Today I’m feeling inspired to write a bit about shipping,
following yet another face-palm moment when a tea head wrote “I would’ve
ordered that cake but the shipping was too expensive.” I know a fair bit about
shipping, not just as a buyer but as an online seller. The number of packages I’ve
shipped over the past decade is in the thousands. To prove that, I suppose
I’d have to give you both my EBay handle and my Amazon handle. And then I’d
have to admit you into the online seller’s forum on EBay where I have been a
moderator for the past nine years. Now, I’m not an EBay moderator because I love
EBay. I don’t really love EBay, it is just that I’m damn good at selling there.
At one point, I was the largest EBay powerseller in the
entire southwestern quarter of the state. I started doing consignment selling
when people emailed to tell me they’d researched other sellers nearly an hour
away to sell their stuff, but no one else had the numbers I did. So I got a lot
of business from people looking to sell off their stashes of whatever they
owned and couldn’t be bothered to sell it themselves. Doing big numbers on EBay
and Amazon is a game, an ever-changing game, and shipping is a big part of the
game. In fact, shipping can make or break your numbers. Shipping is also
mind-numbingly boring, and I got so burnt out on shipping that I can’t stand
selling online anymore in the volume I once did. I still sell, mainly because
at this point it’s so easy that even when I’m working a full time job I can
still pull in a decent part time living on top of whatever else I’m doing. I
just can’t handle shipping more than one day a week. I hate it that much.
Tea heads have funny ideas about shipping, at least from my
perspective. But that isn’t anyone’s fault because you all have been trained in
those ideas from EBay and Amazon, from the game that sellers play. Buyers have
been trained to think that Free Shipping is really free. The reason for this,
is because too many sellers are selling the same items, and the profit margin
is all in the volume of selling they are doing, not the profit mark-up per
item.
So-called “penny dealers” once made a profit from selling 99
cent items plus shipping, and made their money in the shipping; EBay and Amazon
only calculated fees on the item price, not the shipping price. To combat the
penny dealers, online venues termed this as “fee avoidance,” and encouraged
buyers to report on sellers who padded shipping to avoid fees. But sellers
knock out penny dealers all the time, all you need is a buying ID and you can
report your competition for fee avoidance without retaliation. Penny dealers
nowadays are mostly Chinese sellers doing volume in low price items. Selling a
$1 item is not profitable because of the shipping cost, but if you spread that out
over tens of thousands of sales, you make a very small margin of profit. A
tough game to win and outside of China you can’t win the penny game anymore.
Likewise, Amazon trained buyers in the notion of “free”
shipping. It worked so well that now Amazon gets away with selling
subscriptions for their “Free Shipping.” Amazon created a single $3.99 price
for “regular” shipping, a system where you could make money if your item is
small enough to ship for less, or lose money if the real cost is higher. Amazon
favors itself by offering Free Shipping above a certain purchase amount, but
recently raised that amount to make you buy more, or pay for Prime Shipping. I
can tell you that Amazon has never been able to deliver a package to my door in
2 days and neither can anyone else.
For a number of years, a seller
could get ahead in shipping by comparing the cost of services. UPS versus Post
Office versus Fed Ex versus EMS, on and on. All that worked until each of the
for-profit services started contracting with the post office to deliver their packages,
a system which prevails today. My local post office receives nearly 500 Amazon
packages every Monday for my small town, these are Prime Shipping packages
which Amazon sends directly by their own trucks to post offices. UPS packages
also are delivered by post office and vice versa.
Buyers are trained in Free Shipping by online vendors in two
ways. One way is to give the impression that Free Shipping is the best deal.
Then, after seeing Free Shipping often enough, buyers now think that Free
Shipping is mandatory. The truth is, the real deal may be a combination of the
item cost and shipping cost, and Free Shipping isn’t always the best deal.
A most successful seller is the one who has a complete
monopoly on their items. If you sell unique items, things nobody else has, you
can avoid playing the shipping game entirely if people want what you have. But
in the tea world, the monopoly seller is not necessarily unusual. Plenty of tea
sellers have teas that no one else sells. The competition is in the sheer
number of tea vendors. Too many vendors have items no one else has. Rarely does
the buyer have the option to cross-check teas among several vendors, unless you’re
savvy about wholesale suppliers. But let’s assume that we do have the option to
buy the same tea from several different vendors, and the one difference is shipping
cost. It’s easy to compare when everyone offers Free Shipping, but not so when
the shipping isn’t free.
