Subsidized shipping costs?

[Adrian A]

So far, the policy at Featherweight Altimeters has been to charge for shipping what it costs. This includes the direct cost of postage and supplies, plus a few dollars (currently 3) to cover the time of the person who prepares and packages the order. The idea was to let customers decide for themselves if they want to save some money by combining more purchases into fewer orders. I also have chosen not to ship via methods that don't have tracking, so that means that USPS Priority mail is generally the least expensive option. When I started in 2006, a USPS small flat rate box was $4.80 and I charged $10 flat rate. Now it's $9-10 and I charge $12-$13. A few times a year I get an irate email from a customer who is outraged that I'm charging $12 shipping for an $8 battery or one or two $25 magnetic switches. I have also noticed that for myself, Amazon's "free" Prime shipping encourages me to buy more. They have really raised the bar on frictionless buying. Which makes me think, maybe I'm missing the boat and I should just incorporate shipping costs into the price of the orders on the site? What would make you happiest as a customer?

 

[Steve Shannon]

So far, the policy at Featherweight Altimeters has been to charge for shipping what it costs. This includes the direct cost of postage and supplies, plus a few dollars (currently 3) to cover the time of the person who prepares and packages the order. The idea was to let customers decide for themselves if they want to save some money by combining more purchases into fewer orders. I also have chosen not to ship via methods that don't have tracking, so that means that USPS Priority mail is generally the least expensive option. When I started in 2006, a USPS small flat rate box was $4.80 and I charged $10 flat rate. Now it's $9-10 and I charge $12-$13. A few times a year I get an irate email from a customer who is outraged that I'm charging $12 shipping for an $8 battery or one or two $25 magnetic switches. I have also noticed that for myself, Amazon's "free" Prime shipping encourages me to buy more. They have really raised the bar on frictionless buying. Which makes me think, maybe I'm missing the boat and I should just incorporate shipping costs into the price of the orders on the site? What would make you happiest as a customer?

Amazon ships millions of packages and is able to negotiate better prices and average shipping overall. You probably don’t have any of those advantages. If you add shipping to your sales price you’ll lose sales. I would suggest you give customers several options to choose from for shipping, including “hold for more items”.

 

[mh9162013]

I don't understand the Priority Mail requirement, as the USPS 1st Class Package shipping provides a tracking number. As for insurance, then yes, maybe it's cheaper to charge Priority Mail prices instead of going 1st class then adding on insurance?

As for risk of loss, I think you'll need to figure out how to define "loss." If a package is properly addressed and packaged, it's very rare for it to be truly lost or destroyed. What's far more likely is that it gets delayed for several weeks or months. So if a customer orders a product, how long must it be "late" before both parties assume it's "lost?" And assuming the customer gets their money back, how will you handle situations where the product they ordered arrives 5 months later? Do they return it? If so, do they pay the cost of shipping or will you?

I wish more companies were trying to be more fair with their shipping charges. I won't name any names, but unfair shipping charges are common. I don't think deliberate fleecing is occuring, though. I think there's a balance between a company doing what's fair and them having to spend too much extra time figuring out a more fair shipping charge.

 

[SolarYellow]

I've only figured out how to get tracked USPS 1st Class Package shipping by actually going to a post office. Maybe I'm dumb, but I can't figure out how to make it happen over the web site. Perhaps a service like Stamps.com has that available? I can see why a person running a business would have much better things to do than drive to a PO and stand in line.

 

[Adrian A]

I don't understand the Priority Mail requirement, as the USPS 1st Class Package shipping provides a tracking number. As for insurance, then yes, maybe it's cheaper to charge Priority Mail prices instead of going 1st class then adding on insurance?

You may be right. Tracking didn't used to be available with first class mail, but if it is now, then I should do that.

As for risk of loss, I think you'll need to figure out how to define "loss." If a package is properly addressed and packaged, it's very rare for it to be truly lost or destroyed. What's far more likely is that it gets delayed for several weeks or months. So if a customer orders a product, how long must it be "late" before both parties assume it's "lost?" And assuming the customer gets their money back, how will you handle situations where the product they ordered arrives 5 months later? Do they return it? If so, do they pay the cost of shipping or will you?

If the USPS loses it, I pay to replace it, including the shipping. I usually give it about 6 weeks, or more for an international order. If it eventually shows up, it's up to the customer to let me know and usually they do.

