One of the more common questions we are asked is, "why do I need to pay $4.00 in shipping for a $0.55 stamp?" This is a great question, unfortunately, the answer is not as straightforward as the question itself. In my opinion, creating and justifying the shipping cost for a product or products is one of the more challenging customer service obstacles for a business to overcome.
Before explaining our shipping costs, let me say this; there is no right or wrong answer on this topic, only what seems to work best for a business and their customers. For instance, an online retail store that is similar to ours might have a different shipping policy and fees associated with orders. Although similar, each business is unique and as such, the operational needs and costs associated with them are different. In short, what works well for one business might not for another.
Shipping Cost Explained
Our preferred means of order delivery is the United States Postal Service (USPS). When you factor in shipping supplies (envelope, tape, labels, ect) along with the actual postal service delivery charge, the cost of shipping just one order far exceeds the cost of a stamp. Also, when we send a customer their order it ships with a USPS tracking number, which is something you do not get with a stamp.
As a small business, it is not in our best interest to absorb the full cost of shipping each order, especially over the course of a year. This year alone we estimate the cost associated with shipping will be in the neighborhood of about $8,000.
This left us with two options.
Free shipping worked out great for our customers who ordered just one product because the additional cost was still cheaper than a shipping charge. The customers who ordered two products seemed to break even, and the customers who ordered three or more items were spending more money on the additional product cost than our current $4.00 flat rate shipping charge (good for us, bad for the customer). Upon further investigation, we noticed the vast majority of our orders contain three or more products, especially as our business and product line continues to grow.
On larger orders, the $4.00 flat rate shipping charge does not always cover everything, and we pay the difference. We entertained the thought of charging customers based on ordered weight, but even that was not always accurate. Lastly, we looked at raising the shipping cost to $7.00 on all orders to cover shipping overages, but that would hurt customers who had smaller orders. In the grand scope of things, orders, where we paid the overage, is minuscule compared to all orders received, therefore it did not justify the additional charge across the board.
Ultimately we found a middle ground and did what we felt was best for our customers and Bourn Adventure Gear regarding product pricing and shipping. Although it is now more expensive to ship products via most carries, to include the United States Postal Service, we have not raised our shipping price. We currently absorb the newly raised prices and hope to continue to do so that way our customers do not have to.
This is somewhat of a lengthy explanation, but we hope it helps. Typically, this is not explained to people and sometimes leaves customers under the impression that shipping charges are just another way for businesses to make more money.
We like to be open and honest about why we do what we do as a company, which is why we go a little more into depth with customers regarding this and other topics.
Thank you for reading this article. We hope you found it entertaining. If so, please share it with others and don't forget to leave a comment down below!
We don't just design adventure based products, we live them!
-Bourn Adventure Gear
Baker and Ashlie are the owners of Bourn Adventure and Bourn Adventure Gear. They enjoy traveling and meeting new people. Each of them has a different and unique background, which helps to shape their articles.