Thursday, December 1, 2016

Shipping Costs (for items)

So, someone emailed and asked today if I charge money for shipping items.  If you have ever tried to buy something from my webstore or emailed me asking about getting items shipped to you, you already know the answer to this -- yes. 

But let me share why, in the world where everything is free shipping...

So, most of the items I sell are hardly marked up.  I think the highest mark-up I have on anything is 30%, and that's the herb sampler and supplement jars.  Now, let me break that down for you.  I don't know exact prices of this stuff, because I figured it out awhile ago, so please bear with me.

For me to get $8.50 to charge you for this, that means the herbs themselves and the jars they go in, together, cost $6.50.  Great, you say, you're making $2 on the jar!  Hold on, back it up.  Whatever portion of that $6.50 the herbs are, that's not including the cost to ship them here, that's the literal cost of the herbs when I buy them.  Same with the jars, I have to go get them.  Every time I order herbs from one of the two places, shipping is $15-20.  How many jars and herb baggies does that make?  I don't exactly know, but not many.  Say one order of herbs makes 40 jars, just to make it easy, so it's 50 cents per jar, with shipping divided out.

Well, someone has to put these jars together, as in, mix the herbs up.  If it was just a handful of this, a handful of that, it'd be real quick, but I've actually taken the time to figure out how many ounces (or half ounce, or 1/4 ounce) of each herb I want in there, to have a nice mix where all the herbs are well represented, without having too much of anything and too little of everything else.  So, I have a little sheet which tells me, ok, I need an ounce of rosehips, and ounce of rosebuds.. and so on.  So, I get all the bags out, scoop out the required amounts, and mix.  Wait!  I know you're saying, why don't you make one huge batch!  Well, the thing is, some of these herbs are significantly heavier than others.  I can fit 8 ounces (that's a half pound) of rosehips in a quart sized baggie.  But for calendula, 3 ounces almost fills a gallon baggie.  It's a lot lighter.  So say I mixed up huge batches... the rosehips, being heavy, will sink to the bottom, while the calendula will sit on top, being super light.  So, one jar at a time, I mix.  I don't pay myself, so there's no actual cost in this, but there is time. 

Oh and the labels.  Each jar has a cute little label on top that says what the jar is, and has a little chinchilla picture.  A lot of them come in a package, so for ease of this, let's just say, between printer ink to print them and the label itself (which naturally, are Avery labels, since the super cheap ones don't stick worth a crap), it's 25 cents per label.

But hold on... that amount of herbs mixed, mentioned above, doesn't quite fill the jar.  If you've ever opened one of these jars, you know that I pack them down quite well and stuff quite a bit in there.  Well, the amount mentioned above will fill the jar, but I need to top it off.  So usually I make one more batch of the mix after I've made my jars and use that batch to top off the almost-completed jars.  I never figured this amount into the cost (I know, really, all of this should have been figured in, but...).  Anyway, I can top off about 5 jars with one mix.  So, $6.50 divided by 5 jars is $1.30 in additional herbs.

And that's it! 

So we then have:
-Herbs $6.50
-Shipping / gas $0.50
-Time to measure out herbs and mix up jar
-Label $0.25
-Additional herbs $1.30
$8.55 cost + time

Well crud, I only charge $8.50 for the things!  The nice thing is, since they are herbs, they don't go bad and can pretty much indefinitely sit in those jars.  But see, the mark-up is from the price of what's literally going in. 

Same for the herbs that are in baggies -- I've never actually calculated what those baggies are costing me, per little herb bag sold.  And I know, you're out there saying, well, maybe you should.  Ok, grant me an extra few hours a day, and I gladly will.  LOL.

Anyway, for purposes of shipping, I'll pick a lighter item, say a toy.   The reason I didn't use a toy as the example is because there's much more labor involved, and I feel that's harder to price.  Anyway, let's say the toy is priced at $5, and it costs me $4.50 to make.  That $0.50 profit will not pay for shipping to you -- the lightest toy will still cost at least $3 to ship in a first class envelope.  So, hence, I charge shipping. 

The places that don't charge shipping or boast of this "free shipping" -- a lot of them are really making good money on their items.  I used to work at Meijer, and we could look up in the computer the price actually paid by the store for an item.  I have a diamond ring from Meijer that they sold at a price of $1100.  You know what they paid?  $110.  That is a 1000% markup!  People used to flock to the jewelry counter when they'd have 70% off jewelry sales... so that ring would be $330... heck the store was still making a 300% markup even with the 70% off sale! 

The point is, the free shipping sites are the same way.  My toys range from $4-8 unless you get some specialty holiday toy that's huge or something.  Some sites have toys that start at $15 and go up.  They can offer free shipping, because if that $15 toy costs $4.50 to make, just like my $5 toy, and costs $3 to ship, they're still making $7.50 on that toy.  And of course, you're not just buying the one toy, so of course with the combined profits from the multiple items, they can ship your entire order for free. 

The rest of us are happy with our $0.50, and have to charge for shipping.

No comments:

Post a Comment