Thursday, October 13, 2011

Why shipping isn't free

As a consumer, I love getting free shipping. As a retailer though, free shipping is no where near free. 
When I add up the costs of shipping, it can be really astounding. Let's just talk diapers. If a person buys one diaper from me, I can use a 6x9 polymailer. They are .0739 cents each. Seven cents doesn't seem too bad. These polymailers have adhesive, so I can skip the tape to close it. 

Next, I need to label my package. I can buy the self adhesive labels that average about .0359 cents each. 

To print these labels, I also will need ink for my printer. The average cost to print one page varies, but it looks like the mean is around seven cents. Printer style/brand and ink costs has such a wide range, so we needed to find an average.

Right now, my package is costing about eighteen cents to mail. Not bad. I do need to add the cost of shipping though. If I am just mailing one diaper, the cost is a minimum of $1.75 and can go up to $3.41 (I believe that's the highest if mailing first class which would be anything under 13oz.) This is for a package mailed in the US. International shipping is much more expensive. I paid $5 and change to mail one diaper to Canada. 

Since I like to make sure my customers get their orders as soon as possible, I usually mail same day instead of getting a pick up from my mailman which would delay mailing until the next day. This means I have to drive to the post office, using my gas money and cause wear and tear on my vehicle. Fortunately, the post office is about 10 minutes from my house so it's not a huge burden; however, time is money and it takes time to do this! This is not something I will calculate into the cost though. It's also difficult to estimate the cost of gas since everyone's car is different and gas prices fluctuate from corner to corner. We all know that gas isn't free though, so why should shipping be? 
With the expenses we were able to calculate, our one diaper package would cost between $1.93 and $3.59. If we were shipping more than one diaper, and it was over 13 oz. the price jumps exponentially. The best way to mail larger packages, is to try to fit them into a Flat Rate Box (FRB) or Envelope (FRE.) Sometimes, you can select Parcel Post when mailing USPS and it will be cheaper than the Flat Rate. The FRE is $4.75 and you can stuff that baby as full as you want as long as the little flap will close. You might have to use extra tape though, and that will cost you more. 
If I'm mailing anything that could break or leak, I will need to add expenses to make sure that doesn't happen-bubble wrap, plastic bags, separate packaging, etc. It all adds up. 

So the next time you are looking for free shipping, think about all these costs. Someone has to pay for them. 

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