A little info for sellers

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Smitty37

Passed Away Mar 29, 2018
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Joined
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Location
Milford, Delaware 19963
I wonder how many sellers here think they are charging enough for shipping but really aren't??
Here is what I have calculated my cost to be to ship via USPS priority mail flat rate envelope.
Bubble mailer $.35 (I pack everything in a bubble mailer}
Flat Rate Envelope $.00 (Free from USPS)
Postage $4.85
Insurance $.80
Postage Label $.07
Postage Program (Endicia) $.16
PayPal on the postage and insurance $.17
Use of my Label Printer $.05 ($200 cost amortized over 4000 mailings)
Packing tape $.02 (always used)
ToTal .... $6.47

On average my first class shipments are $2.32 less.

I think the one place where we business guys hurt the most is in shipping, because some of the costs seem invisible.

What do you guys think?
 
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I feel that i do lose quite a bit of money with shipping but in relativity to what i get for the product, it isn't all that much to worry about. I also think that shipping charges are a huge turn off in a transaction because you aren't really getting anything for that 6.47 other than that product getting to you... In the huge picture, those invisable costs are quite invisable and that extra buck fifty over the original charge to ship a flat rate envelope is usually out of the pocket of the seller. Thanks for bringing this up!!!
 
I find that shipping takes a lot of time, in the time it takes to print out the postage, wrap the tool package the inserts verify that every thing is there, securely tape the flat rate envelope or small box, in all seriousness could have the mill work done on a tool, but I only charge 5.00 on most orders, unless they are insured. I have to ship from my house, so no mail; pickup, My shop is not set up for doing shipping (no room) 1000 sq ft and NO ROOM.
But I figure that I am making enough on the tool to off set the costs involved with shipping. If and when either my son or my sil animefan takes over then I imagine or I hope they have enough smarts to factor the invisible costs into the shipping cost, and not into the tool.
People like Exoticblanks, and Woodnwhimsies are incredible, they don't begin to cover the hidden costs of shipping, they are only making profit on the item, not the shipping, and picking.
 
hidden cost

Jmhoff10500 said:
I feel that i do lose quite a bit of money with shipping but in relativity to what i get for the product, it isn't all that much to worry about. I also think that shipping charges are a huge turn off in a transaction because you aren't really getting anything for that 6.47 other than that product getting to you... In the huge picture, those invisable costs are quite invisable and that extra buck fifty over the original charge to ship a flat rate envelope is usually out of the pocket of the seller. Thanks for bringing this up!!!
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Sure you can hide those costs if you can bury them in the price of the item...or you can go with a fixed price on shipping and try to bury the rest of the cost in the price. I try to hide a lot of them by including the cost of shipping in the price, which works well if the cost of the item is high enough that an extra $5 or $6 is acceptable.
 
Well you know how a lot of people will spend a dollar driving around town looking for gas that is a penny cheaper.

It's just the cost of doing business. Packing and all that isn't really that much. Heck boxes are free the P.O. comes to me I use news paper I do use bubble wrap but it goes a long way.

So to me postage is just the cost of doing business. I think a higher shipping cost would chase a lot of people off. It's a balancing act.

You mention insurance that is the big $$ and optional. If you are doing insurance than yes you have to get that cost but that should be the choice of the customer or your policy and spell it out that would justify a higher shipping cost.

my thoughts
 
As a buyer and not a seller, if the item I'm buying is $5 or $10 and the shipping is $6 or $7 dollars I won't buy it. I know it's just a matter of perception but when shipping is the same or more than the item I'm buying it just feels wrong.
 
Not much of a business man if you do not know shippiong costs in my opinion. Write it off on your income tax or hand deliver it. What else do you want to do???:biggrin: How do you get an item from point A to point B. That is such a understaement because everything we do has hidden cost. Think about when you go to the store and buy something, you paid for the gas to get there. You paid for the wear and tear on the car. You paid for the wear and tear on your shoes. You paid for the wear and tear on your nerves as you stand in line with a bunch of idiots at the register. Shall I go on. One of those obvious observations I think when dealing with selling anything. or buying anything.
 
