00
32 – 2 lb. $22.09 $21.91 $0.18
36 $33.01 $23.74 $9.27
40 $33.01 $25.56 $7.45
44 $33.01 $27.38 $5.63
48 – 3 lb. $33.01 $29.20 $3.81
52 $56.53 $31.02 $25.51
56 $56.53 $32.85 $23.68
60 $56.53 $34.67 $21.86
64 – 4 lb. $56.53 $36.49 $20.04
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 8
Middle East
Zone 8
Middle East
Savings with Stamps.com International Flats
1 $12.83 $4.79 $8.04
2 $12.83 $5.68 $7.15
3 $12.83 $6.56 $6.27
4 $12.83 $7.44 $5.39
5 $12.83 $8.33 $4.50
6 $12.83 $9.21 $3.62
7 $12.83 $10.10 $2.73
8 $12.83 $10.98 $1.85
12 $21.61 $12.81 $8.80
16 – 1 lb. $21.61 $14.63 $6.98
20 $21.61 $16.45 $5.16
24 $21.61 $18.27 $3.34
28 $21.61 $20.09 $1.52
32 – 2 lb. $21.61 $21.91 -$0.30
36 $30.64 $23.74 $6.90
40 $30.64 $25.56 $5.08
44 $30.64 $27.38 $3.26
48 – 3 lb. $30.64 $29.20 $1.44
52 $50.35 $31.02 $19.33
56 $50.35 $32.85 $17.50
60 $50.35 $34.67 $15.68
64 – 4 lb. $50.35 $36.49 $13.86
Rates as of January 21, 2018

 

First Class Package
International Service
Stamps.com International Flats
Weight (oz) Zone 9
South America/ Caribbean
Zone 9
South America/ Caribbean
Savings with Stamps.com International Flats
1 $13.30 $4.79 $8.51
2 $13.30 $5.68 $7.62
3 $13.30 $6.56 $6.74
4 $13.30 $7.44 $5.86
5 $13.30 $8.33 $4.97
6 $13.30 $9.21 $4.09
7 $13.30 $10.10 $3.20
8 $13.30 $10.98 $2.32
12 $22.33 $12.81 $9.52
16 – 1 lb. $22.33 $14.63 $7.70
20 $22.33 $16.45 $5.88
24 $22.33 $18.27 $4.06
28 $22.33 $20.09 $2.24
32 – 2 lb. $22.33 $21.91 $0.42
36 $33.01 $23.74 $9.27
40 $33.01 $25.56 $7.45
44 $33.01 $27.38 $5.63
48 – 3 lb. $33.01 $29.20 $3.81
52 $48.93 $31.02 $17.91
56 $48.93 $32.85 $16.08
60 $48.93 $34.67 $14.26
64 – 4 lb. $48.93 $36.49 $12.44
Rates as of January 21, 2018

 

Categories: Ecommerce Shipping Tags:

5 Tips to Make Holiday Returns Easier

December 19th, 2017 Comments off

Returns are an inevitable part of ecommerce, and particularly during the holiday season when shoppers with good intentions buy gifts for their loved ones but might pick out the wrong size, style or color for their intended recipient.

One study released earlier this year by Narvar found that Millennials (under the age of 30) and affluent shoppers place a strong emphasis on the online return experience. The generous returns policies offered by companies such as Zappos (fast and free, with a 365-day window)  make it easy for shoppers of any demographic to view returns as a natural part of the ecommerce buying cycle. They’ve come to expect convenience and transparency during the process, and might take their business elsewhere if they aren’t offered free returns—84 percent of those surveyed by Narvar said restocking fees would prevent them from making a purchase, and 74 percent said return shipping fees would prevent them from making a purchase.

Here are five steps an ecommerce seller can take to make returns easier, both after the holidays and all year long:

  1. Create a returns portal

Consider creating an online returns portal for your customers where they can input information about their return and print out the shipping label and other necessary documents. This allows you to control the return shipping label and the cost associated with returning the item so you can avoid customers expecting you to pay when they opt for higher-cost shipping options. This returns portal also gives you the ability to monitor data and generate reports on your product returns. Having this information readily accessible can help save you money in the future—you might find patterns in these reports that draw your attention to problems on your site, such as inaccurate product specifications or poor photo quality.

