What Are Your True Shipping Costs? Are You Losing Money on Shipping?

There has been a lot written on pricing your work, but I’ve seen very little on pricing your shipping costs. This is an integral part of every sale; too much could scare the customer away all together, but too little cuts into your profit, sometimes significantly. You should Check this blog for getting more financial knowledge. So how do you determine your shipping costs without hurting either party?

What Are Your Shipping Costs?

There’s no argument that the price you pay for the actual transit of the item is your shipping cost.  But that isn’t all there is to it.  Did you wrap the item in tissue?  In bubblewrap?  Did you surround it with packing peanuts?  Is it in a padded envelope?  Did you purchase a box and seal it with shipping tape?  Did you enclose a thank you card or note?  Or a small thank you gift?  Typically referred to as consumables, all of these things have a cost of their own, and you will have to replace them in the future. Don’t forget that you can get cash advance in New Zealand to hep start your business.

Then there are intangibles.  How much time did it take you to wrap and pack the item?  Did you drive it to the shipper…  how many miles?

Figuring Consumables

I’m a believer in the adage, “A picture’s worth a thousand words.” In this case, I’d like to use an example… I’ve pictured a pair of cowboy bootees, nearly ready to ship.  I make the box for these from heavyweight poster board; I can get four boxes out of one sheet.  I use a half sheet of tissue paper in the box.  I put the booties in a clear cellophane bag, which I tie shut with three 18-inch strands of ribbon.  I include a small thank you card, which I print myself on white cardstock (one sheet makes three cards).  I wrap the entire box in one foot of brown mailing/packaging paper which I seal with clear shipping tape.  Before I ever figure the actual transit cost, how much has shipping cost me?

1/4 sheet poster board at 33¢/sheet	$.0825
1/2 sheet tissue paper at 20 for $1	$.0250
1 cellophane bag at 25 for $1	$.0400
3  18″ lengths of ribbon at 18′ for 50¢	$.1250
1 thank you card	$.0120
1 foot brown mailing paper	$.1200
2 feet shipping tape	$.0472
TOTAL	$.4517

CONSUMABLES COST BREAKDOWN

Although your packaging will be different, this gives you a good example of figuring how much it costs you to get your item ready to travel. But if you’ve been ress There’s also the issue of time.  When you’re packaging an item, you’re  not functioning as an artist; if this were an actual job in the real world, it would most likely be a minimum wage job.  The whole process for me in this example takes about 10 minutes, or about $1.20 of time at minimum wage.  So just to stay even on this shipment, I need to add $1.66 or so to my shipping price.

Choosing a Shipper

Because of price constraints, and regardless of the uncertainty of the service, I think most of us ship via USPS – the Post Office. And shipping is not the only service that people go to USPS for, because when a usps change of address has to be made, that’s the first place they head to. If you are shipping Priority or Express Mail, you can use their Click ‘n Ship site online, which will be less expensive than buying postage in person.  Plus, it will generate a professional-looking mailing label.  Perhaps the best news is you won’t have to stand in line at the Post Office to buy the postage.

The Post Office also has an electronic platform for shipping via First Class Mail Parcel.  This option isn’t available through Click ‘n Ship online; you need to download their program called Click ‘n Ship for Business.  Using Click ‘n Ship for Business will generate a nice mailing label, but it won’t have postage (you’ll still have to stand in line to pay).  But it will still save you money as Delivery Confirmation will be included in the shipping price at a cost of 20¢, instead of the 90¢ which would be added if you use the USPS form and pay at the counter.

Figuring the Total

It’s really important to own a scale for weighing your shipments.  They’re not terribly expensive  and can be purchased in big box stores (Wal-Mart, Target), Radio Shacks, etc.  It’s such a time saver to have an accurate weight when you’re checking transit prices from home to know exactly what the shipping weight will be.  It doesn’t have to be fancy; it just needs to be reasonably accurate.

When you’re researching your transit costs, be aware that size does matter!  I’ve made this mistake…  I quoted a weight-based shipping price to a customer in Canada, sold the item, and THEN found out that since my correct weight was in a box over certain dimensions, the item was going to be more than double what I quoted to ship!  More and more shippers are basing shipping costs on size and weight.

If adding the consumables cost into your shipping charge bothers you, you may want to consider raising your item prices by an average consumables-per-shipment amount to cover those costs.

If you take all of these things into account, your shipping prices will be fair to both you and your customer.

Written By iKnitQuiltSew

 

Tags: consumables, costs, customer service, Handmade, Handmade Artists, online business, packaging, SHIPPING COSTS, shipping handmade

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