What would you do?

[brian.mc]

to even say that they charge for someone to walk the parcels to the post office. (i do that everyday but i dont charge my customers for that priviledge)

Why not?
Say you employed someone, on minimum wage (£5.35 per hour, but with National Insurance etc effectively £6 + per hour), and you sent them to the post office with the package. Let's say they were very lucky, and didn't have to queue for ages when they got there, chances are that it would take at least 15 minutes - cost to you £1.50. Don't you think that should be costed into your pricing?

IMO postage & packing should cover packaging materials, time taken to wrap, actual postage costs and time spent taking the parcel to the post office.

You should also factor in an allowance to cover the postage costs on goods returned, as this will also affect your bottom line.

[fleetwood]

Brian

Overheads and post and packing costs are two seperate issues.

To process an order and send a parcel involves a number of variable costs - including credit card processing fee, invoice printing, packaging materials and postage.
It is reasonable, and sensible business practice to factor these into a processing/ post and packaging cost, as they are primarily PER PARCEL/ORDER costs.

Business overheads - HLP, rent and rates, LABOUR etc - are fixed costs, which are incurred whether you take 1,000 orders per day, or none at all.
Such costs should be factored into a profit model, and used to establish the price of goods, not the cost of mailing them out - a totally seperate issue. Labour charges obviously will increase with order volume, but not to the extent that they can be calculated on a parcel by parcel basis.

Post and packing / processing fee - whatever you want to call it - should be an appropriate charge for covering the cost of shipping the goods.

If any small business employs someone specifically to walk to the post office and back, I'd love them to speak up.
The labour cost is there regardless of whether a trip is needed or not.

Trying to justify building that cost into a post and packing fee is as unreasonable as claiming rent and rates is part of that charge too (after all - if there wasn't a building to trade from, we couldn't send your parcel, so 1% of the packaging cost is for rent and rates).

Any businesses must account for its costs.
They also need to understand the difference between overheads and variable costs.

At the end of the day, my complaint was not that I was being charged more than the cost of postage - my own business factors in variable cost into the packing charge - but that the charge was totally disproportionate - £6.95 comprising £1.95 postage, £5 miscellaneous other charges is very poor.
Let the buyer beware - OK.
Piss the buyer off with a stupid explanation - not wise.

For the record, the trader has a 93% amazon satisfaction rating.
The 7% downers, are nearly all complaints about postage.
If it was my business, I'd be taking some notice!

[RuralWeb]

IMO postage & packing should cover packaging materials, time taken to wrap, actual postage costs and time spent taking the parcel to the post office.

This is the view I take as well - you may want to call it a handling charge which can be accounted for separately within Actinic but it all adds up to the same

[jont]

Trying to justify building that cost into a post and packing fee is as unreasonable

I was going to say this is common practice with Ebayers and then saw they are on Amazon. Attract with low prices and whack it back on at the end.

It is a fact people would rather pay £10.00 with free delivery than £8.00 with £2.00 (or any combination thereof).

If the purchaser wants a refund they have to reimburse the full amount - which will grate. People rarely return to such sellers who charge "admin" on delivery so as to bump their profit margins.

[brian.mc]

Martin,

I agree with you up to a point, and would agree that if your business is mainly internet/mail order, with all or most orders being posted, then some of the costs mentioned in my post could be factored into the retail price, rather than postage, but I am looking at it from a B&M Store point of view, where the retail price of the goods is calculated on the costs and overheads involved, for customers purchasing goods and taking them away.

When the customer wishes the purchases delivered, by whatever method, then any additional costs involved in delivering the goods should be calculated separately and charged as delivery/postage/packaging/handling. In that case, the labour costs involved in delivering the goods to the post office are a relevant factor.

Considering that there is a likelihood that there will soon be far fewer post offices, it's possible that the journey to the post office will be further and take longer, so it will be even more important to factor the extra costs in.

[Tickle]

I recently had a similar experience from the vendor side.

We decided to set a fixed price P&P of £3.95 and free delivery over £35 rather than a weight based approach for simplicity and to make it easy for customers to see postage upfront. Virtually all our competitors charge £1 - £2 more.

The problem we faced is that we sell lots of different products which vary in weight considerably. We calculated a P&P rate that represented a slightly subsidised cost on an average order in terms of Royal Mail postal weight cost plus the cost of packaging.

So a recent customer complained after they received their order for a £2.00 item that had a 48p Smartstamp (it was very lightweight).

When I spoke to them they weren't complaining that the postage was too high, it was the fact that the stamp had 48p displayed. They accepted that if the stamp had no value then there would have been no complaint.

Initially it seems that the only fair model seems to be weight based but that makes it hard for customers to see what they're paying until checkout and would penalise many of our customers.

Another P&P cost I bet no-one factors in is the cost of lost deliveries with RM.

Can't wait until we qualify for PPI.

[fleetwood]

PPI is a godsend.

They collect (at a cost of £1 a day - get factoring ), so no trips to the PO, the prices are cheaper, and the label dosen't display the cost!

Let me share a little trade tip - if you are anywhere near the PPI join limit of 5,000 parcels, then blag it, and tell them you will do the 5,000 pa.

So long as your not miles out, then chances are that when they review your account after a year, they will just let you continue.

They seem to be happy so long as you spend £5,000 pa, so don't worry too much if you can't get to 5,000 parcels.

RM are quite desperate for the business, so its always worth a go (just don't tell them I said so )

[Stereo Steve]

I'll second that. When we started we were doing about 1000 a year so I just told a fib. There was a massive benefit in terms of efficiency which enabled us to push forward very quickly and we are now doing many, many thousands a year.

Sometimes you have to put your business first. Dog eat dog.

[Darren B]

Martin

What happened to this story in the end

Darren

[fleetwood]

I returned the goods a week or so ago, claiming refund but no return costs, but have not yet received a reply or refund of any kind.
I'll chase them up after the weekend.

[Darren B]

worse case is issue a charge back i suppose. Are they going to fight for the sake of a few quid. its a bit of a mine field though. As business man you can see both sides

Darren