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The True Cost of Shipping to a Business
Clankeye
Posts: 3,928 ✭
So I was going to buy a coin yesterday. With a company I have never dealt with before. Which I am always a little wary of, but after weighing certain variables and making sure that they at least stated they have a return policy, I was going to do it. One of those, "can't really afford it, but I'll figure it out" purchases. So I go through checkout. I'm sweating, just about to pull the trigger on this, and then it pops up that Shipping (USPS) will be $13.00.
Stopped me dead in my tracks.
This is an item that should ship for $5.00-$6.00 at most, insured. I know that may make me sound cheap. But, it was just enough to put the kibosh on the deal for me. I am just not going to deal with companies that are taking advantage of shipping costs like that. On principle. I can live without the coins, others will come down the pike (in this instance), but I refuse to be gouged on shipping anymore.
My point is shipping is a very important part of the service any truly topnotch company offers. How fast it's sent, the packaging and the cost to the customer. It is in a companies (and individuals) best interest to get this simple thing right. Sometimes it's all in the details. It can be a thin line between outstanding and mediocre--or poor. And to me, if a company is missing the boat in this area, they probably are in others also, and I will be not inclined to deal with them.
Clankeye and Sons -- Quality Hot-Air Since 2002
Stopped me dead in my tracks.
This is an item that should ship for $5.00-$6.00 at most, insured. I know that may make me sound cheap. But, it was just enough to put the kibosh on the deal for me. I am just not going to deal with companies that are taking advantage of shipping costs like that. On principle. I can live without the coins, others will come down the pike (in this instance), but I refuse to be gouged on shipping anymore.
My point is shipping is a very important part of the service any truly topnotch company offers. How fast it's sent, the packaging and the cost to the customer. It is in a companies (and individuals) best interest to get this simple thing right. Sometimes it's all in the details. It can be a thin line between outstanding and mediocre--or poor. And to me, if a company is missing the boat in this area, they probably are in others also, and I will be not inclined to deal with them.
Clankeye and Sons -- Quality Hot-Air Since 2002
Brevity is the soul of wit. --William Shakespeare
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Comments
There is nothing cheap about feeling the way you do. I agree 100%, some dealers make addt'l
money on shipping, especially on $20 coins, when they charge something like $7$ or $8. I understand there is labor and overhead, but $13 is a ripoff. I make it a point to keep a list of these dealers and not buy from them. I also get very upset when I pay for insurance and the package comes back with a label of $1.76 on the package, and I paid $4.00 but $1.50 in insurance through paypal. I would email the seller letting them know that you were ready to complete checkout and then got stopped like a deer in headlights.
Best regards and Happy New year,
Brian.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't an optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
It amazes me how some companies will not even go an extra inch, let alone the extra mile, to try to build a repeat customer base.
Now, the companies and dealers that do, and I know of quite a few that do, make it all worthwhile. And they raise the bar for the rest.
Clankeye
Now that everything is becoming so instant, far-reaching, and anonymous due to the net, I feel that we all, businesses and individuals alike, would be doing ourselves a great favor in the long-run if we made that our focus.
I'm not proud of my record in terms of how many people don't appreciate or prefer what I do or how I am, but I am proud of that fact that every single one of them can trust me with their kid, wife, money, or coins. I'm internet-ready, baybay!
In my auctions, I state that Priority Mail shipping is $5.15 with $50 ins. every extra $100 worth of ins is $1.30. I like priority mail because the boxes are free. If someone askes me to ship 1st class I will.
According to the USPS postage calculator, it will only cost the seller $1.90 to send the coin. That's quite a bit less than the "actual cost" he quoted. Small things like throwing in an handling cost and stating otherwise is enough to keep me from buying from him again.
Obscurum per obscurius
On an $8.00 coin, to pay an extra $1.60 over what the real cost of shipping is amounts to a 20% buyers fee.
The item I was going to purchase in my initial post was just under $500. That particular item should be sold now, and on it's way to me. But, it isn't, and it's not the kind of thing that goes flying off shelves. Hence, my thread title, "The True Cost of Shipping to a Business."
Carl/Clankeye/Clank--whoever.
How much was the purchase price of the coin, Clankeye?? Insurance rates have gone way up.
