HealthBuy Case Study: Saving $1.22 on Every Shipment
The business
HealthBuy.com is an established health and wellness ecommerce business serving consumers across multiple product categories and markets. It needed logistics that could scale with growing order volume while keeping delivery fast and shipping costs under control.
The challenge
- Parcel costs rising as volume grew
- Carriers with different strengths by region, and expensive shipping zones
- Limited carrier diversification
- International shipping complexity
- Replacement costs from missing deliveries, with little or no protection revenue
- Lost margin when shipping charges didn't match actual costs
The RapidXO solution
HealthBuy made RapidXO its logistics optimization layer. For every order, RapidXO compares carriers and service levels and picks the most economical option that still meets the delivery window.
- Multi-carrier rate shopping and service-level optimization
- Zone-based routing and regional carrier use
- International carrier selection
- Package tracking and shipping cost analytics
- Shipment protection at checkout through Rapid Protect
- Customer-facing shipping price optimization
Results
1. Lower transportation costs
| Previous average shipping cost | $7.40 per order |
|---|---|
| Average shipping cost with RapidXO | $6.18 per order |
| Savings per shipment | $1.22 |
| Annual transportation savings (250,000 orders) | $305,000 |
2. Shipping margin
Average customer shipping revenue was $6.95 against a $6.18 transportation cost: $0.77 retained per order, or $192,500 a year.
3. Protection revenue
| Customers who added protection | 41% |
|---|---|
| Average protection charge | $1.89 |
| Gross protection revenue | $193,725 a year |
| Net protection revenue after claims and program costs | $125,000 a year |
Total estimated annual impact
| RapidXO impact | Annual value |
|---|---|
| Carrier cost savings | $305,000 |
| Shipping margin | $192,500 |
| Net protection revenue | $125,000 |
| Total | $622,500 |
More than cheaper shipping
For HealthBuy, the opportunity went well beyond negotiated carrier rates. Optimizing every order individually lowered logistics costs and created two new margin lines: shipping contribution and shipment protection revenue. At 250,000 orders a year, saving $1.22 per shipment changes the economics of the whole business.
Read the Revitol.com case study, or estimate your own numbers with the protection revenue calculator.
Find your own shipping savings
RapidXO combines multi-carrier shipping, discounted rates, tracking, and insured shipping protection in one program.
Request a free shipping auditResults provided by HealthBuy.com and published with permission. Figures are annual estimates based on 250,000 orders.
