While shipping can be a tricky part of selling handmade goods online, it’s a critical business skill to master. Savvy shipping strategies will not only help ensure your products arrive safely; they’ll keep you from losing money on unexpected costs, especially when shipping internationally. Today’s lesson will take you through the fundamental steps of covering your shipping costs, and provide you with helpful tips for shipping via Australia Post.
- Account for shipping and handling within your business plan.
Whether you charge for shipping separately or include it in with your product cost, it’s important to avoid shortchanging yourself on the shipping. While covering postage costs might be okay for the occasional sale, it will severely cut into your profit margin when your volume increases.
I prefer to always list my shipping charges separately, but if you plan to offer free shipping as a part of your marketing efforts, be sure to factor shipping costs into your product prices to cover the loss. For more tips on tracking expenses and pricing your products, read How to Price Like a Pro.
- Factor your packaging into your overall postage costs.
From bubble wrap to cardboard boxes, packaging materials can add up quickly. Your final shipping cost should incorporate not only your postage cost, but the price of your packaging materials, too. I add approximately an extra dollar per sale to my shipping cost to do that. Again, you might choose to just increase the cost of your product slightly to account for it.
- If you undercharge for shipping, be ready to take responsibility.
When you’re learning the basics of shipping products of varying shapes and sizes to different locations, a learning curve is inevitable. If you do undercharge a customer for shipping, be prepared to cover that extra cost yourself. I’ve made this mistake before, and so have most online sellers at one time or another. Odds are you’ll only undercharge once in a big way before becoming more diligent in your shipping research.
- Research your options ahead of time.
It’s worth the effort to calculate common postage costs early on, so you don’t lose money through erroneous rates later on. We’ve all been there; I remember a parcel I sent when I just started out, which I thought would be $2, but ended up costing $10. As it turned out, my initial estimate was right, but when the post office suggested a different rate I went along with them because I didn’t know any better. Take the time to research your options ahead of time, and you’ll avoid costly headaches down the road.
Making the Most of Australia Post
- Make friends with the staff at your local post office! They will be invaluable allies as you grow your business. Next time you go in, ask them for the latest pricing guidelines booklet. You can also download all of the up-to-date postal guides on the AusPost website.
- If you’re shipping internationally, download the International Post Charges Guide for a breakdown of postage prices by zone and country. It’s a bit of a tedious read, but it means that every time you add a new product, you’ll have the shipping costs handy and ready to reference.
- Once you start shipping regularly, open a Business Account with AusPost. A few of the benefits include:
- No more waiting in line; you get a book of postage forms to fill in, so each time you ship, you just fill one of these in at home, then drop off your parcels along with the form without having to wait in line.
- You pay your bill once a month. That means that your money is in your account longer, and record keeping and accounting becomes way easier — just having one postage bill a month rather than lots of little receipts to worry about.
- If you’re sending 20 parcels or more a week, consider signing up for a high-volume parcel contract here. Also check out the eParcel and Click & Send options.
- Understand the difference between a “Large Letter” and a “Parcel”. AusPost currently defines the maximum dimensions for a large letter as 260 x 360 x 20 mm. The key measurement is the 20 mm, or 2 cm height. Once you’ve made friends with your local post office staff, ask them for a letter gauge. It allows you to check your parcels at home to see if they fit through what some people call “the slot of doom”. If your parcel fits, you can send it as a large letter — both domestically and internationally — and that makes your postage much cheaper than sending it as a parcel.
If you have any questions or any tips of your own, make sure to pop over and share them in the Facebook group.
Homework: Work out the postage cost on at least three different items — both domestic and international.