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I probably charge too much for shipping, but I also don't say the cost of the product plus shipping... Just place the ad and say that shipping to the lower 48 is included.

If I'm wanting $62.00 for a pen, my ad will actually just reflect $72.50 including PriortyMail shipping to the lower 48. I also think this method doesn't look like I'm trying to nickel-n-dime the buyer out of his/her life savings.



Scott (shipping is a hassle no matter what) B
 
The basic fact is that John Q. Public does not understand the cost of doing business. As John has pointed out there is a lot more to it than just the materials. Think about a larger scale business with employees. People will scream bloody murder on a $7.00 shipping & handling fee when they order a $2.00 item. You hear all the time that it doesn't cost you that much to send a $2.00 item. Here is my standard response to belligerent customers.

That is correct it costs much much more. We pay someone to print your order off of the web site, another to produce an invoice and packing slip, a third person to pull the order, a fourth to pack the order and finally someone has to produce the shipping label. Thank you for pointing this out to us as it has shown us how cheap we really are. Please note that shipping & handling fees will increase appropriately effective next week. We also will be instituting a minimum order of $25.00 as it is quite silly to pay $7.00 to receive a $2.00 item, unless of course it would cost you more than $7.00 to try and drive around to locate such an obscure item.
 
As a standard, I add a "shop fee" of $10 into my pricing structure. This fee includes CA glue, paper towels, plastic polishes, sandpaper, shipping supplies, toner cartridges, paper for the printer, and all other "incidentals" that are usually forgotten.

That way when I ship a product for $4.85 my shipping costs really are covered. The flat rate boxes are free and the Post Office comes to me. Since I only ship about 60 percenet of my product, by adding the $10 per per, I have money available to pay show entry fees, etc.

This works very well for me. If I charge $10 for shipping and the customer knows that the actual postage is $4.85, many (as do I) feel "ripped off". To me this is a no brainer.
 
i'm different as i feel reasonable shipping is a bargain. my closest source for most pen related items are woodcraft (44 miles) and berea (55 miles). my car gets an average of 25 mpg. woodcraft takes about 1 hr 10 min. each way and berea about 1 hr 30 mins. right now if i go to woodcraft to look and buy nothing i have tied up a minimum of three hours and gas cost of almost $12.00. that's a given as we all know there are other costs associated with the car as well. i dislike pennstates minimum $7.50 shipping charge and will usually order enough to make that worthwhile rather than just the bushings that i may have needed at the time (whenever possible i use the pennstate resellers). when i can order online and not drive to either of those places i consider "shipping" charges a real value/savings to me.
 
MLKWoodWorking said:
That is correct it costs much much more. We pay someone to print your order off of the web site, another to produce an invoice and packing slip, a third person to pull the order, a fourth to pack the order and finally someone has to produce the shipping label. Thank you for pointing this out to us as it has shown us how cheap we really are. Please note that shipping & handling fees will increase appropriately effective next week. We also will be instituting a minimum order of $25.00 as it is quite silly to pay $7.00 to receive a $2.00 item, unless of course it would cost you more than $7.00 to try and drive around to locate such an obscure item.
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Four employees just to ship, really? I would have to assume you have more then a turning business selling pens or stoppers. :)
 
Mickey said:
As a buyer and not a seller, if the item I'm buying is $5 or $10 and the shipping is $6 or $7 dollars I won't buy it. I know it's just a matter of perception but when shipping is the same or more than the item I'm buying it just feels wrong.
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I didn't read the post I will afterwords but.

The problem with this as a seller some of sell dirt cheap to begin with and try to keep the cost low so it appealing. Now with shipping we just have no control over that. just take here for a quick example $5.00 for priority shipping. Actual cost is $4.85 if you buy your label on line more at P.O. then there is all the other cost including PayPal fees. So $5.00 is a loss when shipping.

So what are we supposed to do I don't like higher shipping cost. it's a balancing act we have to build it into the price of the product. Look at some of those on eBay some shipping is outrageous but there are more fees.

