Read on to see how Royal Mail’s announcement can help you entice more buyers…
This week Royal Mail announced something quite shocking. They have actually lowered their price for a small parcel – now that’s something I never thought I’d see! But it’s true, although it’s not a permanent decrease; it’s just for the Christmas period. Something is better than nothing though so we mustn’t complain!
So what’s it all about? Well, from October 20th right through to January 18th the size of a small parcel will effectively double to 2kg but the cost will remain at £2.80. A package this size would have previously been classed as ‘medium’ and would have cost you £8.00 so that’s a saving of a whopping £5.20.
You can read the full details on The Source Report Blog here
So, talking about postage and delivery costs, on to a subject that always seems to cause some indecision for sellers. There is something about the word ‘free’ that we are very attracted to.
In the supermarket earlier this week, after fighting my way through the piles of Christmas stock that has started springing up everywhere, I was then accosted by a plethora of ‘Buy One Get One Free’ deals. They were in my face every time I rounded a corner – it’s no wonder we end up buying things that we don’t actually want or need. How many times have you left the supermarket with two huge packets of something that you know you’ll never eat before the best before date even if you have a family of 10, and that invariably will end up in the bin? But it was free – that’s why you can’t resist.
Promises of free samples lure us into shops where we end up either signing up for something we don’t want or spending more than we intended and the promise of free calls and texts lure us into changing telephone providers, signing ridiculous contracts that last for 20 years and generally wishing we were able to ignore that simple four letter word when it comes to being drawn in to things.
But look, ‘free’ is an extremely powerful word and so the question is this. Can you take advantage of the mindset towards this by offering free postage on your listings? Could this make the difference between your buyers purchasing products from you or from one of your rivals?
It’s not a simple case of yes or no though. For a start it’s important not to forget the costs actually involved in the shipping of your items to your customers. Not only do you need to pay for materials to pack orders in appropriately and the postage itself, but you must also consider the time that it takes you to do the packing and even the time it takes to make your trip to the post office. Time is, as they say, money and the longer you spend posting and packing and not making any money from it, the less time you have to source new products and create new listings.
Looking at your costs, you may think that it is impossible to offer free postage on your items without eating in to your profits, but the benefits of free delivery can’t be denied.
Better search placements?
As I have already mentioned, the word ‘free’ itself can be a massive selling point that will easily attract the attention of prospective buyers. In fact, you may find that some people are prepared to pay more for your products than from a different seller, just because of the lure of something free. So, firstly it is worth considering marking your product prices up by an extra pound or two to allow you to cover the cost of postage within. After all, we all know that really, ‘free’ stuff is actually ‘paid for’ somewhere along the line it’s just that our brains don’t look at it like that!
There are other advantages to be found by offering free postage on your products too. Free postage does get some priority in the search results so if you compare two listings for the same item and one is listed as £12.99 + £2.99 P&P and the other is listed as £14.99 + Free P&P, the one with the free postage will often appear above the other one.
Now I know that this benefit alone might not be enough of a reason to potentially have to reduce your profit per sale by providing free postage, but it could certainly help you to be more successful as your quantity of sales is likely to rise. So although you might make a pound less on each item, you should sell more.
Use your common sense
Don’t take this to extremes though! Don’t offer free postage, or simply postage that is too low to cover your actual costs as you don’t want to make a loss on an item. You need to be particularly careful if your items are bulky, heavy, odd shapes or if you need to use a larger courier service for delivery rather than Royal Mail or My Hermes.
Just to clarify – free postage is an excellent idea and you should offer it if you want the opportunity to move up the searches, but it can cost you a little bit of profit. Free postage will potentially increase your sales but lower your profit per item. So this is why you get those moments of indecision. Free postage is a bit of a mixed bag it seems!
The most important thing to remember is simply to keep common sense in mind when planning your postage strategy. You may be able to easily afford to offer the compulsory free postage on a small, light item like a CD or DVD, but not on larger items. Don’t post products for free if it will cost you money, because the benefits are just not worth it, but if you can afford it amidst your profit margin then do!
Keeping your postage costs down is one definitive method that will help you to offer free, or at least cheap, postage. So I thought I would take you through my quick five step strategy to lower your postage costs.
Step one – Know your delivery charges
Don’t just guess! If you know how much it will actually cost you to post a certain item then you will have a better idea as to whether you can offer free postage. Keep a set of scales beside your computer and physically weigh your items at home before you take them to the post office. You can then cross check this value with the Royal Mail website, or any other courier that you may choose to use, to ascertain the real costs. It’s easy to get online quotes for delivery, so use it.
Step two – Recycle postage materials
Some packing materials can certainly be used more than once but please don’t send goods out in scruffy envelopes with old addresses scribbled out, or in carrier bags, bin liners and so on – it’s just not professional. You may be able to reuse some of the internal materials that the items were posted to you in, but make sure they are presentable. If you don’t have any materials to recycle then look to source boxes, jiffy bags, envelopes and bubble wrap more cheaply by either buying in bulk or searching for deals online.
Step three – Combine items into one parcel
If you sell a range of different products in the same niche area, you can offer your buyers a reduced postage cost if they order more items from you. This is a great trick as it hooks buyers in to purchasing more than one item and as you can place items in the same box or envelope, this will cut your costs. This is where you can really take advantage of Royal Mail’s special 2kg deal! You can set up postage discounts to calculate automatically when a buyer purchases more than one item so there is no work or maths involved.
Step four – Set a regular time for the post office run
It might be tempting to take a trip to the post office the minute you make a sale, but by combining all of your sales into regular post office runs you will save on fuel and on the time that it takes to get there, queue up and get your items weighed and shipped. If you have lots of sales then you can make a daily trip either in the morning or evening. Or you could choose to go every other day. If you are working full time and your online business is part-time then set aside a Saturday morning to take everything. If you do this though, make sure you state that you only post once a week on your listings so that buyers know when to expect their orders.
Step five – Don’t compromise on quality
Although it might be tempting to package goods to an inferior level of quality to save money you must always ensure that your items will get to the buyer safely. This is particularly important when posting anything breakable or squashable, but you should take care when packing all products as buyers love to receive nicely wrapped things and it all helps towards your positive feedback.
So, by lowering your postage expenses and carefully considering how much it will cost you to send each item, you may be able to afford to offer free postage on your listings. This is definitely worth considering because remember, ‘FREE’ is a very viable and powerful method of attracting much needed attention to your listings and increasing your sales.
Right now though, even if you can’t afford to offer ‘free’ you should certainly see a saving on any 2kg parcels you send via Royal Mail, so take advantage!
As always I wish you the best of success,
