Ship, Ship, Hooray!
We’ve been on a voyage of discovery when it comes to shipping
Join us as we reflect on this journey, and enjoy some nautical puns along the way!
A start-up business faces lots of operational questions, each one seemingly to have lots of possible answers. Things like, which suppliers to go with, what equipment to invest in, or how to approach things like marketing. Whichever direction you eventually choose, there’s always a financial implication to account for.
Of all the operational questions we navigated during the planning of our business, we’ve been on a voyage of discovery when it comes to shipping. The method of shipping was never an issue; we’re committed to using Royal Mail, and have chosen a fantastic local supplier for all of our packaging needs. But it was our approach to shipping costs that presented the choppiest waters. Perhaps this was simply because these costs have the most direct impact on profit margins, but for us there were also some ethical questions along the way.
Is it good practise to add shipping into the price?
It’s not an uncommon approach for businesses to include the cost of shipping of their goods in the price of their products. In some cases the shipping cost is communicated to the customer, but it may be that ‘free shipping’ is advertised to the customer. Undoubtedly, there are some types of products on which shipping costs can be fairly calculated and applied. In the context of an online store selling greetings cards, we believe this approach would be unfair to customers, and particularly those ordering multiple products.
We think it best to be completely transparent on the cost of the product and have shipping calculated at checkout.
Calculating at checkout
With the help of a good e-commerce platform it’s possible to achieve a fair system for working out shipping costs, based on weight, and added automatically at checkout. We have a great e-commerce platform, and after the cost of sending every gram of our cards via Royal Mail had been diligently tapped in to the system, we found that this ensured every customer, whether ordering one card or several cards, would be charged the correct cost of shipping. Problem solved! Right? Erm, maybe not…
This is where our first ethical dilemma arose. While this approach allowed us to be transparent with our customers about the cost of the cards themselves, and ensure fair calculation of the actual shipping costs associated with each order, we still found ourselves asking questions. Are we comfortable with customers discovering a further cost at the checkout? Is it fair to charge a shipping cost when the customer has no choice but to purchase online?
Throughout our first couple of months of trading we experimented with possible ways to resolve these moral dilemmas. First, we introduced an offer of free shipping on all orders over £10. This was certainly beneficial to us, as it encouraged larger orders. However, as we started receiving orders, we realised how much we appreciate every customer, regardless of how many cards they order. This sort of offer didn’t reflect that sense of appreciation.
We then decided to halve the shipping costs entered into our e-commerce platform, essentially meaning the customer paid 50% of the actual cost of shipping, while we covered the rest. We quite liked this idea of sharing the cost of shipping equally with our customers, and think it would be great if this were a more common approach adopted by companies. This move definitely helped us feel more comfortable about charging a shipping cost, but it didn’t quite deal with the fact that an unexpected additional cost was still being added at the checkout stage.
“With the help of a good e-commerce platform it’s possible to achieve a fair system for working out shipping costs, based on weight, and added automatically at checkout.”
Process of elimination
So, if you don’t want to incorporate the cost of shipping into prices, and even the fairest of e-commerce platforms can’t offer a complete solution to your moral dilemmas, what are you left with? Well, free shipping of course!
There is an obvious benefit of free shipping to the customer. The obvious drawback to us is that the cost of shipping directly impacts our profit margin. Many businesses can’t - or in some cases won’t - entertain the idea of taking a hit on profit margins. However, for us there are some crucial, less tangible benefits to offering free delivery to our customers. Offering free delivery protects the transparency of our pricing and ensures our cards remain as accessible as possible to our customers. We believe this is fair, places the customer first and demonstrates our appreciation for every single order received.
Ship, ship, hooray!
Throughout the planning stage, and during the first few months of trading, the question of shipping costs has bubbled up and resurfaced several times. Having gone through stages of charging for delivery at checkout, offering free delivery on larger orders, before introducing the concept of sharing the cost of shipping with the customer, we’ve finally arrived at our final destination on this voyage. We know other businesses will be comfortable docking at earlier ports offering different models, but we’ve ventured on into calmer waters, where shipping is free. We anticipate this might cause a few financial headaches for us, but it’s a perfect solution for a business that places ethics at the heart of everything it does.
We’re pleased to say that Quinn & Quill London now offers free UK delivery at all times, and on all orders, with the intention of keeping it like that forever!