It's a psychology game we play. Tack $5.00 on the total product and offer free shipping. OR sell it dirt cheap and pay for all the shipping cost and fees $6.50

It's the old drive across town 15 miles to save a penny in gas when it cost more than that to get there.

.
 
From time to time we (Exotics) get orders for under $20 worth of stuff.

First, we will try to ship in a padded envelope and refund the buyer the difference in freight.

However, sometimes a small flat rate box IS the best alternative. I used to marvel at these small orders and frequently commented to Dawn that they "UPcharged" themselves 30% when freight was added.

Then I started evaluating the options.

Suppose I want a quick pen kit. I can jump in my car and drive up to WoodCraft (closest source). About 30 miles one way, but let's say it's TEN miles. THE GOVERNMENT says your car costs you fifty cents a mile to operate (Depreciation, gas, oil, maint, insurance, etc) so the trip will cost $10 (assuming you also drive home-20 mile total). AND I have to spend a half hour of my time making that trip (could have turned a pen in that half hour--which is more FUN than driving).

AND WoodCraft is going to be 10-20% more expensive than most "on-line" sources---especially Exotics, where we TRY to stay a few pennies below "brick and mortar".

So, suddenly that $6 of freight is looking pretty SMART!! AND he keeps enjoying his turning instead of fighting traffic. Next day, he goes to the mailbox and THERE IT IS!!!

I have a new appreciation for people who worked this out long ago. Mail order increases over 25% per year in the past few years. I am beginning to understand WHY!!

:biggrin::biggrin::biggrin:Moral: Buy all your "stuff" from Exotics!!!!:biggrin::biggrin::biggrin:

(you did KNOW that was coming, didn't you??)
​
 
Louis,

Don't say that too loudly.

Actually, YOU are supposed to pay the sales tax to YOUR state. WE are only obligated to COLLECT the tax on sales to Wisconsin. So, when your package arrives, run down to the state office buildings and give them their sales tax!!! (percentage varies-so YMMV!!!)
 
louisbry said:
"Run" You mean drive to the state office buildings which is more time, gas and depreciation expenses. Can't win.
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Maybe you could put a sign (not too big) on your front door:

Received Package yesterday
I owe Dept of Revenue
$1.56 sales tax
Please pick it up here,
at your convenience!!
I am available 5-5:30 PM weekdays!
​
 
ed4copies said:
Maybe you could put a sign (not too big) on your front door:

Received Package yesterday
I owe Dept of Revenue
$1.56 sales tax
Please pick it up here,
at your convenience!!
I am available 5-5:30 PM weekdays!
​
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Then your village would probably come along and say you are in violation of sign ordinance. Here is your fine for $100
 
Smitty, and the others who commented on this post. If you are wiling to answer this Qsn. then I will give you an answer that you can count on.
How many % of the actual cost of the product you raise your price to sell an Item? (profit margin)?

I guess I probably won't get a respond to this.
 
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As I've just started to sell my pens I knew right away that shipping costs would play a part. The post office is the cheapest method at the moment for a package that is trackable, which is the most important part of shipping in my opinion. I add it into the cost when I'm quoting a price of a pen that I know will be shipped.

When it comes to placing an order for parts there are a few things that I weigh. First, is the total cost, including driving and/or shipping and taxes. Second is convenience. If it takes a week or two to get something from CSUSA or PSI when I could pick up a similar or identical item from Woodcraft or Rockler today then that may be an advantage.
 
I think you are missing some of the other expenses associated with selling a pen.

I sell a pens or any other woodturning for the same price whether it is at a show, on-line, a retail store or gallery consignment, or in my shop. That prevents any conflicts and it makes the bookkeeping easier.

Yes, there are costs for an on-line sale because of time, a trip to the post office, postage, and the time and cost of keeping a website. However, those are usually a lot less than the travel expenses, entry fees, and the sales taxes associated with the sales made at a show.

Even though there is a 40% or 50% fee for a retail consignment sale, they can be more profitable than the show because there are no other fees or expenses associated with the sale. The only other costs associated with these sales is keeping the inventory on display, and who is responsible for the loss from theft.
 
