July 5, 2008

A Word About Shipping

I don't often do business related advice on my blog (actually, this is probably the first time), but I suddenly felt the desire to chat about this. Since I'm in the throngs of shipping, I realized I might have some valuable info for some of you. Shipping charges can be quite the heated debate on the Etsy Forums and I think it will be clear what my position is.

Many of you may agree with me- perhaps some will disagree. I don't mean to offend anyone's sensibilities, but I would like to state that from my experience, this is what I hold to be true. At the same time, this is my business advice- you don't have to take it!

Thanks to a lovely nod by SouleMama the other day, I've been busier than a busy bee. This is not my first occurrence with higher volume shipping. Last year my supplies shop kept me incredibly busy throughout the holiday season. It was then I learned my lesson the hard way.  Today's post is aimed to offer what I learned. I don't profess to have the best way- as a matter of fact, I don't, because in a perfect world, someone else would be doing this for me...! Also, what applies to me may not apply to you, but I only have my own perspective, so here goes.

What's involved with shipping for every order I receive:
1. Printing the invoice. It all starts here: time and cost. Anyone who thinks that the 10 seconds it takes is not worth counting is not being fair to themselves. 30 seconds x 10 invoices= 5 minutes of your time + 10 sheets of paper + ink used. This just keeps building as more orders come in. Etsy just added a "printable invoice" feature, which I love. I'm visually oriented, so to see a picture of what I'm shipping practically ensures that I will make no errors in packing of items. Costs a little more to use full color, but the amount of time I save in rereading and cross-referencing more than evens out.
2. Marking down the information in a spreadsheet journal. I add all pertinent info regarding the tracking of the process. Etsy doesn't have a "check off" system. I've had to create a spreadsheet on which I handwrite all the info I require to make sure my packages go out on time and properly. I could type it in, but it's better to have a hardcopy and it's also easier to make notes and changes. This whole process is vital in order to keep track of progress because it's not often I can do an assembly line packing. Every order is different. And when a package goes missing (it's been known to happen) I can easily spend double the time and efforts in going through paperwork to find out the answers. And talk about a waste of time!
3. Create a shipping label. This can be done through PayPal or it may be generated as a sticker. I do this because it's clear and easy to read and it's professional-looking. Time and cost again. I've found excellent deals on shipping labels, but they aren't free!
4. Gather the items. This can be from all different areas of my house. Inventory space is a luxury and most of the time, it's stored wherever a safe, untouched place may be found. If I could afford to house it all in a designated closest, my business overhead would increase as my personal home space decreases. I can't get something for nothing. Inconveniences are costs, no matter how you look at them. This whole process of gathering, sorting, double checking and triple checking is probably the most time consuming aspect of shipping.
5. Package the items. I refuse to simply toss something in an envelope and send it on its way. Each order is packaged professionally and with care and in the appropriate packaging material. I do not charge "shipping" for my product packaging, but I do include the cost of my shipping materials- the bubble or board envelope, tape, filler and packing materials, labels, etc. USPS packaging is only good for Priority Mail orders- this would drive up the shipping even further most of the time.
6. Go to the post office. Everyone in the world complains about the lines at the post office. I wish I had a quarter for every minute of my life I've spent in waiting on a long line. My time- everyone's time- is worth something, even if it's resting for a minute to look at the sunset rather than the slow postal worker behind the counter, or the customer who is buying 3 money orders and paying with coins and staring at the back of someone else's head who is also waiting impatiently. As this is business- and it's that business that brings me to this, I treat it like business and I have to include this in my shipping charge. I use the postal kiosk whenever possible. Unfortunately, there are a number of times it hasn't worked- and every International sale must go to the counter. However long the time I spend there takes, I still have to hop in my car and drive across town. Pennies in gas add up fast- particularly these days. I go to the PO armed with my journal and I write down every order as it passed into the mailbox noting how much the shipping costs in the end. There are plenty of times, when people order multiple items where I can give them a refund.
*Don't get me started on Etsy's poorly designed "cost of shipping second item" figures. I can't tell you how often I've wound up paying for orders to be shipped as the result of undercharging on this. It's definitely a flawed system.
7. Contact my customers. This is a step I had neglected in the past. Now I do it. And it takes longer than you'd think. Scrolling through emails or convos is not always a simple process. While my main purpose for writing is to say, "YAY, your package has shipped!", each individual order requires something specific to them. I let people know if it shipped First Class or Priority, if I didn't generate it through PayPal. Sometimes I owe my customers a refund and I let them know they can expect it. Again, time, time, time.