<< <i>I had the same experience with one yesterday on ebay, shipping was $12, and insurane was $5 extra. This on a coin going for around $1000. >>
If you take Marty's math of 5.15 plus 1.30 for each hundred dollars worth of insurance 17 bucks actually comes in a little low.
The last time i shipped an $1800 coin registered/insured mail, which i feel is clearly the only way to ship valuable numismatic material, it cost just shy of $13. This is exclusive of my time, materials etc.
I never have a problem paying to have a valuable item delivered securely. I don't mind paying someone for their time.
My girlfriend runs an internet clothing company which charges $6.50 to send a $34 item via priority mail with delivery confirmation. This represents nearly a 20% markup that i have never heard anyone complain about.
If a shipping charge is going to be a significant portion of the sale price then by all means figure it in to the equation.
If a coin is a $5 item and shipping is $1 that represents a 20% markup in price which is considerable, but i don't think anyone could possibly complain about. If you do have a problem, don't buy.
If the coin is a $500 coin that i am very interested in and the shipping is stated as 15 bucks, (3% of the total price) i probably won't even blink an eye.
z
Russ, NCNE
<< <i>If the coin is a $500 coin that i am very interested in and the shipping is stated as 15 bucks, (3% of the total price) i probably won't even blink an eye. >>
Well, Zenny in this case I blinked an eye. Because of not being very familiar with the company, and knowing fully insured the shipping would be 6-- 7 dollars at most. Perhaps I have been spoiled, it's possible. One company I deal with never charges shipping at all-- that is not a realistic expectation and I would never ask a company that doesn't know me to wave shipping charges. I would never ask one that did, for that matter.
You can make a case for a company's expenses, if you want to get down to the wage of the employee packing it up, and the cost of a cardboard container, and the ink that the printer used to print your address, etc. etc. But, the fact remains there is a window of exceptable shipping charges to me. And like you said Zenny, if it isn't there, don't buy it. It wasn't and I didn't. I'm not mentioning the company by name. I'm not on any vendetta, just sitting here on a New Year's Eve morning and thought I'd have a little discussion at the water-cooler about shipping charges.
Clankeye
C
Obscurum per obscurius
Russ, you can buy bubble mailers on Ebay for only $4.99 for 50. If you by more they get even cheaper so don't assume they bought them from office max or wherever for 40¢, more then likely they only paid 10 - 15 cents for them.
<< <i>knowing fully insured the shipping would be 6-- 7 dollars at most >>
How do I send a $1,000 fully insured for $6-7? A $500 item first class insured would be about $7 for First Class Insured. Registered Mail, which should be used for an item of this value, costs more.
Editted to add Posted by itsnotjustme. I didn't realize my son was logged on. doh!
<< <i>How do I send a $1,000 fully insured for $6-7? A $500 item first class insured would be about $7 for First Class Insured. >>
The item I'm talking about was $450.00. How do you send $1,000 fully insured for $6-7? I have no idea. But, as you said $500 or under should be done for 7 or less. Which is exactly were I pegged it.
I never mentioned the $1000 dollar figure. Someone else did.
Clankeye
The coffee is begining to wear off now. I will accept that I have said my piece.
Carport
You are obviously a great communicator, as evidenced by your numerous literate/humorous/thought provoking posts here. Did you check for a phone number to see if the shipping charge was negotiable? Or perhaps try emailing them? Maybe they'll accept a cameo role in exchange for shipping?
Russ -
Did you request insurance?
Do you like the coin?
My humble suggestion is to communicate your dissatisfaction to the seller, not merely to write them off forever and ever. Any good businessperson will try to make their customers happy, perhaps they would be willing to ship to you in the future in a manner that would make you more comfortable?
z
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't an optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
The buyer didn't say that you pay only the actual postage and insurance charges. The quote you had in your first post was:
<< <i>The auction description said "Buyer pays actual shipping and insurance cost," >>
It does not say buyer pays ONLY actual shipping....
You pay what he asks and you HAVE paid the actual shipping ad Insurance costs, plus some more for him!
He hasn't lied at all. You inferred something that wasn't there.
You actually get to pay shipping and handling!
Now that cracks me up!