First, let’s get some perspective on what shipping actually
costs today. When I started shipping, we didn’t have the Priority Flat Rate
box. As I recall, the first Flat Rate Box (not envelope) cost $4.60. Today that
same box is $6.45. This small box might hold a 200g brick or small samples. Of
course most vendors use an envelope for small orders, and take the risk that
the tea doesn’t arrive crushed or the buyer doesn’t care the tea is crushed.
A medium flat rate box cost in the $8 range when I started
using it, but now is a whopping $13.45 base rate. The base rate is higher at
the post office nowadays because of online discounting, you can get Medium flat
rate for as low as $9.95 or maybe even lower than that if you look around.
When I sell today, I mostly sell unique items. I don’t have
another item to sell if my shipping goes south. Also, the cost of shipping for
me depends upon where the item is going. Generally, I offer Free or Flat Rate
shipping only because it saves me time and headaches. If I’m having a bad day,
I’ll eat shipping by choosing a better box because I don’t want to hear that
the item got damaged. Free Shipping allows me to choose the box size. I add in
the cost of the shipping to the final price minus fees for selling. So the
shipping looks free to the buyer, but is actually in the cost of the item. In
the case of my t-shirts, the buyer who lives one state over from me is paying
more, but the person from Europe is paying far less. Is that fair? Maybe not,
but in the end I merely break even on shipping and that’s the truth.
The Weight/Box size game.
Most sellers play a weight versus box size game. This is a
game that favors the seller over the long haul when the seller has many of the
same items to sell. It is NOT a game for the seller of unique items because you
can’t ship a new one when the buyer complains. But to some extent, tea packages
are different sizes for each sale, so buyers and sellers end up playing a
weight/box size game whether you want to or not.
Figuring out the cheapest shipping really comes down to the
actual package, the weight and size of the box. If you play the weight and box
size game, you end up shipping fragile items in too-small boxes and packages
arrive with shipping damage. As a tea buyer, you surely know all too well how
many packages you get with damaged tea items because the seller skimped on the
box and the padding. The seller is playing the shipping game using weight x box
size. He pays a lower price to make another buck or two and you get damaged goods.
Skimping on the box favors the sellers over the long run, because the few
damaged boxes requiring reshipping, refunds, or even better a coupon to make
that buyer come back costs that seller less than using a decent box plus padding
on every order.
A reasonable shipping cost for average puerh tea orders,
worldwide, is in the range of $10-20 today.
Free Shipping versus Paid Shipping
1. Choose
Free Shipping if you’re willing to risk your items arriving damaged.
2. Choose
Free Shipping if another seller has the same tea, but charges extra to ship. If
you order cheap shou or Fu bricks, you can find sellers willing to ship these
free.
3. Paid
Shipping: divide the total shipping cost by the number of items.
A tong contains 5 cakes, total shipping is
$20. Therefore the cost per cake is $4.
But shipped normally a single cake will
cost $7-10 to ship. So that $20 shipping fee for a tong is actually less than
if you bought each cake separately.
4. Take
slow boat shipping every time. Especially if you paid via Paypal. It might take
longer, but the seller will have to replace your box or refund you if your tea
doesn’t arrive.
5. EMS
is not better shipping, it is just faster. Mostly. Sellers will still skimp on
the box size and weight. Shipping cargo
is the same whether you pick slow boat or packed on a plane. The result is
ships and planes are over-stuffed and piled high, your tea is damaged or
arrives fine either way.
The 2kg weight myth.
Some buyers have found that the price of their tea box
flattens out as you approach the 2 kg weight mark. However, this is often due
to where the tea buyer lives. If you live near one of the coasts, this might be
true, but if you live in Europe or the middle of the US, that 2 kg number may
not be accurate for your mental calculations.
“The cost of the
shipping is the same as the cost of the tea.”