A tougher example happened a couple of weeks ago. A customer placed an order, and I shipped it to the address they provided. The USPS says it was delivered to "front porch or front door." Unfortunately, the address this customer provided was the "front door" of a small college and they never received the package. I offered significant discount on a replacement order. If I didn't have tracking I would have accepted the full loss.

I think there's a balance between a company doing what's fair and them having to spend too much extra time figuring out a more fair shipping charge.

^^^ This. Also, the options available through the shopping cart website provider can be pretty limiting.

 

[cerving]

First Law of Thermodynamics... there's no such thing as a free lunch. Charge what it costs for you to ship, maybe with a small handling fee (labels, boxes, packing, etc. do cost money). "Free" shipping is a card trick... you're paying for the shipping costs, one way or another. I have customers that regularly pick up stuff at launches that I attend, to save the shipping costs.

 

[Funkworks]

Economically, there is a total price point that maximizes both number of sales and profit. Too high: sales number is reduced. Too low: profits are reduced. A business’s goal should be to find that optimized price point. Personally, I don’t care how total price is divided into product, taxes and shipping. All I care about is total price including everything.

 

[neil_w]

A slight compromise would be to incorporate handling into the prices, and then charge exactly what it costs you to ship. It's harder to complain when one is being charged exactly the shipping costs.

 

[green dragon]

First class mail, tracked, with added insurance is generally less $$ than priority mail on small items

I am an eBay powerseller ( vintage toys and playset parts ) and ship MANY 3-7 oz packages via 1st class, even items many hundreds of dollars.
Our lack of high ship rates, I am certain, helps with sales when competitors use priority only.
USPS.com will not let you do online 1st class postage, but through paypal it will
Your milage may vary, of course.

 

[les]

One problem with raising the product cost to include shipping gets into quantity buys.
The cost to ship ONE magnetic switch probably is not much different, if at all, than shipping TWO magnetic switches.
If you increase the price to cover your cost for shipping one, then you are getting too much if someone orders two.
But as others stated, that higher cost may reduce sales.
Conversely, if you try to average your shipping costs (in 2022, I shipped x number of packages and had to pay $y), then perhaps you could come up with some flat shipping fee. There is a potential for either a gain or loss to you depending on what future sales will be and new postal rates. If shipping rates change, that could always be used to justify increasing the charge. One issue is this approach favors the buyer with large orders and hurts people making a small purchase. Which again may get you "irate email from a customer who is outraged"

Bottom line is TANSTAAFL - There Ain't No Such Thing As A Free Lunch.
Someone has to pay the (shipping) piper.

My own opinion, if your web site can support it, offer multiple shipping methods. The different methods may be faster/slower, include/exclude tracking/insurance. Make sure the buyer is aware of the risks. You want it insured/tracked and delivered by Friday, it will cost X. You can pay Y, but if lost it is on you. Let the buyer decide what risk they are willing to accept vs price.

 

[teepot]

I try to buy enough stuff so that the shipping costs spread over each item without making the item too expensive. When I buy something on line I add up the item cost, shipping and tax before I make the purchase. An example. I was looking at some ammo on Gun Broker. The item cost was good. But the shipping cost was ridiculous. So it was a no go. $18 dollars shipping on 2 boxes of ammo. Which was $50 and a 3% credit card fee.

 

[Charles_McG]

I eat half of packaging, but charge full rate on shipping. Or rather, Vinoshipper does. Alcohol compliance is a bugger.

On the other hand, I don't get many takers. Liquid is heavy to ship.

 

[jmasterj]

Check out pirateship.com. Best prices I've found.

I like Neil's idea of incorporating the handling charge into the item prices and charging only for shipping itself.

 

[rharshberger]

Amazon ships millions of packages and is able to negotiate better prices and average shipping overall. You probably don’t have any of those advantages. If you add shipping to your sales price you’ll lose sales. I would suggest you give customers several options to choose from for shipping, including “hold for more items”.

Amazon also has its own version of UPS...contractors moving their own trailers to centralized shipping hubs, so they are only paying the last 100 miles or so of shipping.

 

[Simon Auty]

As an International customer who buys from a variety of US suppliers, shipping costs are a killer.
Although I usually choose tracked shipments, I actively select suppliers who give me options for shipping and charge me the actual price (thanks Cris at EggFinder and the team at Mach1Rocketry).
I’ve not bought from some suppliers (eg Apogee) because they charge as much for shipping as the item

 

[Peartree]

I prefer the idea of giving your customers more choices rather than choosing for them. Feel free to make it clear that the cheaper USPS option may not or does NOT have tracking, but allow them to choose that option.

