Hall of Shame #5, S&H

How many times have you shopped online only to abandon your shopping cart when you see the shipping and handling charge?  I do it all the time.

When I talk to the packaging industry about changing packaging to improve postage rates, a common response I hear is, “That’s okay, the customer pays for it in shipping and handling?”  Wrong.  Here is why.

If I buy a small part like a data card for $45, I am charged $7.99 for shipping and handling.  Let’s do the math:
$0.30 for the box
$0.05 for the peanuts
$0.10 to print and apply the label
$5 for UPS shipping
Total packaging and postage is $5.45.
$7.99 – $5.45 = $2.54 profit.  Not bad.

Light box. What could it be?

Here is my data card, looking cozy on a bed of peanuts.

Now let’s make some smarter packaging choices.  Data cards are flat.  There is nothing to crush, and they are unlikely to be damaged.  If the data card were shipped in a flat paperboard mailer, the package would likely qualify as a first-class USPS flat.

Again, the math:
$0.25 for a paperboard mailer
no fill material
$0.10 to print and apply the label
$1.39 to mail a first-class flat by USPS
Total packaging and postage is $1.74
$7.99 – $1.74 = $6.25 profit.  Much better.

Better still, slash your shipping and handling, pass the savings on to your customers, and watch as your customers abandon shopping carts less frequently.

by Bob Makofsky bmakofsky@conformer.com

About Bob Makofsky

Bob runs operations and marketing and is Conformer’s resident postal expert. Bob has over a dozen years of entrepreneurial experience in the technology industry, in both marketing and business development roles ranging from negotiating $100 million-plus contracts nationally and abroad to developing marketing campaigns. He is regularly featured in print and packaging trade magazines on innovation. Bob is a competitive cyclist and longtime member of the Century Road Club Association in Central Park, competing in the Empire State Games (2007, 2008). Bob graduated from the University of Denver.
This entry was posted in Hall of Shame and tagged , , , . Bookmark the permalink.

0 Responses to Hall of Shame #5, S&H

Leave a Reply

Your email address will not be published. Required fields are marked *