Case Study:
Fast-Food Restaurant

Leveraging ShipRx's analytic and negotiation skills, a national fast food restaurant chain was able to successfully implement a merchandising rollout while simultaneously lowering their overall shipping costs.

Client Profile

A popular fast-food chain headquartered in Georgia employing more than 140,000 team members at 3,000+ locations covering nearly the entire US.

The client's distribution was historically “distribution center to franchisees” (B2B), but this was about to change with the e-commerce rollout of themed merchandising.

Business Category

Fast-Food Restaurant

Business Location

Georgia

The Problem

Discounts not aligned with expected change in shipping patterns

Although its existing UPS discounts were mostly decent, they could certainly be improved; however, with the inclusion of the new e-commerce volume, the carrier agreement's lack of focus on residential shipments put the profitability of the merchandise rollout at risk. The company knew that the discounts could be better, but by how much? Even then, how much would they need to charge for shipping in order to break even on the merchandising volume?

Our Solution

Contract Negotiation & Cost Analysis

The client hired ShipRx to help them renegotiate their agreement with UPS which not only improved the discounts on their existing B2B volume, but added emphasis was placed on the soon to be released merchandising products which would be virtually 100% residential. In addition, ShipRx was able to calculate estimated average costs for each SKU using a projected distribution based on the nationwide location density of their stores. The restaurant chain was able to use this information to determine a flat-rate shipping charge for their shopping cart.

Negotiated discounts to address current needs and planned e-comm roll-out
Calculated flat-rate shipping cost based on estimated SKU distribution

Client Results

Estimated merchandising sales volumes were provided and factored into a comprehensive negotiation which addressed both near term and projected discounting needs

With ShipRx's expertise and guidance, the client went to UPS with specific demands for discounts on the volume being shipped from their main distribution center in Georgia to each of their restaurants, they were also able to convey their expectations for the future rollout and obtain discounts which would ensure the success of their merchandising endeavor. Average savings on their shipping approached 15%, totaling $450,000 in the first 12 months.

Highly accurate average cost estimations allowed the company to include a flat-rate shipping charge in their shopping cart platform which provided up-front profitability projections for the merchandising rollout.

Client provided weight, packaging dimensions, and sales estimates by SKU to ShipRx, who in turn created an estimated distribution based on the client's store location density. Combined with the newly negotiated discounts, ShipRx was able to project the average shipping costs for each SKU and then an overall average shipping cost. Despite only having a rough estimate of the e-commerce recipient distribution, the cost estimate was within 2% of the actual cost per package.

$923,592

Total Savings

12%

Cost Reduction

While each opportunity will have varying degrees of success depending on the conditions, ShipRx has a 100% success rate in securing savings on behalf of its clients.

As a result of ShipRx's expertise, shipping costs were reduced by nearly 25%. This case study is a representation and reflection of ShipRx's technology, industry experience, and market expertise. These are not uncommon results for companies turning to ShipRx for assistance.

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30+ Years of Experience
Thousands of Successful Clients

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Case Study: Fast-Food Restaurant