Now, there is the thought that a lot of this should be included in the price of the item. The thing is- IT IS NOT THE COST OF THE ITEM- it's the cost of shipping and handling. So that's where I put it. Come tax time, this can become even more evident. *See DaisyJanie's comment below for more on the tax realities of what I stated here.

Be fair to yourself and your time- you cannot afford to give yourself away for free on any level of a transaction. The resentment you will feel when you could be hanging out with your kid or kicking back and watching the telly while you work to get all your packages out will eat away at you. Also it's not healthy for your business. Your business needs to make money. It cannot thrive without it. Before you think "but it only takes a second" pause and ask yourself- Is it really a second? How many seconds total have I given up? What would I rather be doing with this second? How will my donating this second support my business, even if it means my customer may benefit from a .25 savings? Will my customer even realize the gift of my time that I've afforded them?

I don't mean to sound nickel and dimey... and I'm all for offering multiple item incentives or adding a free tidbit now and again: I don't charge for my tissue paper and logo stickers- I gave away free note pads with $20 orders, I'll include free swatches of other patterns... all this is the cost of growing my business and I put that under "promotion" which is built into the price of my goods in one way or another along with overhead, cost of goods and should also include my own salary- which I have yet to see! I am working on that. See, I don't know everything! Even if I spout off like I do. If you made it this far, thanks for reading!

50 lovely notes:

Lucky Duck Designs said...

Great post, Michelle. I have to say, this is the part I like the LEAST by far about my little etsy business. Oh sure, I love wrapping the items in tissue paper, tying them up with ribbon and writing that little thank you note. But when it comes to printing shipping labels, tracking inventory and those dreaded post office lines (which in Miami seem to always involve someone jabbering on their cell phone instead of responding to the clerk who is trying desperately to finish their transaction), I admit I'm just a little bit less happy.

High Desert Diva said...

Well said.

Good idea about the journal. I must start one. And I didn't know about the Etsy invoice...so thanks for that tip!

jkziel said...

Thanks for sharing!

I haven't been printing off invoices nor do I have the best of records on my end--I like the idea of a spreadsheet and journal. I look through my USPS charges at the end of the month on my statement, but having it all in one place might cut down on the time it takes to do my books!

My time to take the item to the PO in almost invalueable these days, two *helpers* really make it hard to go!

Betz White said...

Great post, it's nice to hear how others deal with this aspect. I have my own little process where I sort the etsy "order" email and it's respective "payment" email into folders in my mail program. They start in the "new orders" folder and then I move them to the "invoices printed" folder and finally the dated "shipped" folder. It's tedious, but it helps me from losing my mind!
I often wish I could print USPS postage from home and schedule pick ups, but that only works for Priority and I ship First Class and Media Rate.

The best thing I learned from your post (aside from just commiserating with you) is that etsy now offers printable invoices! I have been printing my own. I still might tho' as I built in a shipping label that I cut off and affix to the package.

CalicoDaisy said...

Thanks. Good information and makes me re-think the second item shopping cost idea. -- Michele

Shannon said...

Great advice ~ it is so important to treat your business as such if you want to make a go of it. I do get a little wishy washy about how to handle the charges for wrapping, etc.

Keep up the great job.

mewpaperarts said...

Well stated! You're absolutely right on with all of this. And any other larger scale business is doing exactly the same thing--all of these little bits and pieces are built into every item we pay for!

Victoria said...

Great post, Michelle!
I pretty much follow the same procedure.
The biggest bug-a-boo I have, is the shipping and handling costs. Very difficult. I am constantly doing and re-doing them, looking for the best way to keep it fair to me, and yet not drive away a sale. Some sellers price their items and their shipping costs so low, I don't understand how they can afford to do business.

ellencrimitrent said...

I think this was a great post. Most people do not realized the amount of time it takes to ship things out and the costs. This world has become all about give me cheap and give it to me fast! I think the whole point of Etsy is to go back to the old ways of fine, handmade goods without the cheap, fast consumer ways. I myself am going to have an Etsy site soon and wonder all about this time it will take away from my design work, but I feel it would be nice to reach more of a broader audience since most of my work gets mass produced for big stores such as Target, Fred Meyer, Bed, Bath and Beyond and etc.

