Rising overhead is a constant pressure
on retailers. Rent, utilities and insurance all continue to climb while
competitive pressures prevent merchants from raising their own prices.
Something’s got to give, say many retailers, and something is about
to. Beginning in July, Michigan Retailers Association will offer a
new program to reduce members’ shipping costs.
MRA has arranged to work with PartnerShip, a service company
based in Oberlin, Ohio, to offer discounts on inbound and outbound shipping
to its members. Most members will see the bulk of their savings on inbound
shipping expenses.
“Teaming up with PartnerShip is one of the best
new added-value member benefits we have added in years,” said MRA
President and Chief Operating Officer James Hallan. “The deal is
clearly advantageous to many members. We can’t wait to get started
helping members save money on their shipping.”
PartnerShip describes itself as a “freight broker,”
seeking the best deals on shipping and offering those deals to members
of trade associations that partner with them. MRA is the only non-national
trade association offering the PartnerShip service.
How big a discount?
All retailers will see discounts in shipping rates, regardless of type
of merchandise. The more a retailer currently spends on inbound and outbound
shipping, the more he or she stands to save, with discounts ranging from
5 to 55 percent per shipment.
 The
program has three components: small package service, which is typically
served by FedEx Ground; freight, which is typically a “less than
truckload” or LTL shipment (more than 250 lbs.); and expedited or
express service—inbound or outbound shipments that require overnight
or air shipping.
Most retailers will use PartnerShip for FedEx Ground deliveries
for incoming merchandise. Some, such as those who do many online transactions,
will also use PartnerShip’s FedEx Ground or FedEx Home Delivery
service for shipping merchandise to customers. Still others will use “less
than truckload” freight deliveries, where the savings are the greatest.
“Members will save at least 55 percent on their
LTL freight shipments,” said Brian Ferancy, director of sales and
customer service at PartnerShip.
Shipments by FedEx Ground receive a discount of 15 percent
for shipments up to 30 pounds and 25 percent on larger shipments. The
program is straightforward and, for many retailers, the savings are sizable.
Ferancy suggests that some retailers who ship outbound
packages may want to consider using FedEx Home Delivery, a relatively
new residential-only delivery service that suits customers’ schedules
without costing more than FedEx Ground. That makes it more attractive
to retailers who currently use more costly shipping methods on outbound
shipping.
FedEx Home Delivery makes deliveries Tuesday through Saturday
until 8:00 p.m. with no extra charge. Members will save up to 10 percent
on FedEx Home Delivery through PartnerShip, according to Ferancy.
Discounts have become more important in light of rate
increases on all forms of shipping. Both FedEx and UPS raised their shipping
rates an average of 2.9 percent (2.6 percent for FedEx Express) at the
beginning of 2005. And freight shipping rates rose this year as well,
with carriers citing rising gasoline prices as a major factor.
How can PartnerShip offer discounts?
“We use the buying power of the association, just as each trade
association does itself,” explained Ferancy. “The power of
the large numbers of members in these associations allows us to negotiate
better rates with FedEx and other freight services.
“The larger manufacturers and suppliers are already
negotiating similar discounts from shippers, because they do high volumes.
They simply aren’t passing them on to you, the receiver.
“PartnerShip’s program is here to pass on
that discount to you rather than to the supplier or manufacturer.”
Satisfied customer
Bruce Johnson, co-owner of Kalamazoo-based Gazelle Sports and member of
the MRA Board of Directors, is already a satisfied participant in PartnerShip’s
program as a result of his business’s membership in the National
Shoe Retailers Association. Johnson estimates that in the last three years
his three stores—in Kalamazoo, Grand Rapids and Holland—have
saved $7,000 to $10,000 on inbound shipping.
“It is basically like saving $.75 on every package,
which can add up quickly,” said Johnson. “Since the money
tree died long ago, every nickel of savings is valuable to today’s
retailers.”
Ferancy is familiar with Johnson’s experience with
PartnerShip.
“Bruce is an example of a member who really tries
to maximize savings everywhere,” said Ferancy. “He’s
a stickler with suppliers—he’s all over them. But if he has
any problems, he can ask PartnerShip to handle them.”