  1. Use a return merchandise authorization system

The Return Merchandise Authorization, or RMA, system can be a part of your returns portal. Having an RMA number allows your inbound shipping team to easily pull up the return details of the order, and coding that RMA number or other return information on the label makes for easier processing once a returned product arrives. This way your inbound shipping team knows what the product is and why it’s coming back, and your warehouse team has a view of inventory due back to the warehouse.

  1. Provide good return tracking

Tracking of a returned item is imperative. Transparency and tracking capabilities are critical in the returns process, which is why it’s imperative to provide good return tracking information to your customer. As a retailer, you should keep shoppers informed of return package status—consider sending an email when their return enters the mailstream or when you receive the package, so customers aren’t worried that their packages could be lost. It’s also important to keep them informed regarding their refund status so they know when to expect to see a credit posted to their account. Transparency by way of quality return tracking communication can also help alleviate the amount of inquiries coming into your customer support team.

  1. Allow customers to return online purchases in person

Shoppers want the option to return online purchases to a brick-and-mortar store—sometimes it’s easier to drop in than it is to print out a label, package up a return and ship it. In addition to making the return more convenient for your customer, this gives the store the opportunity to immediately recapture a sale and possibly upsell or cross sell since the buyer is already on site. Plus, an immediate refund helps foster that positive customer experience.

#5 Create (or improve your) returned product review process

Develop a good product review process for your returns so the team knows how best to handle returned items. Can the product be returned back to stock as new/unused? Would it be better to repair or otherwise fix the item so it can go back into stock as reconditioned? Does the product need to be flat-out destroyed?

Other things to think about when developing your returned product review process:

  • Which team initiates a refund or exchange once you’ve received the returned item?
  • How long does it take to process an exchange or refund, and are you clearly communicating this process with the customer?
  • Do you have accounting processes in place to handle the product coming back into inventory, reversing the sales tax collected and tax liability?

Yes, returns take some work, but if done right, they can help you attract customers and build brand loyalty.

Categories: Ecommerce Shipping Tags:

Interview with Jim Cochrane, USPS Chief Customer & Marketing Officer

August 1st, 2017 Comments off

Profiles in E-commerce
A Stamps.com interview series with leaders in the online retail industry.

With over 5.2 billion packages delivered to 156 million addresses in the U.S. last year, the Postal Service is the undisputed market leader in e-commerce delivery. The National Retail Federation expects e-commerce sales to grow by 8% to 12% annually over the next three years. To keep pace with this tremendous growth, the Postal Service seeks to invest heavily in its network and infrastructure while continuing to introduce new products to maintain its leadership in the parcel delivery market.

Stamps.com recently spoke with Jim Cochrane, Chief Customer and Marketing Officer and Executive Vice President at the U.S. Postal Service, to get his insights on the strategies the Postal Service is using to grow package revenue. (Transcript of interview listed below.)

 

Transcript of Jim Cochrane Interview

Stamps.com: Hello everyone.  Thank you for joining us for Profiles in E-commerce, our Stamps.com interview series with leaders in the online retail industry.  My name is Eric Nash.  I will be your host for today, and our topic will be e-commerce parcel delivery, and specifically how the U.S. Postal Service is competing in this dynamic market.

Over the past five years the Postal Service has experienced strong growth in its package business.  And looking at the most recent years, the Postal Service’s growth has outpaced the growth of its competitors, particularly in the key battleground of e-commerce.  For example, in 2016, the Postal Service’s domestic mailing and package revenue was up 16%, while FedEx and UPS were up only 10% and 4% respectively during that same period.

Today we are really excited to talk to Jim Cochrane, the Chief Customer and Marketing Sales Officer of the Postal Service.  Jim will be sharing some insights into what has driven the Postal Service’s success in growing their package business.  In his current role as Chief Customer and Marketing Sales Officer, Jim Cochrane reports to the Postmaster General.  And he oversees all domestic and international product marketing, development, management and product innovation.  He is also responsible for the Postal Service’s sales and customer relations areas.

