As well as the cost of materials and other business expenses, postage charges are a cost I need to consider when setting the price of items. These must be worked into my pricing structure.
If I charge shipping for items in my shop then Etsy charges a shipping transaction fee at 5% on the cost of shipping; as well as the 5% transaction fee on the item price. Basically I will be charged 5% on the total amount charged to the purchaser, whether I choose to charge separate fees for shipping or not.
Etsy advises that ‘Your postage prices may be key to turning those interested shoppers into customers.’ Shoppers like to know what they need to pay for items up-front, on Etsy shoppers are 20% more likely to complete their purchase when the item is shown with free delivery. This means it would be advantageous to include this in the price, rather than charging additional fees for postage. Of course this would need to be limited to UK postage as international postage costs could be much higher. I also need to consider if free delivery would only apply after a minimum order amount, because for smaller items including delivery costs may make the unit price seem too expensive. I will also need to be clear about postage costs for returned items and delivery timescales.
I will need to take into account the packaging of my items – how much it costs and weighs. I want it to look professional and be fit for purpose but without unnecessarily increasing costs
Calculating my item’s weight and dimensions will be the first step in calculating the cost of postage. I have access to a digital sale so that I can do this. The type of packaging will vary by item but for the toys and hair/make up accessories a padded envelope should suffice. These can be bought cheaper in bulk which I would consider later but not as an initial outlay. I also have access to a number of these that I can re-use which fits in with my overall philosophy.
Royal Mail offers a number of methods for sending letters and packages. They all have some level of compensation coverage included. As I can measure the package myself I will be able to print postage labels online, which is cheaper than going to the post office. This can also be done without extra charge through Etsy and the cost of each purchased postage label would appear separately in my account which would be useful to help me keep track of my costs.
For sending items within the UK, the possible options I intend to use are:
- No signature required: 1st or 2nd class
- Signature required: Royal Mail Signed For 1st Classor Royal Mail Signed For 2nd Class
I can check postage costs at https://www.royalmail.com/price-finder.
For the toys, which would be selling at over £20.00 I would need to use signed for in order to cover compensation costs and the maximum current fee for second class, based on items already made, would be £3.95.
For the scrunchies etc postage would reduce to as little as 88p depending on how many items were selected and if I did not think a signature necessary.