I recently got an email from another (non-rocketry) hobby vendor that was having a clearance sale. In particular, they had a number small parts, and many decal sets that interested me and I started loading my cart. I had a few small parts and a half dozen decal sets in my cart and, due to the huge discounts, added up to a grand sum of something less than ten dollars. But, at checkout, shipping was going to be $12 or $15 dollars. What I ordered could literally have fit in an envelope and been mailed first class for fifty cents. I cancelled the order.

Choices are good.

 

[mh9162013]

I prefer the idea of giving your customers more choices rather than choosing for them. Feel free to make it clear that the cheaper USPS option may not or does NOT have tracking, but allow them to choose that option.

I recently got an email from another (non-rocketry) hobby vendor that was having a clearance sale. In particular, they had a number small parts, and many decal sets that interested me and I started loading my cart. I had a few small parts and a half dozen decal sets in my cart and, due to the huge discounts, added up to a grand sum of something less than ten dollars. But, at checkout, shipping was going to be $12 or $15 dollars. What I ordered could literally have fit in an envelope and been mailed first class for fifty cents. I cancelled the order.

Choices are good.

I agree with your overall point, but I just wanted to note that a first class stamp in the U.S. currently costs 60 cents.

 

[dr wogz]

As an International customer who buys from a variety of US suppliers, shipping costs are a killer.
Although I usually choose tracked shipments, I actively select suppliers who give me options for shipping and charge me the actual price (thanks Cris at EggFinder and the team at Mach1Rocketry).
I’ve not bought from some suppliers (eg Apogee) because they charge as much for shipping as the item

I'm in the same boat.

I generally want my item shipped USPS, as it is usually always cheaper (and I can ask that the 'customs invoice' be at a lower dollar amount to negate getting raped at customs). The big carriers [UPS, FED Ex, etc...] are notorious for adding exorbitant "international & brokerage" fees.. (I've been quoted $80 or more for some simple items..)

If an online seller can't give me that, I move on..

I will add that I am looking at a featherweight for the summer.. how it is shipped will make or break the deal..

 

[Donnager]

Things like rocket parts (bulky, fragile, light) are probably some of the highest cost items to ship by weight or volume. Shipping costs will always be a large part of the hobby.

It's not what anyone wants to hear, but it's fair and should be expected, to pay for handling time, packaging materials, shipping costs and a reasonable markup, or else, you are shipping for free or for a loss. I would value my time enough that those costs would be covered. If you are manufacturing, it adds a layer of pricing opacity that would allow moving the margin lost on shipping to profit on the item, so you may have some room for pricing there. If you are a re-seller with fixed list prices, you will always be playing games with other re-sellers to separate yourself from the others, with shipping and service being the primary differentiators if product pricing is the same.

The reality is most online ordering sites are primarily shipping/drop-shipping businesses that in our case, happen to sell rocket parts.

Applying the race to the bottom pricing in this hobby has consequences. We (hobbyists) seem to be collectively putting all local hobby stores out of business, presumably because it is cheaper and/or easier to buy somewhere else..

 

[mikec]

Things like rocket parts (bulky, fragile, light) are probably some of the highest cost items to ship by weight or volume.

Doesn't apply to Featherweight, though. I don't think I have ever gotten anything from Adrian that didn't fit in a small flat rate box.

Ideally I would like the choice between first class and priority mail if it's really significant, but if it were only priority mail like it's always been then that would be OK with me. If one buys a single low-cost item, one should expect the shipping cost to dominate IMHO.

BTW, look at the way Digikey does shipping if you want to see how a lot of options are handled, but they're a huge operation and can better manage the flexibility.

 

[Donnager]

Doesn't apply to Featherweight, though. I don't think I have ever gotten anything from Adrian that didn't fit in a small flat rate box.

True. I was mostly talking about rocket parts, but electronics are a little different. It seems I don't get much in small boxes.