Jim has worked for the Postal Service for 41 years, and he has had many roles including Vice President of Product Information, Vice President of Product Visibility and Operational Performance, and most recently Chief Information Officer.  Jim, thank you so much for joining us and congratulations on the amazing success of the Postal Service.

Jim Cochrane: It is my pleasure, and thank you.

Stamps.com: Alright.  So let us get right into the questions.  A big driver of your recent success has been in e-commerce, where you have become the market leader delivering more e-commerce packages than any other deliver company.  What has allowed the Postal Service to achieve success in this area?

Jim Cochrane: I think it is the capabilities that we have.  We will travel four million miles today and we will go to 155 million addresses, and we do that six days a week.  And it allows us to have a unique relationship, in particular with consumers, as we are at their door or in their mailbox or on their porch six days a week.  So you leverage that and your asset is an important part of the postal service.  We are a delivery company.  And it is the reason why even traditional competitors like UPS and FedEx give us hundreds of millions of packages to deliver for them.  Because it is a better solution for customers.

And then, of course, we have great partners.  But you have to deliver world-class service.  It has to be reliable.  You have to have excellent tracking and information and visibility.  And once again, I think that combination of our capabilities, the infrastructure that we have, combined with our execution, has let us rise to the top.

Stamps.com: You oversee product innovation at the Postal Service and you have been very active in this area in the last few years.  You have introduced quite a few new and exciting products, along with enhancing existing products in order to help shippers save money and be more efficient.  What have been some of your bigger successes?

Jim Cochrane: I think the Flat Rate Boxes and Envelopes that we launched over a period of time – probably in the last ten years – have really served us well.  It takes the mystery out of shipping.  ‘If it fits it ships’ was the tagline years ago and I think that has been very helpful for us.  Gary Reblin, our Product Innovation Vice President, introduced Cubic Pricing which allowed us to recognize packaging that is done in a very efficient way.  If it is a little heavy yet it is within a certain size, customers are able to ship at a lower cost.  I think a lot of the innovation that we have done is also operational innovation.  We had to improve our capabilities for everything, from our tracking system to parcel sorters that we deployed in our processing centers, to technology in all of our post offices to help us execute in the most efficient way possible and continue to have the lowest prices in the marketplace.

Stamps.com: That is great.  Well, you mentioned it has been over a period of time with the Priority Mail Flat Rate products.  Do you expect the pace of innovation to continue here?  Are there any new products on the horizon that you could share with us?

Jim Cochrane: One of the things we have done is we have realized how society and customers have become more mobile in how they consume information.  We are in the process of launching our Informed Delivery program and app.  And you can go to our portal.  But it allows you to manage the mail and all the packages coming at you on a daily basis.  You launch the Informed Delivery app on your phone.  It is available with iOS and Google.  And what it does, is it gives you all the packages that are going to be delivered to you that day, as well as the mail pieces.  And that is the newest piece, adding visibility to mail pieces so you can begin the buying experience.  So I think that as an organization, we are trying to do everything in our power to improve the customer experience to both mailing and shipping.  So stay tuned.  We are not done there but there are some really exciting things going on, which I think will really improve the buying experience and the delivery experience.

Stamps.com: Yeah, as a current Informed Delivery user, I can tell you that it is a really great product.  And I have been really excited to use it, because now I am able to log in.  I am using it via email.  And I can see what mail is coming to my inbox for the day.  So it is a great opportunity.

Jim Cochrane: You should get the app.  The app gives you both mail and packages in the same place.

Stamps.com: Back in 2006 the Postal Service was, for the first time, allowed to offer custom negotiated rates to different customers via negotiated service agreements, or more commonly referred to as NSAs.  How important has the price flexibility, afforded by these NSAs, been to your success?

