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I’m just branching out into selling by mail order
from my website – how do I deal with postage and
packing charges?
The simplest way is just to make everything ‘free
delivery’ and include a delivery element in your
item prices. Free delivery is always nice for a
customer to see, but it may make your prices seem
higher than a competitor who charges delivery as
a separate item – and it might not make sense if
you’re sending a lot of heavy items overseas.
If you do choose to charge for delivery then you
need to decide on what basis to charge. The options
include flat rate, by basket weight, by number of
items, by order value or by individual item. We’ll
examine each option in turn:
1By flat rate The simplest way, for both you
and your customers. This is probably most
suited to businesses with consistent order sizes.
The downside can be that with a small order your
customer is paying over the odds and with a large
order you may be charging less than cost.
By basket weight You need to know the
2 weight of all your items and you can then
automatically total the weight of the basket and
calculate postage from there. It should be easy to
update when postage rates change or when stock
items change.
By number of items This is a very
3 straightforward method for calculating and
is predictable for the customer. If, however, your
range of items varies markedly in either bulk or
weight you’ll find this method does not always
accurately reflect real costs.
By order value Another simple and predictable
4 method, very transparent for the customer but a
hostage to cheap, heavy items.
By individual item The most complicated
5 option and the most time consuming to update,
but this is the surest way of avoiding both over and
under charging for carriage.
Don’t forget that delivery charges need to cover
the packaging materials and the time taken to pack
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Q&A Technology
Beth Scott from Loud-n-Clear.com answers your questions on getting the product to
the customer and if the technology available can help
and post, as well as the postage or courier charges
– make sure that your chosen e-commerce solution
supports the postage option that suits you best.
There are also a few other things to consider:
Do you want to offer free postage over a certain
1 value? This can encourage extra sales.
Are you going to offer an express or next day
2 service? People are often willing to pay more in
order to get the item sooner.
If you’re selling overseas then you need to work
3 out different postage rates for different places
and airmail or surface mail. Goods sent outside the
EU will usually need a customs form (CN22).
Is it worth offering a gift service, with gift-
4 wrapping and a card with a message? This
can generate extra sales but you’ll need to check
your bank credit card processing agreement about
despatching orders to addresses different from the
card holder.
Are you using the Royal Mail or a courier?
5 With a courier there may be significant
surcharges for rural and island addresses.
Are you VAT registered? If so, there should be
6 VAT on your delivery charge as well. As always,
check the exact position regarding VAT with either
HMRC or your accountant.
It’s a good idea to keep a record of actual postage
costs and then check them periodically against
the postage you have charged, to ensure that your
charges are sufficient to cover the real costs.
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I don’t want to visit the post office every day – can
I avoid it?
Yes. How best to avoid it depends on the size
and number of items you are selling. The simplest
option for a seller who uses PayPal is PayPal’s own
online postage centre. This lets you create, pay
for and print postage labels for any sales through
PayPal. In addition, it is able to generate pre-filled
customs forms, packing slips and even proof of
posting certificates.
Once you have printed the label and attached
it to your item you can put it in a post box, drop
it off at the post office or if it is a parcel, book
a Parcelforce collection through PayPal. The
main downside of this system is that if you want
compensation for lost items then you still need a
certificate of posting, so you may feel that you can’t
avoid going to the post office anyway.
The next option is Royal Mail’s own
SmartStamp which is a similar offering to Paypal’s
– here you pay a small monthly subscription and
then pay for and print your own labels online.
Again, you need to post an item by the next day
after printing the label. You have the full range of
Royal Mail services available through SmartStamp
and these include, for a fee, getting your mail
collected at a pre-arranged time.
For occasional posting of heavy items you can
either use a courier directly or take advantage of
a service such as Parcel2Go or Interparcel, who
can provide very competitive quotes from a range
of couriers. They do this by aggregating a huge
number of individual orders and negotiating a bulk
discount, so if you only use a courier occasionally
it may be much cheaper using one of these services
than dealing with the courier yourself. The problem
here is that if anything goes wrong the courier’s
contract is with the intermediary, and any claim
has to be made by them and you then need to
claim from them.
If you are regularly sending large numbers of
items or lots of heavy items it will probably be
worthwhile having an account either with the
Royal Mail or with a courier. With an account
you should expect to have an agreed rate, a regular
collection slot and an account manager to liaise
with in the event of any problems. �
Further information
Beth welcomes readers’ questions for future
issues. Please visit www.loud-n-clear.com to
find out more about the numerous services
available.