As a FedEx contractor, the success of your ISP enterprise is hugely dependent on your ability to negotiate a favorable contract. A satisfactory operating agreement will significantly contribute to the success of your business and helps you plug any loopholes that may exist in your ISP operation down the line. Plus, it will help build a lasting relationship between you and FedEx Ground and delivers a profitable ISP contract.
Hence, if you are thinking about how to negotiate your FedEx ISP contract or improve your operation, here’s an excellent resource that will help you to strike a soothing and satisfying negotiation successfully.
Below are the three tips that will make a big difference while negotiating for your FedEx ISP:
Summary
Understand the Charges Being Negotiated.
An excellent way to start your FedEx ISP negotiation is to, first and foremost, figure out all the charges involved in the ISP operation. In other words, the charges from you, the contractor, to FedEx Ground determine your business cash flow. As a FedEx contractor, you’re charging the company for your services.
An important variable that determines the rate of your every charge is your service area’s volume and expense projections. It’s essential you have a full grasp of when and how those changes occur in order to optimize your cash flow. Below are some of the charges associated with FedEx ISP:
- Service Charge: This is a fixed weekly payment that you receive from FedEx Ground. It’s like base pay.
- Stop Charge: This variable charge is the base amount paid per stop that each driver makes.
- Per Stop Fuel Surcharge: This is a variable charge FedEx Ground pays per stop to help subsidize the cost of fuel, and it’s subject to adjustment based on the current price of fuel
- Package Charge: This is the fee that is paid per package. In other words, you negotiate what the charge will be.
- Large Package Mix Charge: If your operation delivers packages categorized as large packages, a surcharge applies. An item is determined to be a large or incompatible package based on the weight and dimensions.
- Surge Stop Charge: FedEx Ground gives every contractor a daily stop threshold or a maximum number of stops. However, exceeding your daily stop limit will earn you extra cash besides your regular stop charge. You should also include a surge stop charge in your FedEx ISP Negotiation.
- Apparel Brand Promo Charge: To promote their brand, FedEx Ground pays their ISP contractors a flat rate daily to encourage their team to wear appropriate apparel.
- Vehicle Brand Charge: FedEx Ground also pay a flat rate amount to ISP contractors per pay cycle for every vehicle they use that has the company’s logo.
A good understanding of the above charges will help strengthen your bargaining power.
Use Concrete Numbers Instead of Range
When embarking on your FedEx ISP Negotiation, use exact numbers instead of ranges. Using concrete numbers offers some benefits, including not instantly telling the other party the lowest amount you will be willing to get from the negotiation. For example, you don’t tell the opposite negotiator you expect to earn between $ 600 to 850 as it will make them quickly decide how low they can go with their offer. And there’re chances you might likely get the lesser amount. In addition, concrete numbers show the other party that you researched pricing.
Be Prepared and Do Your Homework Before Engaging in FedEx ISP Negotiation
Doing your homework before engaging in the negotiation will give you enough confidence. First, you should find all the vital information about the independent Service Provider (ISP) contract. This includes how much is being paid for routes, the latest safety standards, the skills needed to operate, and more. Additionally, you should ensure that your vehicles meet FedEx Ground’s minimum requirements.
Do You Need Assistance Finding Financing to Purchase Your FedEx ISP?
The transition from an IC to an ISP model has dramatically changed how FedEx Ground operates, especially concerning financing and scaling. For instance, in the new operating model, FedEx contractors need to operate both Ground and Home Delivery routes within their specified service area, plus they need to run a minimum of five routes and/or 500 daily deliveries.
This new development means that contractors need to scale in order to meet this requirement, and there’s no denying that scaling demands more financing. In other words, you need more money to buy more vehicles, hire drivers, and deal with issues associated with running the business. Not having financial flexibility might spell doom to your company, and you already know the rigor and heavy financial burden involved with a bank loan if you finally get it.
In light of the preceding, Financial Solutions now provides FedEx’s ISP line of credit with an easy application process. Financing Solutions FedEx’s line of credit is an excellent funding option for your business and guarantees constant cash flow. As a great cash backup, the FedEx ISP line of credit requires no collateral or documentation for a written letter. However, you must already own your FedEx routes to be approved. Our FedEx ISP line of credit is easy to set up, costs nothing to set up, nothing until used, and when used, it’s pretty inexpensive.
If you want to see if your route business would be approved and for how much, please fill out the no-obligation, 2-minute FedEx ISP line of credit application here.