The cost of business

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I woke yesterday to the bleak news that we are to suffer another rise in the cost of post.

As an online retailer we only use the Royal Mail  service. We are a small, family run business, too small to enjoy the economies of scale offered by couriers, whose prices are competitive.

At the same time we are continually bombarded with the argument that Amazon, among others provides free postage – so how does one compete?

Do we sit back and justify to our customers why our minimum charge for post is £4.45, or do we encourage them to spend more so that they, themselves, can benefit from the financial common sense that multiple purchases do genuinely bring the overall cost of the postage down?

Many times I have pondered explaining our postage charges on this blog but do fear coming across as some whining child who any minute will crumble into a “yeah, but, no, but, yeah, cos like Amazon, like, are just, like ……… well cheap” or would it make people realise that the charge is not a rip off – it’s that bigger businesses can afford to swallow that cost elsewhere?

Everything we send out is trackable so you can’t order from us on a non-recorded basis, otherwise where is our proof that a parcel has ever reached a client? It potentially compromises both parties and is a route I don’t wish to pursue.

So I find myself in the uncomfortable position of saying, go on then, see for yourself.

Let’s say we send you a mug.

The actual postage charge is £2.93 currently. The box to post it in is £0.61p. That’s £3.54, to which we add a percentage for bubble wrap, parcel tape, a returns label, the delivery note, the time spent wrapping the order, the time spent taking it to the Post Office and the fuel used to get to the Post Office.

Our two main competitors will charge you a minimum P&P of £4.95 for the same mug. Others even more.

I was slightly angered over the weekend when someone tweeted to @Maryportas and @LibertyLondon that they liked her kinky knickers but that £5.95 for postage was ridiculous. It really isn’t. It’s realistic.

The Channel Island tax loophole, recently closed by George Osborne, might have a knock-on effect to some major online retailing giants. I suspect that they have been able to offer free post because they have been able to take advantage of the loophole to date and to offer free post as a result.

So who knows, we might see them now start charging us for post – and I would welcome it, not because I’m a sourpuss, but because not charging creates a false sense of reality. Fair enough hoik your product prices and then offer free post – that I can see, but low product prices coupled with free post creates a future date with bankruptcy, for sure.

 

 

 

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