Thanks for all the helpful info, I know it will come in handy when I put up the site!! Lord knows I am still trying to navigate my way through blogging!!

Sarah McBride said...

Absolutely excellent advice and post.
There IS more to selling than just shipping. There is all the invoices and emails and standing in line. I dont think people realize just how much goes into being an etsy seller.

I hope everyone who reads this walks away with a better appreciation for all the hard work

Kreated by Kelly said...

Thank you so much for such a clear, concise blog posting!!! You were very thorough and I appreciate that!!

I always complain to my husband how long it takes me to package and ship my items. Then, I feel guilty if I charge more than exact shipping so I just eat the cost of my time.

I need to think about the fact that I am actually eating shipping costs sometimes -- let alone not having a handling cost most times too *smiles*

You rock!!!

Shell Mitchell said...

Great advice, thanks for sharing your experience.

Inky Productions said...

Wow. I haven't had to deal with any of that yet, but I imagine it's going to be difficult navigating the system. Thank you so much for this post. I'll be referring back to it in the future.

Shannon said...

Excellent post. I agree with you... there are a lot of things that go into "shipping" beyond the price of postage. I'm still trying to fine tune how I work that all out, and this post was a great way to get me thinking about it again.

Lisa Clarke said...

All so true! While I have found ways to get around some of the time-suckers you mention, much of what you say is so true, regarding hidden shipping costs, and is exactly why I build a handling charge into my shipping fees.

When I see other businesses shipping their wares for dirt cheap, my first thought is that maybe I'm charging too much. My second thought, though, is that they're not charging enough, and they will definitely feel the financial effect of that at some point.

Thanks for a well-thought-out post on a topic that doesn't seem to get talked-about much.

Lisa Clarke said...

Oh! I should mention, for those wanting to avoid a trip to the post office, you can print labels online, and schedule a postal pickup (or just wait for them to come at your regular mail time).

THe USPS site is free, but their choices are limited. I used stamps.com for many years and was able to print labels for any mail service I needed. For a monthly fee.

I've since switched to Endicia, which is the same idea as stamps.com, with just a few differences that fit my current business model better at this point.

Either option is worth checking out, particularly if you think $16/month (or so) is not too much to help you avoid stepping foot in a post office!

(I'm not affiliated with either company, btw. I'm just glad that I haven't had to wait in a post office line in six or seven years, LOL!)

Cicada Studio said...

Thanks for the tip Lisa! I've explored both and I keep waffling. If things stay steady - or hopefully pickup- I will be doing one of those options myself because there's nothing I'd like more than to streamline this process. I believe Encidia also allows you to print out customs forms, which is a real drag to do by hand!

Lisa Clarke said...

Yes, they do, which is one of the big reasons I switched. I hate hand-writing those suckers :-D

lotta said...

Can't thank you enough for this post. It is so true that an enormous amount of time and resources are spent on service, packaging, and shipping, all of which is hard to recoup. It sounds like you have a great system down, and of course you should charge for it.

The Lil Bee said...

I actually really appreciated that breakdown, even though I rarely order from Etsy and don't have an Etsy business. It's interesting to understand the back-end, and though I think you go above and beyond because that is your nature, this gives a general idea of what most Etsy business owners are doing behind the scenes. I hope you continue to grow and see some money in your salary, as well!

Jus Shar Designs said...

I don't like preparing things for shipping either. Especially if I know I'll have to go buy tape, tissue, or bubble wrap because I ran out. Or because I don't want to drive across town right then.

There are so many complaints about the cost of shipping, and finally someone documented it nicely so people can see how involved it is when you don't have a company mailroom to do it for you.

Shannon said...

All so true. And your shipping & packaging is so nice! My measly fabric in the brown paper bag is all I can muster, sometimes the buyer gets a print out of the washing instructions + my little scribbled note, if Ive remembered to print out those instructions.

My time on the other hand always seems to come free. Must work on that.....

Marissa Fischer said...

I agree with you 100%. It takes me about 30 minutes once I finish an item to get it ready to be shipped and take it to the post office (I want to see a postal worker take it I'm not leaving product on my porch), and I live reasonably close to the post office. And you are so right about all the communication time that takes so much longer than one would think.

Fog and Thistle said...