Jim Cochrane: We were in a period – I was running the Shipping business for us from a product perspective back in 2001 through 2006.  So previous to the law change, I had to give the same price to a consumer as I did to Amazon or Home Shoppers Network or JC Penney.  That did not make any sense.  It did not allow us to compete with the commercial players.  So, NSAs give us the ability to do negotiated service agreements.  Once again, the regulator scrutinizes them and makes sure that there is no cross-subsidization and that our packages are in fact covering their costs.  So I cannot write any NSAs that are below cost.  But it allows us to compete better for the larger shippers, and really customize a solution that looks at everything from the size of the packaging, the amount of the volume, where the packages are going to.  So all that matters, and once again the key issue is to grow with our customers.  We try to recognize their growth as they ship more with us.  There is a reward for that, I will say.  So it is really helpful for us and it has been a really nice addition to our portfolio.

Stamps.com: With what you just said, where you are both growing with the customer, is the main concept of the NSAs to use these discounts to win new business or foster existing business and helping it grow?

Jim Cochrane: It is all the above, right?  We definitely want to go after new business, and that is where our success has been the last five years.   Cliff Rucker and the sales team have been out there very aggressively trying to understand customers’ issues and provide solutions that are competitive in the marketplace.  So because we do not have things like surcharges, residential surcharges, extended area surcharges and rural surcharges, there is a nice ability to craft a solution that can save a shipper money.  So pretty successful for us using NSAs to attract new clients, and at the same time, using NSAs to keep existing business.  It is very competitive out there.  And once again we have world-class customers that we compete with and partner with, in DHL and UPS and FedEx.  But I think customers win on this; at the end of the day, the ability to provide NSAs to keep the cost of shipping, in particular free shipping, it helps people manage their spend a little bit better if the market place is competitive.  And then we are all competing rigorously for customers’ business.  And that is the reality of the marketplace we compete in.

Stamps.com: Talking about surcharges, that’s a great segue here into our next question.  Looking at your competitors, their product pricing includes significant hidden costs, such as fuel surcharges and residential delivery surcharges.  And UPS recently announced that they’ll be adding a peak season surcharge for deliveries during the holidays.  The Postal Service has always taken a straightforward approach with no hidden costs and no surcharges.  How has this more straightforward approach contributed to your success in the market?

Jim Cochrane: Well, for us, as I established earlier, we go everywhere every day.  And so we are very different in how we do delivery from our competitors.  So I understand why they have residential surcharges; it is a different cost than a business delivery.  And I understand why rural delivery is a little more challenging than urban delivery.  But for us, we are going to go four million miles today and we are going to go by every house today.  So our ability to stop takes away the fact that we need to be maybe less dependent on trying to cover that added cost.  We cover the cost, but as we are going there, filling the truck up becomes the challenge.

So it worked well for us.  It cuts through the clutter.  It is still a mystery; a lot of customers do not realize until they get their bill at the end of the month that their discount is not always what they think it is.  But once again it is becoming very competitive.  It is a common practice, in some cases, for our competitors to discount some of those surcharges.  But once again, customers have to really understand what they are really paying.  And that is one of the things we message, as we are out talking to customers and crafting solutions for them.  And we sell against it and it works to our advantage.

Stamps.com: Five years ago the Postal Service had a reputation for lower tracking accuracy compared to the other carriers.  But we have seen package tracking improve dramatically at the Postal Service to the point that we now view you as the leader in tracking.  I know you were the Chief Information Officer at the Postal Service and that you led the charge for many of these improvements in tracking.  How were you able to engineer such a dramatic change to package tracking, and are there any additional things you are working on in this area?

Jim Cochrane: Once again, we had to make a capital investment.  And it was a customer‑facing system.  It was a fact that we had a lot of the same events; we did not have them as timely as we needed to.  Our devices that we were using would store the delivery events all day until we get back to the Post Office.  So we had to replace our product tracking system and modernize it and put it into a more robust solution.  And then we replaced all the scanners.  Now, for us to replace all the devices – you have an intelligent mail device that we use out on the street, it is all real-time information.  If we do a scan, when we built the tracking system and we deployed the new scanners, our challenge was to post within a minute.  So if I do a scan, I want to see somebody getting a text a minute later.  And that call to action created a real significant re-architecture of both our technology and the devices that we use.  It was an investment in the future, it was an investment in our customer‑facing systems, and really an investment in customer experience.  It allowed for a much stronger customer experience but it also leveled the playing field because we now think we have tracking that is every bit as robust as everyone else.  We are not done; we are moving towards predicting delivery.  Doing a lot of testing right now; the layering, the geofencing that we have done on all the addresses.  And really want to get to a point that we can tell every customer within a two-hour period when their packages are going to be delivered.