Well I'm just gonna pull up my britches and go home. My daughter owns a Pack-N-Ship store, so I know the facts. Some of you are right and some of you are way out of line. Shut my mouth.:foot-in-mouth:
 
Dudley Young said:
Well I'm just gonna pull up my britches and go home. My daughter owns a Pack-N-Ship store, so I know the facts. Some of you are right and some of you are way out of line. Shut my mouth.:foot-in-mouth:
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I won't ask why your britches were down, or are you just trying to look like the kids with their pants around their knees.
 
As a buyer here is the way I look at it. Cost of product+shipping from an online purchase vs cost of product+sales tax from a local place. All other things being equal, I'd go with the lowest total cost. I don't really care if some guy charges $1 for the product and $50 shipping and some other guy charges $52 for the product with free shipping, I'll go with the lowest total cost.
 
phillywood said:
Smitty, and the others who commented on this post. If you are wiling to answer this Qsn. then I will give you an answer that you can count on.
How many % of the actual cost of the product you raise your price to sell an Item? (profit margin)?

I guess I probably won't get a respond to this.
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I answered the ??? and have no idea what your question is.

I answered the ??? because the way Smitty put it as info to those that ship and he listed some what he calls hidden costs. As shown there are alot more hidden costs and this is no info to anyone who has shipped or bought any item . If you are in this as a business you better know the shipping costs and how you deal with them is your preference. As you have seen many deal with it different ways and no way is right or wrong.
 
jttheclockman said:
I answered the ??? and have no idea what your question is.

I answered the ??? because the way Smitty put it as info to those that ship and he listed some what he calls hidden costs. As shown there are alot more hidden costs and this is no info to anyone who has shipped or bought any item . If you are in this as a business you better know the shipping costs and how you deal with them is your preference. As you have seen many deal with it different ways and no way is right or wrong.
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John, are an electrician working for someone or do you own your own bus.? And, how did you know if I didn't sell anything before that you assumed I didn't understand what was posted, I was trying to bring a point to Smitty's attn. he'll respond to it when he can. Thank you. If you stand by you will learn what I was trying to get across.
 
phillywood said:
John, are an electrician working for someone or do you own your own bus.? And, how did you know if I didn't sell anything before that you assumed I didn't understand what was posted, I was trying to bring a point to Smitty's attn. he'll respond to it when he can. Thank you. If you stand by you will learn what I was trying to get across.
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OK I will wait because I still do not know what you are talking about. :)
 
Insurance

bruce119 said:
Well you know how a lot of people will spend a dollar driving around town looking for gas that is a penny cheaper.

It's just the cost of doing business. Packing and all that isn't really that much. Heck boxes are free the P.O. comes to me I use news paper I do use bubble wrap but it goes a long way.

So to me postage is just the cost of doing business. I think a higher shipping cost would chase a lot of people off. It's a balancing act.

You mention insurance that is the big $$ and optional. If you are doing insurance than yes you have to get that cost but that should be the choice of the customer or your policy and spell it out that would justify a higher shipping cost.

my thoughts
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Insurance protects me, not the buyer. eBay will not allow you to either charge for insurance or tell the buyer he is responsible once the package leaves your hands. You are responsible until the package is delivered.

I do not insure all packages because it is expensive and I self insure but if your recent package had gotten lost in the mail, would you have said "oh well, too bad" or would you have sent me a message saying "Where's my package?" and would you have expected to pay me again to replace the items or would you have expected me to replace them at no cost to you?
If it cost more than $30 I insure it.
 
I agree

Mickey said:
As a buyer and not a seller, if the item I'm buying is $5 or $10 and the shipping is $6 or $7 dollars I won't buy it. I know it's just a matter of perception but when shipping is the same or more than the item I'm buying it just feels wrong.
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I agree and I don't either, I go to wal-mart...but the problem is this most of the shipping costs are the same regardless of what the item costs.
 
Priority Mail

SDB777 said:
I probably charge too much for shipping, but I also don't say the cost of the product plus shipping... Just place the ad and say that shipping to the lower 48 is included.