Clogeye
In a retail environment chances are you pay $13 and or more for shipping everytime. The difference is much of the time the cost of shipping is factored in the price of the item. Many will instantly say "well that's how it should be always". Believe me, if you are a collector who often makes multiple item purchases it is generally to your advantage if the shipping charge is not factored in the price of the item. If that is the case you are paying multiple shipping costs for one shipment. Also, if you go to the retail location to buy you would be paying for the shipping even though no shipment was made. The key to this whole shipping cost issue is disclosure. One of the first things I do when I go to a web site is to check the site map for shipping costs. I know I cannot make a cost value decision without that facored in.
Many of the replies here are answering the question "what did the Post Office charge the business to ship the package?". That can be answered by counting the stamps.
Now to the question at hand "what is the true cost of shipping to a business?"
I am not a dealer, but I do own a business and I deal with these costs everyday. Especially this time of year as we develop our forcasts for 2003. I will try to transfer my situation to that of a coin dealer.
First of all it is not possible to put a total dollar figure per package. Per package cost is a function of volume. If I am shipping 1000 packages a week my cost is considerably less than if I ship 200 a week, which is considerable less than if I ship 50 packages a week. In that this is hypothetical I will need to use some "If, Then" statements.
If the dealer is a small one man operation then he likely can handle the few packages a week by himself. The only cost is that with the added time requirements he doesn't get home on time to have dinner with Mom and the Kids. When I started my business and was doing everything myself, I too didn't get home for dinner with the wife and kids. That is a cost I will never incur again.
If the operation is more than the dealer himself, then the largest cost is Labor. If the dealer has a coin shop, his current employee can not leave the floor and has to keep a keen eye on customers so the dealer will likely have to hire an additional person to handle shipping. This creates quite a dilema because the dealer needs a trustworthy, detail conscious employee who is interested in working part time. If the dealer had enough volume to hire a full time employee that would make it easier. Now how much does he pay this employee. Hmmm.. this guy will be handling very valuable items and any error could result in a huge loss. He also needs to be of great integrity as he will be heading out to USPS with thousands of dollars of the dealers stuff. Sounds to me like an expensive employee. This is no minimum wage employee. Are we talking $12, $15, $20 per hour? Does this employee need to be bonded? I can't answer that. That is a risk management decision for the dealer. After payroll taxes probably $10,000- $20,000 for a part-time situation. $25,000 - $40,000 for a full-time position.
If the dealer uses the USPS (which is less cost to the customer in most cases than UPS or FedEx), then he has to factor a transportaion cost. Does he need to purchase an automobile to get the coins to the USPS? Probably not. But now his employee is required to use their personal car. That will save some money. Now the dealer's cost is mileage paid to the employee. A couple of bucks a day. Ten to twenty bucks a week. $500 to $1000 a year.
The dealer now has an employee using their car for company business. He now has to get a rider on his business insurance to cover this situation. My employees rarely, if ever, use their personal cars for business. It does happen so I choose minimal coverage for this. It costs me $300/ year. I know a guy who owns a courier service where his employees use their own cars. His cost is $35,000/ year. I would guess in this case probably $500-$1000 per year.
Now the dealer has an employee driving an automobile on the job. The Workers Comp clasification just changed increasing the dealars annual Workers Comp insurance by $1000 per year.
I have not even touched on supplies, the actual shipping charged by the Post Office. Overhead requirements such as space, computers, etc. And the greatest cost is what I refer to as the "Aggravation Index". From what I have figured above I am glad that I am not a coin dealer.
Wouldn't the grammatically correct thread title be "The true cost to business of shipping"?
Russ, NCNE
Very nice essay there, i agree with much of it. I just don't understand, after all that, how 13 bucks on a 450 dollar item is too much to pay, simply because of WHEN the seller revealed his shipping cost. Isn't that what "checkout" is all about? What, is there supposed to be copy somewhere else on the website that says "WARNING: the shipping charges that appear at checkout may cause dizziness, loss of breath, nausea, swelling, redness around the infected area and jaundice."?
Your post, otherwise, is extremely logical and persuasive.
z
p.s. very glad to hear you no longer miss dinner with the family. ;-)
I posted a thread several weeks ago where a German seller charged me $1.50 to ship a coin from Germany and it arrived here in 4 days. Board member & error Fred Weinberg dealer ships FREE Registered shipping on almost everything you buy from him whether over the phone or from his eBay auctions.