That is an enhancement that is being tested right now, and, of course, the ability to track where your package is, map style.  It is kind of the Uber of how people want to consume information.  Everyone is really getting comfortable with geospatial information.  So we are also testing that off.

Stamps.com: Yeah, that would be really great.  Everybody would be so excited, I think, to see their package on its way and literally see where it is going to or how far away it is from your house.  That sounds great.

For online retailers, returns are a significant friction point in e-commerce.  How does the Postal Service compete in this area and can you share with us any future programs you are working on?

Jim Cochrane: Sure.  It is one of those challenges that as e-commerce grows, returns grow also.  And especially as people more and more move to the apparel sectors, they do tend to have a higher return rate than electronics or music and things of that nature.  So as apparel online grows, returns grow.  And so what we bring to the table is really a ubiquitous retail presence.  One of the things we discovered early on in this is customers, even though we provide free pickup on packages at the house, there is just some anxiety on the customer’s part, even though they come home to packages on their porch every day, to go to work and leave a package on the porch.  So your ability to hand that off to someone becomes an important part.  The industry term is “trunk time”; they will put it in their trunk and drive around for a week because it is not convenient to maybe hand it off to one of our competitors.  We have over 31,000 Post Offices, so everyone knows where their Post Office is.  It is conveniently located and more often we are allowing 24/7 access.  And we are looking at the ability for someone to walk in after hours and have access to a device that scans their package and also opens up the drum so they can deposit the package.  So under a certain weight and size you can put it in one of our convenient mailboxes.  If you are comfortable, you can schedule a carrier to pick it up during their normal rounds for free.  And, of course, you have the access to all the Post Offices.  So once again, there is still a technology piece to this to continue to make it easier.  And we are working on other opportunities to expand so people have 24/7 access to return packages.  It is a point of friction and it is not as mature as the rest of the shipping business.  I have seen customers that I think do a great job on the outbound, but returns are a place that people still probably need to put a little focus.  I think it is a cost center in some ways, and you need to make sure you are doing everything, just like you would with an outbound package, to drive the cost out of your inbound and returns.

Stamps.com: I was just at an event last week and the USPS reps demonstrated “Automated Package Drop” at some of the Post Offices.  And it was an e-commerce event.  Everybody really was excited about that and I could see returns really playing right into that.

Jim Cochrane: You have to make it easy, and I think you used the term ‘frictionless.’  And that is the challenge.  We are trying to be frictionless on returns and provide a solution that is world class, just like the outbound solutions we provide.

Stamps.com:  In 2009, the Postal Service began a program that it calls “resellers.”  What does that term mean and how does the Postal Service view the reseller program and its role in growing postal package revenue?

Jim Cochrane: Resellers are a fact of American commerce.  If you think about it – we are in the middle of summer here and it is pretty hot on the East Coast, and I am pretty sure it is everywhere around the country.  So if your air conditioning breaks you are going to call someone who tends to be a local player.  And they are resellers for a big manufacturer, Carrier or somebody.  Whether it is cars or software or appliance, you can go on and on.  It is how business gets done in the United States.  And for us, we had a focus on large customers but we did not have a focus on small and medium-sized business, and we were not resourced against them.  So we thought resellers were an excellent opportunity to bring our brands and our shipping solutions down-market to smaller volume shippers.  When they have 100,000 or a 250,000 square foot warehouse and they are a big player in e-commerce, we know they are there and everybody knows they are there.  But when they are only shipping five, ten packages a day, how do you find those customers?  And that is where resellers have been a very effective addition to the Postal Service portfolio.

Now on the mail side that is common fact.  We have great business partners.  The printers in the United States, the Quad/Graphics, and the Randalls and the Harte Hanks and Donnelleys are all strong players in the print business.  And we work closely with those business partners to provide the best solution to somebody that wants to do a mail campaign or present bills or [inaudible] of the world.  Once again, partnering with companies like that, it brings the best solutions to customers.  And we looked at resellers and things like PC Postage providers, like Stamps.com and Pitney and Endicia, as excellent partners on bringing the best solution to customers.