Very good and insightful post.
I'm going to try that Etsy invoice today when I pack up an order.

Fabianna said...

Thank you for this info. It has been very helpful.

Megan McGory said...

Now...if only we could get the buyers to understand our shipping & handling costs if our price doesn't match the postage on the envelope...

I will say this is great information! As for gas, I rigged my bike to handle packages and I bike to the post office. (Sure, more time? I can use the exercise anyway.)

Keys and Memories said...

Great advice! I use the Paypal packing slip but for me a packing slip is key!
Also Littleput books turned me on to Endicia which allows me to print first class international. I have cut out post office trips 100% now and it is a huge time saver.

Jesse said...

Thank you for this post! The journal to keep track of shipping costs is a great idea, particularly for me with the exchange rate.

MoonMaidenSoap said...

This is all very good information and great advice. Thank you for taking the time to compile it all so neatly into one well-written post.

I'd be very interested in seeing a copy of your spreadsheet (or something similar). :)

Peace

Jill Christine said...

Excellent points -- it's up to us as small businesses to set our shipping costs fairly and cover our time and materials. I have my packing/shipping methods down to a science, but the process can still eat up a few hours a day during the holiday season. I always cringe when I see someone announce that they eat some of their shipping costs to keep their rates more attractive -- this perpetuates the illusion that shipping is cheap, and that's harmful for all small online businesses.

Karin Grow said...

Thank you so much for this article. I agree wholeheartedly. You've really helped a lot of us put things in perspective when it comes to shipping, and now I have more tools to get better organized. Karin

kickpleat said...

great post. i don't print off invoices because i like to keep a paper-less office (i make cards so i feel i use enough paper as it is!), but good tips. it's true that most people don't take into account their true cost of time and shipping and handling charges when they price on etsy.

Leanne Graeff said...

Well said! Thanks for reinforcing my feelings about shipping. I love seeing all of your little envelopes stacked up ready to go!

Hoppo Bumpo said...

Thank you for sharing your thoughts and experiences. This is a great post; especially for someone who is hoping to set up an Etsy shop.

Barbra said...

Well said!

vana chupp said...

wow...well said! You answered sooo many questions i had in my mind. My husband is the one telling me to put every second down, the time i spend responding to messages, questions of clients...and than making proof after proof for them...This has taught me a lesson or two. Thanks!

Jessica Mott said...

Thanks for the great info, Michelle. I've just opened my first Etsy shop, so I will definitely take your words into consideration.

Cheers!

littlebyRD said...

Thanks for all this info - it is easy to forget how it all adds up! I always get worried that someone won't want to buy if there is a higher shipping fee but it has gotten expensive with just the postage - not to mention the time.

daisy janie said...

Excellent post. A detailed summary (is that an oxymoron?) of a very important business function.

When you're a small company whose focus is on handmade goods, it's a challenge to find a way to absorb these costs other than an outright line-item charge to the end user called S & H. Bigger businesses can and do pad their product's retail price to offset this expense - and make it appear as though their shipping expenses are not as great (and buyers think they're getting a good deal). Their profit margins have a lot, a lot, a lot of wiggle room for covering this overhead. And while I agree wholeheartedly that these shipping expenses are not truly the cost of the item (itemized expenses will delineate the two as you suggested), it is indeed sales income. The IRS and state revenue departments (who collect sales tax) don't care what generated your buinsess revenue, thereby giving businesses the option to either pad their products' prices to get their shipping costs back or keep the two wholly and completely separate. It's a marketing tool that, like the product and packaging attributes, creates a perceived value or not in the buyer's mind. Companies can flex that option as necessary to increase sales.

I realize what you're ultimately saying and why this post is invaluable is that most of us have no clue how much time we put into this aspect of our businesses, and that it's worth revisiting to make sure you're paying yourself for it somehow, somewhere, some way!!!!

Cicada Studio said...

Excellent points Daisy Janie!! Thank you! As I'm far from a tax expert (another hugely time-consuming and headache-inducing aspect of business), it's true, I neglected to say that any profit in the s&h aspects will also be considered income. And it is true that it's commonly put that in the cost of item. This doesn't work for my small business world, as I have to keep the item cost as reasonable as possible with a very narrow profit margin. Wholesale prices are based on this retail price and I'd rather not drive it up further with incidental handling fees for fear of losing potential business. I also can offer customers better deals on combined s&h fees than if I absorbed that into the cost of the item. Yes, perhaps if I had more wiggle room, as you stated, I'd be able to reconsider my position in the name of profit building ie: my salary!