He added: “There are some retailers for whom staying
on top of shipping and watching bills like a hawk is not their strong
suit, and that’s why the PartnerShip program is so helpful. If you
have any problems, questions or issues, that’s what our customer
service people are there for.”
Getting started
Ferancy described the process that takes place when a member decides to
give PartnerShip a try. He emphasized that clients find it easy and fast.
“All a member has to do is complete a one-page enrollment
form to set up an account. It takes us about three to five business days
to set it up. Members will then receive a welcome call from us, showing
them how to use the program.”
MRA’s website, www.retailers.com, will link to all
necessary information.
After a store has an account, the owner or person responsible
for receiving shipments simply informs suppliers how merchandise should
be shipped. PartnerShip supplies a generic letter that should be sent
to each vendor with specific instructions on how to ship and to bill the
store for all future shipments. PartnerShip will also provide a customized
letter to a vendor if a client wishes.
From that point, PartnerShip notifies FedEx of the new
member, and shipments to or from the member store are automatically given
the MRA discount. FedEx provides weekly invoicing that shows savings and
also provides 24/7 customer service. For problems or disputes, members
can contact PartnerShip’s customer service department directly.
For freight shipments, retailers schedule shipments through
PartnerShip and receive billing from them as well.
PartnerShip will also provide reports on a monthly or
quarterly basis, and will send an annual statement detailing the member’s
savings.
PartnerShip’s website (www.partnership.com) provides
downloadable forms, including the letter to vendors, carrier-specific
bills of lading and overcharge claim forms. Live customer service is available
during regular business hours Monday through Friday. If a member must
leave a message, calls are returned within an hour during business hours
or first thing the next morning.
PartnerShip’s ‘back story’
PartnerShip specializes in delivering discounted shipping services to
small- and medium-sized businesses primarily through trade associations.
It currently works with over 15,000 businesses nationwide each month through
arrangements with over 20 national trade associations, saving its clients
money on both small parcels and heavy freight shipments.
The National Shoe Retailers Association, the American
Booksellers Association and the National Sporting Goods Association are
just a few of the associations PartnerShip currently offers discounted
shipping solutions to.
According to its website, PartnerShip “takes the
stress out of shipping.” It employs transportation, customer service
and marketing professionals, and works with industry leaders such as FedEx,
Yellow Transportation, Overnite Transportation and others to deliver “a
program that combines simplicity, cost savings and value to trade associations
and their members.”
PartnerShip knows trade associations well, since it arose
out of one itself. Back in the late 1980s, the National Association of
College Stores saw a need for a program to save its members shipping expenses.
The resulting program became a valuable member service, and the concept
worked so well that the business model was spun off into a new company,
PartnerShip. The company remains a wholly owned subsidiary of the National
Association of College Stores.
National Shoe Retailers Association was one of the company’s
early partners—it came on board in 1997. MRA has long had close,
informal ties with the National Shoe Retailers Association, and the idea
of a deal between MRA and PartnerShip arose informally and seemed to make
sense.
That led to a meeting between MRA’s Hallan, Director
of Sales and Marketing John Mayleben, PartnerShip’s CEO John Finucane
and Ferancy to discuss an arrangement.
“We were impressed by MRA—the way it conducts
its business, its size and the services it offers,” said Ferancy.
“Our arrangement with FedEx has always been to work
only with national organizations, so it is through MRA’s informal
ties with the NSRA that we reached an agreement that satisfied all parties.
MRA is the only non-national association we are dealing with at this time,”
said Ferancy.
He added: “We look forward to a successful relationship
with MRA and its members. In an economy where small and mid-sized retailers
are feeling the squeeze in many directions, it’s wonderful to offer
some good news on how help them remain profitable.”
Savings summary:
The following shipping discounts are available to MRA members through
the PartnerShip program:
Freight (shipments of more than 250 lbs. but “less than truckload”)
Discounts of at least 55 percent
FedEx Ground
15 percent on shipments that weigh 30 lbs. or less
25 percent on shipments that weigh 31 lbs. or more
FedEx Express
Up to 24 percent
FedEx Home Delivery
Up to 10 percent
This article was written by Amy Buttery, Michigan
Retailer staff writer.
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