Stamps.com: Looking backward a little bit, to what extent has the reseller program contributed to past growth and helped the Postal Service become the leader in e-commerce packages?

Jim Cochrane: Once again, it is niche, right?  It goes after mostly small/medium-sized business.  It gave us solutions there and that is a growth engine in the economy.  And if you think about the early days of resellers, it was mostly marketplace activity, eBay and Amazon in the marketplaces.  And providing the solution there was really important for us.  So it certainly contributed to the success that we are experiencing.  And once again, we have grown this.  I think last year we did about $7 billion in the channel which is coming out of PC Postage and resellers.  So together, those solutions have really crafted a nice segment solution for us for the small, medium-sized business.

Stamps.com: With that do you see the reseller program continuing to be a growth strategy for the future?

Jim Cochrane: Well, if it is growing to the tune that ours is, and it gives us solutions down market where we do not have the sales team to interact, yes, I do not see a reason why it would not continue to serve both customers and the needs of the Postal Service, going forward.

Stamps.com: You’ve mentioned a few times that the parcel delivery market is so competitive.  And we see that all across the board in how the carriers are marketing their services.  With the reseller program, is that helping you keep existing business, now that everybody is going after each market?  UPS, FedEx, all the competition is going after small businesses now as well.  So is the reseller program helping you keep existing business, or is it focused more on going after new business?

Jim Cochrane: I think it is both.  If you have people who are shipping through that channel, it works for us.  If they are not shipping with us, going after some of that business also works for us.  So it is both.  Once again we have to continue to serve customers and find new customers and enhance the value that we bring to customers.  It is all part of that same equation.

Stamps.com: Stamps.com and its subsidiary Endicia have had an 18-year business partnership with the Postal Service.  How important are partners like Stamps.com and Endicia and other PC Postage vendors to the Postal Service?   And how have these partnerships helped grow package revenue?

Jim Cochrane: I think the best solution is – way back when, when getting a shipping system was an important issue, if you remember those days.  And they still go on.  Our competitors were out there providing built-in shipping systems as part of the contractual relationship.  And we did not have that and we did not want to go down that path.  So the integration into a WMS system, the integration into somebody’s business, into their warehouse management system, is a challenge.  And it is a constantly evolving challenge.  So using partners like Endicia and Stamps.com.  Now we have EasyPost, [inaudible], NeoPost.  All these world-class brands are working to provide solutions from a software platform, and more importantly the data integration, the software integration that has to be done.  For that to do that for us was an important part of our strategy and it has worked well for us over the years.

Stamps.com: And as a final question, can you share any strategies that you and the executive team at the Postal Service have for future growth?

Jim Cochrane: I think I said earlier, it is highly competitive marketplace.  We deliver for business partners like Amazon, and UPS and FedEx, and once again every day we compete for that business.  So if I had to focus our strategy, it is just a laser focus on keeping our costs down so we can stay competitive on price; laser focus on execution that we are delivering the best service in the marketplace.  And finally, just doing everything in our power to improve the end-customer experience.  And with that interaction, we have our ads that we run right now, ‘your business is our business.’  We take that very seriously.  We represent a shipper’s brands on the porch, in the mailbox, at the front door.  And we do that in a very professional way.  So the focus is on continuing to improve the customer experience, whether it is mobile solutions and apps.  Or just continue to let the customer customize how they want things delivered, I think is where we are going to continue to see evolutions on this.  So again, food takes a different type of delivery than a package that has a sweater in it.  So once again, I think you will see more customization from the Postal Service because we have to keep up with the changing needs of customers.

Stamps.com: Jim, thank you for joining us today and we wish you and the Postal Service continued success with the amazing growth you have generated.

Jim Cochrane: I appreciate that.  Thanks for the opportunity to spend some time with you.  It is an interesting market space.  If you are in e-commerce, it is an interesting space and it continues to evolve.  We have to make sure we are evolving with it.

See Jim Cochrane’s bio.

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