If I'm wanting $62.00 for a pen, my ad will actually just reflect $72.50 including PriortyMail shipping to the lower 48. I also think this method doesn't look like I'm trying to nickel-n-dime the buyer out of his/her life savings.



Scott (shipping is a hassle no matter what) B
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Using priority mail there is no added cost for AK and HI....or Guam and several other places...all the same.
 
Sales Tax

ed4copies said:
Louis,

Don't say that too loudly.

Actually, YOU are supposed to pay the sales tax to YOUR state. WE are only obligated to COLLECT the tax on sales to Wisconsin. So, when your package arrives, run down to the state office buildings and give them their sales tax!!! (percentage varies-so YMMV!!!)
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Unless of course you live and work in DE...one of the few "no sales tax" states. Our assumption is that the tax is between the buyer and the buyers state/city/county government and how they handle it is their business.
 
mark up

phillywood said:
Smitty, and the others who commented on this post. If you are wiling to answer this Qsn. then I will give you an answer that you can count on.
How many % of the actual cost of the product you raise your price to sell an Item? (profit margin)?

I guess I probably won't get a respond to this.
Click to expand...

Sure I'll respond, as much as the market will bear, which varies considerably from item to item. Depending on the quantity I buy I can pay 50% more for the same item i.e if I buy 100 I might pay $1.50 and if I buy 1000 I might pay $1.00...but chances are I'm going to get the same retail price regardless of which I pay. So if I charge $2.00 in one case it would be a 100% mark up and it the other it would be a 33% mark up.
 
Selling a pen

RussFairfield said:
I think you are missing some of the other expenses associated with selling a pen.

I sell a pens or any other woodturning for the same price whether it is at a show, on-line, a retail store or gallery consignment, or in my shop. That prevents any conflicts and it makes the bookkeeping easier.

Yes, there are costs for an on-line sale because of time, a trip to the post office, postage, and the time and cost of keeping a website. However, those are usually a lot less than the travel expenses, entry fees, and the sales taxes associated with the sales made at a show.

Even though there is a 40% or 50% fee for a retail consignment sale, they can be more profitable than the show because there are no other fees or expenses associated with the sale. The only other costs associated with these sales is keeping the inventory on display, and who is responsible for the loss from theft.
Click to expand...

This thread started with shipping costs....not all selling costs. And, it isn't necessarily about selling pens. I sell mostly kits myself, pens are a sideline (and not very profitable at that)
 
Fun little thread

For the Clockman....As I said in my original post, one of the biggest causes of business failure (especially on the internet) is that people do not know their costs.

I just aimed at shipping because shipping happens to be my 2nd biggest expense, following inventory and ahead of PayPal and eBay,there are lots of other costs that might be bigger for you.
 
Smitty37 said:
Sure I'll respond, as much as the market will bear, which varies considerably from item to item. Depending on the quantity I buy I can pay 50% more for the same item i.e if I buy 100 I might pay $1.50 and if I buy 1000 I might pay $1.00...but chances are I'm going to get the same retail price regardless of which I pay. So if I charge $2.00 in one case it would be a 100% mark up and it the other it would be a 33% mark up.
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Thank, you for your reply, you and I have communicated before and you know I was not trying to put anyone on the spot. what I was trying to say was this. I am old enough to remember that there were days that everyone could make a buck and everyone had their fair share of the market. As we evolved into the digital word and world of Internet communication then the competition started to escalate. when I was a kid you worried about getting the bus. from the neighborhood and maybe the close towns next to you. The global economy and trade was in hands of big dogs. Now the darn commerce is as far as a click and there are too many competitors out there. And if you look at the statistics. Most of the commerce in USA is done by small bus. and Mom & Pop bus. nowadays. So,what makes it healthier for one small bus. than the other is their personal service and customer care. when someone like Ed, takes care and insures the package he is taking a dip in his bottom line profit, but when he gets his customer happy then they come back again and many times over. The bottom line unfortunately with resale Bus. is that manufacturers are directly in competition with the retailers and they do sell directly sometimes that makes it hard for the retailer to make that much profit. when you buy the product from them you are buying it a 70% cost to your retail price. they do not allow you to have a large profit margin. I understand where you are coming from since, those little shipping charges and all the hidden charges keep digging in your bottom line profit. well, look at it from this perspective. If you start asking for those little charges here and there soon your customers will turn away from your store. naturally everyone is out to take care of their bottom line and like it was said in previous posts the buyer will buy from the least expensive seller once he/she will estimate their cost. yes, in middle of all this mess we the small bus. men have to take the shaft and big dogs keep raising their prices all the time. But, you think we would have the resources to go to the ring and fight those guys? I didn't think you'd be ready for that. Meanwhile, do the best you can to keep your price competitive and hope that things will get better. We the little guys are the one who run this country. Now if you can maximize your profit by 100% then all the power to you, considering that you must have soem lost leader product to bring in the bus.
 
