Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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But he also takes other steps to ensure the best rates from UPS as well as from other carriers. For example, Reichman is retaining a shipping auditing firm, LJM Consultants, that reviews its shipping contracts and invoices to scour for any mistakes in billing. LJM gets a percentage of any overbilling it uncovers, but doesn’t charge any other fees.
“My Internet business has hundreds of pages of billing, and I can’t audit it myself,” Reichman says. Maintaining accurate records provides for a better negotiating environment when renewing contracts, he adds.
BedBathstore also uses the Platinum Shipper comparison shipping tool from Endicia to choose the best rates among carriers for its shipments of packages weighing from one to four pounds. For packages of under a pound, it uses the Mail Innovations service from UPS, which coordinates with the U.S. Postal Service for local deliveries.
BedBathstore is also using a new radio frequency inventory scanning system from Advanced Barcode Systems, which enables warehouse workers to more quickly pick products for shipping to customers.
Taking such steps to get the best carrier rates as well as operate efficiently, Reichman says, enables BedBathstore to afford free shipping as part of its regular promotional strategy. “For us to be competitive, we need something that will set us apart,” he says. “And a big part of that can be free shipping.”