 

[bjphoenix]

People who buy online are used to paying shipping costs, and expect it. You just have to set your shipping costs to something that customers will think is reasonable, and other costs are in your overhead which is paid by the pricing of the merchandise. It is incumbent on any online retailer to determine how to reduce their business costs as much as possible including the overhead associated with packaging and shipping. There are limits to what you can do.
There was a question about pricing being unfair on multiple purchases if some shipping cost is included in cost of one item. This could be handled by giving discounts on multiple purchases.
There were comments on shipping of small items like switches. How many of these type of products could be shipped in a small padded envelope using first class shipping?
I occasionally buy little items on ebay. I have a couple of old quartz watches so when a battery dies I just order a couple on ebay. Sometimes I can buy a couple of batteries for a couple of dollars with no cost for shipping. I don't know how these U.S. sellers can do it.

 

[Adrian A]

My own opinion, if your web site can support it, offer multiple shipping methods. The different methods may be faster/slower, include/exclude tracking/insurance.

I prefer the idea of giving your customers more choices rather than choosing for them. Feel free to make it clear that the cheaper USPS option may not or does NOT have tracking, but allow them to choose that option.

About a month ago I upgraded my website hosting service to a level where they include the option for real-time shipping quotes from all the major shippers. The additional monthly cost is a little painful but it avoids errors in shipping costs, particularly on international orders.

I'm in the same boat.

I generally want my item shipped USPS, as it is usually always cheaper (and I can ask that the 'customs invoice' be at a lower dollar amount to negate getting raped at customs). The big carriers [UPS, FED Ex, etc...] are notorious for adding exorbitant "international & brokerage" fees.. (I've been quoted $80 or more for some simple items..)

If an online seller can't give me that, I move on..

I will add that I am looking at a featherweight for the summer.. how it is shipped will make or break the deal..

Customs duties have been a problem. I have had more than one international order that has come all the way back to me because the receiver didn't want to go through what their country wanted them to do after it arrived. I won't put false values on customs forms. Not sure what the penalties would be for getting caught on it but I don't want to find out.

 

[cerving]

Doesn't apply to Featherweight, though. I don't think I have ever gotten anything from Adrian that didn't fit in a small flat rate box.

Ideally I would like the choice between first class and priority mail if it's really significant, but if it were only priority mail like it's always been then that would be OK with me. If one buys a single low-cost item, one should expect the shipping cost to dominate IMHO.

BTW, look at the way Digikey does shipping if you want to see how a lot of options are handled, but they're a huge operation and can better manage the flexibility.

FYI, First Class International and Priority Mail International are essentially the same. The advantages of Priority Mail only apply to the domestic part of the journey... once it gets out of the USPS Customs depot then tracking is not guaranteed and there is no "priority" placed on that delivery. Some countries DO track them once they hit their own customs depot, primarily Canada/UK/Australia, but if you want guaranteed tracking (and faster service) you have to go with FedEx/UPS/DHL.

 

[cerving]

...
Customs duties have been a problem. I have had more than one international order that has come all the way back to me because the receiver didn't want to go through what their country wanted them to do after it arrived. I won't put false values on customs forms. Not sure what the penalties would be for getting caught on it but I don't want to find out.

+1 on that. I get a fair number of orders with people that say, "Oh just list it as a gift", or "declare minimum value". Nope. I want to stay in business. And, I don't get to bypass tariffs either... DigiKey/Mouser/Avnet sometimes tack on a tariff on parts that I buy, I don't like it but it's part of the gig.

 

[jmasterj]

+1 on that. I get a fair number of orders with people that say, "Oh just list it as a gift", or "declare minimum value". Nope. I want to stay in business. And, I don't get to bypass tariffs either... DigiKey/Mouser/Avnet sometimes tack on a tariff on parts that I buy, I don't like it but it's part of the gig.

+1 from me, too. I have sold a bunch of collectibles overseas and had to explicitly say in every listing I made that I wouldn't lie on customs forms. Not worth any risk for me.

 

[Cape Byron]

I charge full cost for shipping, but nothing for packaging. I build the cost of boxes and padding into the actual kit cost.

 

[sriegel]

I use USPS Flat Rate boxes mostly but have used First Class packages (envelopes, really) for things like a single small drogue to reduce shipping cost to the customer. I charge actual postage, rounded down (usually) to the nearest whole dollar as a separate item on the invoice. I include sales tax as part of the quoted price to make it easier on the customer (WYSIWYG).

 

[lakeroadster]

@Adrian A : Kudos to you for asking for our input.

 

[Zeus-cat]

You make great products Adrian, give people the option to have it shipped the way they want. You are not Amazon (thank God) and shouldn't try to match their policies.

I'm not happy with Amazon anyway as I just read that they are ending Amazon Smile in February.