The Business Chat – beware the Slot of Doom

Yay!
Someone clicked the Add to Cart button on your website/online store and
purchased your fabulous earrings!!! Congrats!!! Now, before you run off to
celebrate you still have work to do. You have to get those earrings to their
new owner. You have to ship your product.
Of
course it won’t be that much work because before you listed those earrings you
thoroughly researched how to ship, what packaging to ship in and how much to
charge for shipping. Of course you posted all of this online or in your booth
(where you took an order for the earrings). And of course you have made sure
that you have plenty of packaging in stock. The customer is well aware of how
much the shipping is and how long it will take. All that you have to do is put
the earrings in the package and mail them out.

The actual cost of shipping

How
much does it actually cost to ship a pair of earrings? Or a heavy necklace? Or (fingers
crossed) 5 items? To calculate this, put together several sample packages and
visit the post office. Use a variety of addresses, I used BC, Nova Scotia,
Florida, California, England and Australia. Go on, dream big and imagine your
jewelry shipping all over the world. Put together a sample package of a small
item such as a pair of earrings, another package of a heavy necklace and a
package of several pieces. You don’t have to use the post office; there are
also courier companies such as UPS, Fedex or DHL. While you’re researching
investigate all options.
While
most companies (including Canada Post) have their rates listed on their
websites, I found it easier to go to the office and have them weigh it and tell
me the options. Sometimes they have information or suggestions that aren’t
easily found online.

Packaging for shipping

For
the most cost effective shipping you may need to reconsider your packaging. In
Canada, using Canada Post, there are height and weight restrictions. They have
the dreaded “Slot of Doom” – which is the 2cm rule. If the envelope is higher
than 2 cm it will not fit through their slot of doom, the height of most mail
slots and it is considered a parcel (much more expensive). So a package
containing earrings in a box is called a parcel, the same earrings in a gift
bag can be mailed as a letter. As cute as my boxes are, the extra $8 in shipping
costs isn’t worth it for me, and all my items are mailed out in gift bags.
Whatever you use to ship in, make sure it will protect the items.
Insurance
Insurance is to protect you, the seller. Shipping is an aspect of customer
service, and in the event there is a shipping problem, you may face an unhappy
customer. Consider purchasing insurance on big-ticket items, or adding a small
amount to each item cost so that in the rare cases where packages get lost, you
have a fund that can cover you.
You can find out the cost of insuring your package from your postal
service. Some expedited services have certain insurance packages built in, so
look into that before buying additional insurance. Keep in mind that insuring a
package will cost, so if you are offering this as a free incentive you must
remember to build the cost into the price of the jewelry.
International shipping
If you are shipping to another country, you’ll need to include the proper
customs documentation. Do not mark it a “gift” if you’re mailing an
item you’ve sold to a customer. Check with your country’s postal service to
find out exactly what forms you’ll need to attach to your package. Theoretically,
filling out these forms thoroughly should prevent your package from getting
held up in Customs.
Shipping internationally will go smoothly most of the time. Every so often
a package can get stuck in customs. Make sure your customers are aware that you
can’t be responsible for these delays. It’s nearly impossible to track a
package once it leaves your country. The buyer is responsible for any
additional fees that may be charged at customs, make sure you add this to your
Shop Policies page.
An excellent source of information when
shipping in Canada is Canada Post’s ABC’s of mailing:
Link is http://www.canadapost.ca/tools/pg/manual/PGabcmail-e.asp#1387539
– Canada Post ABC’s of mailing.
When in Canada for U.S. and International
Xpresspost and Expedited parcel services, fill out the ‘Customs Declaration’
section of the shipping label. For U.S. Small Packet/Light Packet, CN22 Customs
Label (white for SP, green for LP). In the USA you’ll need a green CN 22
customs form which you can pick up at the post office or order for free from
usps.com.
Expedited Shipping.
While you are doing your research it is a
good idea to find out how much express shipping costs to a variety of
locations. Someone, somewhere, is sitting around waiting until the night before
a special occasion to do their shopping. And when that person contacts you in a
panic that they just have to have those earrings tomorrow in Anchorage Alaska
you need to know how extra this will cost them.
To charge or not to charge – free shipping
And the most important question, what should
you charge for shipping? Or should you charge at all? Many new sellers
automatically offer free shipping thinking that will be a great incentive to
new customers. Usually it just makes you look desperate for sales. Free is
always good, however free isn’t always good for your bottom line. If you sell a
$15 pair of earrings that you ship in a box and your shipping cost is $8,
offering free shipping means that you will lose money.
Let’s use Judy as an example. Judy is just
starting to sell online. She has made a pair of earrings and wants to list
them. The earrings cost $4 to make (including the box she packages them in),
her labour cost is $4. Judy doesn’t intend to sell wholesale or on consignment,
so her retail price on the earrings is a minimum of $24. Note that this price
doesn’t include shipping costs. If Judy want to include free shipping she must
add the actual shipping cost to her cost of materials. When Judy visits the
post office to research shipping, she finds that to ship her earrings in a box
and bubble wrap envelope the cost is $8. The same earrings in a gift bag ship
for $1.34 (plus the bubble wrap envelope). If she wants to ship for free, her
earrings (in a box) must be listed $48. To ship for free in a gift bag, the
earrings will be listed $30. The best option for her is to repackage in a gift
bag, list the earrings at $24 and charge $2 for shipping.
A huge mistake most new sellers make is to
downplay what people are willing to pay and give away the farm. Not charging
for shipping means that you are willing to lose part of your profit. Oh and
also not charging for shipping packaging. I know that mailing envelopes are cheap
but they aren’t free. It’s called Shipping and Handling, when you buy online
from large companies not only are you paying for the envelope, you are paying
the labour costs of putting your item into the envelope, filling out the
address label and licking the stamp.
While Free Shipping may seem like a great
option it is generally not cost effective on lower priced items. And it is
never cost effective if you haven’t built the cost of shipping (and shipping
packaging) into your price. Don’t pay too much attention to what other people
are doing, just because someone else is willing to lose money doesn’t mean you
have to follow. Do your research, crunch your numbers and come up with your
company shipping policy. Once you know what this is, tell your customer. Inform
them on the front page of your web site how much shipping costs. Tell them how
long shipping takes. Tell them again in each item description and on the
shipping policies page.
Some extra shipping tips:
On
a suggestion from my local post office, I never ship a package with my company
name on it. I use my personal name. Why? Because my company name is Sailorgirl
Jewelry and a package from a jewelry company is more likely to be stolen than a
package from a person. This works.
For
the same reason I never print out my mailing labels, I always handwrite them.
Tempting
as it is to use pretty envelopes and decorate them, keep the outside of your
packages as plain as possible. You can gift wrap the inside. Again, plain and
simple gets to the destination. Decorated jewelry gets stolen.
One last tip, courier companies will not insure jewelry when shipping
internationally. They will however insure “fashion accessories”.

One Comment

  1. Your title stopped me dead when I was skimming through older posts, trying to catch up on my reading. I have a rural post office as part of my store on PEI and that's exactly what I call the template we have with the 2 cm wide slot. Postal rates in Canada are certainly not cheap and I've sent many people home to repack the T-Shirt they're mailing so it'll fit through the slot of doom. The U.S. just had a monstrous rate increase but they still are lucky enough to have the one-price boxes. Too funny, to hear someone else call it "slot of doom."

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