You can tell the difference between a home seller & a real business by their shipping charges.
I guess it's also nice when a dealer charges enough for their coins that their profit margin is so great they can afford to ship registered mail for free.
Not to beat a dead horse, no where in my post did I opine on what a dealer should charge. Free shipping is great. And can be a good marketing decision, however, you are paying for all the costs I listed whether it has free shipping or not. If someone does not pay those costs, then there is no business. As I clearly stated up front, disclosure is all that matters. If I see a product listed at $500 and free shipping at one web site-- and I see the same exact product listed on another web site for $400 and $50 shipping, I'm in the long line paying $50 for shipping everytime.
Even 1st Class shipping requires a seller to buy an $.80 padded envelope (you only get them for $.40 if you buy in bulk), and don't forget the rolls of tape you end up going through. It's a royal pain in the butt to ship anything anymore, and I generally no longer concern myself with what shippers charge.
Cranktoe
I also refuse to leave good feedback for a Seller if their shipping is inflated. I don't leave negative either, but I won't leave them feedback at all. For instance, I got conned on some high shipping charges for about 6 auctions from one Seller. I emailed them in advance to verify that they did combine shipping - and when it got to nitty gritty - they still jacked it up. I questioned the Seller and even called them long distance at my cost. It is principle. Since shipping rates have gone up - internet buying just isn't what it used to be.
To cut shipping costs, I recycle those padded envelopes and you can also get free shipping supplies, including tape, from www.usps.com and the other shippers as well. I also recycle all padded supplies such as bubble wrap - and never have to buy any. You can also get it from stores if you ask. My hubby works at a dealership and he brings me all kinds of boxes and bubble wrap. I am sure all kinds of businesses have these things that they throw away - Just ask.
If everyone stood up for principle and quit buying from those folks who jack up shipping costs - maybe they will eventually get the message. I have posted on this subject before on this forum. Of course, some folks say it doesn't matter to them - but it does matter to me.
A good example: several months ago I won a $45 Morgan on eBay. The seller charged me $2 shipping $1 for insurance. So far so good. So I get this large (13½x11½x2½) red white & blue Priority Mail box filled with stryofoam packing peanuts & a cute little red white & blue #10 envelope inside with a flip with a Morgan in it, total postage cost $5.15, didn't have to sign for it or anything.
And I'm thinking hmmm...yesterday I mailed a Morgan just like it for $2.80 and the seller has to sign for it because I insured it for $51.
Total was $362 I charged $7.30 s/h/i i sent it out registered mail cost me $12.07
Total was $91.77 i charged $3.30 s/h/i i sent it out package service with ins cost me $4.27
And on and on This does not include mailers or tape or time ,i will never send anything out without insurance and a tracking # maybe that is why none of my coins are ever" lost in the mail"
I go the extra mile to insure whoever buys from me GETS the coin they paid me for.
on a $450 coin $15.00 s/h/i is not out of line
on a $10 coin it should be $3.30 unless you ,as a buyer are going to take the responsability of "lost in the mail"
as a seller i feel it is my responsability to make sure you get the coin !!
I agree there are a lot of crooks out there trying to make extra money , but do try to understand there is a lot more involved than just postage and ins .
Just to get back to you why I too would have pulled the plug on Clankeye's coin at check-out. When people make a purchase decision, they are weighing if the cost equals the value of the item. In this case I would have based my decision on the $450 plus $5-$7 for shipping. I would have assumed the $5-$7 as that seems to be customary for many dealers.
So based on my assumption I make my decision to buy. When I find out at the next step that the ship cost is different from my original assumption it forces me to decide all over again regarding the cost/value issue. The problem is that I already convinced myself of the fair price I am willing to pay. Now the price has increased. Now if I buy the coin I have to contradict my belief that the assumed price was fair. That's the rub. If I had known during the decision making process that the total cost was going to $463 I could have made the decision without the conflict of the prior decision. Who knows, the $463 may be a great price, but psychologically, the deal is not nearly as good now.