Reseller

phillywood said:
Thank, you for your reply, you and I have communicated before and you know I was not trying to put anyone on the spot. what I was trying to say was this. I am old enough to remember that there were days that everyone could make a buck and everyone had their fair share of the market. As we evolved into the digital word and world of Internet communication then the competition started to escalate. when I was a kid you worried about getting the bus. from the neighborhood and maybe the close towns next to you. The global economy and trade was in hands of big dogs. Now the darn commerce is as far as a click and there are too many competitors out there. And if you look at the statistics. Most of the commerce in USA is done by small bus. and Mom & Pop bus. nowadays. So,what makes it healthier for one small bus. than the other is their personal service and customer care. when someone like Ed, takes care and insures the package he is taking a dip in his bottom line profit, but when he gets his customer happy then they come back again and many times over. The bottom line unfortunately with resale Bus. is that manufacturers are directly in competition with the retailers and they do sell directly sometimes that makes it hard for the retailer to make that much profit. when you buy the product from them you are buying it a 70% cost to your retail price. they do not allow you to have a large profit margin. I understand where you are coming from since, those little shipping charges and all the hidden charges keep digging in your bottom line profit. well, look at it from this perspective. If you start asking for those little charges here and there soon your customers will turn away from your store. naturally everyone is out to take care of their bottom line and like it was said in previous posts the buyer will buy from the least expensive seller once he/she will estimate their cost. yes, in middle of all this mess we the small bus. men have to take the shaft and big dogs keep raising their prices all the time. But, you think we would have the resources to go to the ring and fight those guys? I didn't think you'd be ready for that. Meanwhile, do the best you can to keep your price competitive and hope that things will get better. We the little guys are the one who run this country. Now if you can maximize your profit by 100% then all the power to you, considering that you must have soem lost leader product to bring in the bus.
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If you happen to be a reseller of one of the major players in the pen kit market place you don't make any money to speak of, they sell to their resellers for no more than 20% below their own retail. I can't sell their product on eBay and make any profit at all with 12% plus listing fee going to eBay and 3% plus $.30 going to PayPal. I tried for awhile but found out I was working for eBay and the big seller, not myself.
 
I really only ship wood so not much need for bubble mailers or bubble wrap.I use all flat rate boxes/envelopes or recycled boxes from different sources(if you look you will find many easy places to get used boxes).So my costs are really tape/paper to print labels on/ink/time.The thing that bugs me most is the juice on the shipping cost from paypal,they should not take the 2.9%(or what ever it is).I charge extra in my ebay store to cover the paypal fees,but the IAP i don't really do that.Sometimes I end up out a buck or two,but sometimes I'm up on the other end so it all evens out in the end.Victor
 
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Smitty37 said:
If you happen to be a reseller of one of the major players in the pen kit market place you don't make any money to speak of, they sell to their resellers for no more than 20% below their own retail. I can't sell their product on eBay and make any profit at all with 12% plus listing fee going to eBay and 3% plus $.30 going to PayPal. I tried for awhile but found out I was working for eBay and the big seller, not myself.
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Exactly, that was my point, unless you are like walmart or Big buck retailer you won't make that much profit because everyone else got their hands in your pot before you do.
 
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