The general misconceptions in a venue like Etsy, is that shipping is cheap based on experience with larger retailers that have that wiggle room. Do we see the irony here? There's constant talk about how it should remain a "small business world", but that sellers should offer large business perks to the customer. You can't have it both ways. Supporting small businesses will always cost more comparatively.

Thanks for the clarification. See? I'm still learning!

Krissy said...

this just makes me realize how incredibly unorganized I am. holy cow... great post!

A Print A Day said...

i agree with your advice, and it's nice to see your process.

it's good to be meticulous, practical and fair.

and you shipped my fabric fast! i was impressed girl!

Heather Moore said...

Wow, what an excellent post! It's great to approach Etsy business in a business-minded than hobby-minded way, which is somehow the temptation. Thanks, Michelle!

JLC Studio said...

Wow!! Great post Michelle and even better feedback from everyone. Great ideas and good tip about the Etsy printable invoice. I haven't shipped anything lately but next time I'll have to check that out!

Bonbon Oiseau said...

nice cost of doing business post sister! i ship items ordered on my website (i don't have an etsy shop..should i?) in a similar way.

your breakdown is great--over the years i have done a few things that have made my life a little easier:
1. i only offer usps priority with delivery confirmation now. (unless they need something faster then we deal with fed ex)
this way i am able to order boxes & labels free and in bulk from usps and there is no question about loss when you get a tracking # with delivery confirmation.

2. invoices do take time to fill out no matter what-so cheers to you fort taking it into account! I have a template and i cut and paste information...ultimately I am hoping to design a website with a check out that creates the invoice for me & I can just add some info to it if need be and hit print! (i like peepkeep and paper source for inspiration on this). always working towards automating!!!

3. i have email templates to send to my customers when their order comes in and then again when it ships--i just fill in the tracking number and cut and paste their names and order information.
this has saved some time for sure!

4. i consider the cost of wrapping, invoice paper and PO time part of the handling part of shipping and handling...the time it takes to package and invoice I add to the wholesale price of the piece esp since i've gotten employees...

Brava for a very good and informative post.

the Campfollower said...

Your packaging rocks! When I get little shipments from you they are like a birthday present to myself. All prettily wrapped up. You have inspired me to take the time to make my shipments prettier than stuffing them in a flat rate box. I love what you do!

Jennifer Ramos said...

Great points you made, Im dealing with all those issues as well... : )
We should link up , i'm sure my readers would love your blog. let me know : )

Jen Ramos
'100% Recycled DESIGNER Cards & More'
www.madebygirl.com
madebygirl.blogspot.com

:: e.k.o said...

Great tips. I am thinking about opening up a Etsy shop soon, and I've been an avid Ebay and Half.com seller, but it's these lessons I don't want to learn the "hard way," as you say.

pmthreads said...

Such a great post, and a difficult thing to get used to when you start selling things. Luckily for me, my work is sent as a digital file, so I only ship random things, like supplies I am trying to get rid of. (And before that I made fewer pricey items, so I did not have to ship often)

Etsy's shipping is seriously flawed, even when selling single items. I can mail the same package to my own state for $5, or across the US for $10. How are you supposed to create a set price for that?

I don't even bother with the 'shipped with a second item' rate, but say in the listing that I will combine shipping costs. Even then I have had an active Etsy seller say "do you combine shipping? Because it says in your shop you don't".

But what I wanted to tell you about are 'text expanders' that you can get to help cut down the time spent writing emails. Basically you type a few letters (an abbreviation you have pre-set), and it will insert whole sentences or paragraphs for you.

So, you could easily say something like "I just wanted to let you know that your package shipped off today...", and create a few different options for the different shipping services & delivery estimates. Make an entry for any phrase you find yourself typing out a lot & it saves *so* much time!

(I currently use FastFox, but would proably not recommend it because of the customer service. But look into Quick Type, Short Keys, Speed Typing, or Ditto Shortcut Expander. One is free, the others $20-30.)

Uneekdolldesigns said...

I wish everyone would read this... I see so many complaints in forums if they aren't charged the exact cost of just the shipping, forgetting about the other things involved...