Well sure, if you’re buying cheap tea. Let me tell you
something. If your tea costs the same as the shipping, you might as well buy
tea from EBay or from within your own country because the quality of what you
are buying isn’t worth ordering special from overseas. I can guarantee you that
you get just as “good” crap tea from free shippers on EBay or Aliexpress, and
you might as well order from them. For decent tea, expect to pay shipping.
Premium Packaging
Nowadays we are seeing new puerh vendors design premium
boxes made of wood or cardboard drawers, along with special wrapping papers. As
a seller I’m looking to maximize my profit. Even though some packaging
materials cost less today than in the past (like tape), as a seller I dumpster
dove my boxes and bought tape in bulk. Any packaging you have to buy cuts your
profit. I see a lot of tea vendors spending money on special boxes and
wrappers, and I know they are all new at this game. Or they get their tea for
free from Aunt Minnie. Or they hope that they can win so many buyers that all
the investment in packaging will pay off. Cosmetics sales are all about
packaging, the actual cosmetic costs very little, the package sells and the
package design is what buyers pay for. Some tea vendors confuse cosmetics with
tea.
While buyers do indeed appreciate lovely packaging, those
sellers are taking a bath. Trust me. They love their brand more than making
money. Maybe they just love selling tea and don’t care about money. That’s
fine, but they won’t make a decent living using premium packaging. On top of the cost for the fancy packaging, the final cost for shipping is even higher because the carton is heavier and larger, thus losing in the weight/box size game. Most vendors using fancy packaging will go
out of business in short order.
Flat Rate Shipping
This is, all around, the best deal for tea buyers. I hear
people complaining all the time about the flat rate sellers, such as White2Tea
who charges $14.99 flat rate no matter how much or how little you buy. While
$14.99 may not be a deal if you order a single sample, a single tea cake or
more actually costs more to ship than this if you want your tea to arrive
intact, but this flat rate is usually less. Remember that Priority Medium boxes
WITHIN the states are currently $13.45, and they don’t hold tongs. They don’t
even hold more than one full size cake (decently bubble wrapped).
The Shipping Quote may not be the final price
This is true for sites like Chawangshop. When you add teas
to the cart, the calculator makes a shipping estimate. But you don’t pay your
bill from the checkout. You have to wait for Chawangshop to actually package
the tea. The final total for me is always lower than the quote. Generally, my
boxed tea orders run around $19, still within the reasonable range of $10-20.
Then I divide the number of items I ordered. If I ordered 5 items, the shipping
cost per item is under $4, quite a decent deal.
I recently bought a sleeve of 5 tuos at $4 each from Chawangshop. The shipping cost was $20. In this case, the shipping did cost the same as the tea. Now, if Chawangshop added the cost of shipping into the tuos, each would cost $9. Nine dollars for a tuo is still reasonable, when you look at the cost of a tuo from around the net. So they could choose to sell that tuo for $9 plus free shipping. I might be a buyer who is attracted to the free shipping, and I might click Buy on that $9 tuo simply because the shipping is free. But I also recognize that the $4 tuo with $5 to ship is still reasonable because I can do the math. The real clincher is nobody else has that same tuo. Unique won, but so did the shipping because anyone living closer to China got that tuo for even less than I paid.
I recently bought a sleeve of 5 tuos at $4 each from Chawangshop. The shipping cost was $20. In this case, the shipping did cost the same as the tea. Now, if Chawangshop added the cost of shipping into the tuos, each would cost $9. Nine dollars for a tuo is still reasonable, when you look at the cost of a tuo from around the net. So they could choose to sell that tuo for $9 plus free shipping. I might be a buyer who is attracted to the free shipping, and I might click Buy on that $9 tuo simply because the shipping is free. But I also recognize that the $4 tuo with $5 to ship is still reasonable because I can do the math. The real clincher is nobody else has that same tuo. Unique won, but so did the shipping because anyone living closer to China got that tuo for even less than I paid.
What to Take Away from This
Shipping favors the sellers.
Free is not necessarily the best deal.
Shipping charges per item cost less from China than shipped
from within the states.
Flat Rate is usually a deal.
$10-20 for shipping is a good range for most packages from overseas.
You can always get a refund.
If shipping cost bothers you, there’s always loose leaf.