I have stated over and over again that clear disclosure is the answer. As a business man I know that all disclosure needs to be made prior to the decision point. As everyone knows, fine print and after the fact disclosures only piss people off. I don't want to get into psycho-babble here but any conflict for a purchaser quickly brings on a bad case of "Buyers Remorse" and good-bye sale.
Has anyone considered the following?
If you are selling an expensive coin on Ebay, say over $500. Would it not be good business sense
to work your shipping charge into your opening bid. This way you gain repeat business and still
make money. I have never paid more than $7 on shipping for any coin that I have bought on Ebay.
I have bought coins for $5 and also for $1500.00. I guess the sellers who do this are winning because they are obviously getting more business and more bidders. Think about this as a matter
of principal. Even if it costs you $20 to ship a $1000 coin, would it not make sense to absord that
$15 difference and only charge $5 in your ebay text description. Obviously you stand a greater chance of attracting more repeat bidders if you charge $5, and in the long run you make more money. Has anyone actually thought about this?
Happy new year,
Brian.
Yes, maybe they need to eat a little shipping and be thankful they are doing business. And when doing business in volume it makes up for it. But try and be "right" and cover all expenses will not really make a person a winner.
<< <i>How about a reply to settle the discussion once and for all.
Has anyone considered the following?
If you are selling an expensive coin on Ebay, say over $500. Would it not be good business sense
to work your shipping charge into your opening bid. >>
????
Opening bid doesn't really mean a whole heck of a lot. Once the opening bid is made, how can you possibly preserve the included shipping charge. Unless, of course, the starting bid is high which probably means no one is going to be bidding on the thing anyway.
Fats -
makes sense, although realistically for me 10-15 bucks to ship a fairly valuable item securely still seems pretty much fair enough.
I always figure the cost of shipping and insurance in any coins I buy through the mail (ebay included). If the total is out of line, I won't buy it. However, if someone has a high shipping cost and the item is cheap, it doesn't scare me off. I purchase based on the total including S/H/I. One way in which some dealers can keep the commision cost down is to charge extra in shipping and just about give the items away.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
I can't speak for anyone else but I have been shipping coins via USPS (registered, insured, return receipt) for nearly thirty years without ever having lost a package. It's not the most economical way to ship coins but it is the safest and that's why I utilize this particular service. I charge my customers a flat rate of $10 for orders under $1,000 and can assure you that I lose a little on each shipment. A few have complained about the ten bucks and I'm sure a few have not bid in my auctions because of this charge -- but I don't profit from it and I would rather be safe than sorry. An ounce of prevention is worth a pound of cure...at least it is too me.
Best Regards,
Mike De Falco
Visit Our Website @ www.numisvision.com
Specializing in DMPL Dollars, MONSTER toners and other Premium Quality U.S. Coins
*** Visit Mike De Falco's NEW Coin Talk Blog! ***
Some people look at the S/H fee in relationship to the postage on the envelope and think the seller's making big bucks on rip-off shipping.
A bubble envelope costs me $.17 per 100 (here) and I wrap the slab in bubble wrap so that makes it go over 2 ounces, so it's $.83 in postage. $1.01 costs - plus eBay and PayPal have their hands out too.
I charge $4.50 and all I do is charity work to provide the nice people of ebay with cheap coins.
Then, if the buyer wants to bet the post office that they'll lose his package, then I charge and extra 20-50c over USPS rates. While I'm Standing in line to place the guys bet I'm glad to know I'm getting 20c for it.
Don't tell anyone
Then I get this email:
Hi!! I hope you had a Merry Christmas and have a Happy New Year. I'm sending payment via paypal.
I'm sorry - but I won't do business with you any more - Way to high for shipping.
So I'll probably be neg'd for my shipping. I sure hate losing a $2 buyer though.
My posts viewed
since 8/1/6
such an item they will not return your s/h so can make lots of money even if it all comes back.
There should b a federal law against mail order companies charging for shipping and handling.
If the item is'nt being sold at all over the counter then what possible justification can there be
to charge all there customers extra? If shipping and handling (their business) is so onerous to
them then perhaps they should find a new line of work.
The best for me is when they charge a very low rate which won't quite cover the actual cost of
shipping. It makes it look like they really want to do business and don't expect returns.