Postage And Packaging
Postage and packaging is one of those funny issues that you don’t really have to grapple with until you have to do it yourself – but as a creative product business, receiving an item is probably the first experience a customer will have with you and your products, so ensuring that the delivery experience is good and that you make a good first impression, is almost as important as the product itself.
In episode 27 of The Resilient Retail Game Plan, I want to break down the nuts and bolts of P&P so that you can streamline the process of getting your items out to your customers and avoid the pitfalls of material costs and abandoned online shopping carts.
We’ll start by looking at packaging and the importance of the unboxing experience, as well as how to test the safety and security of your packaging options and how to ensure those materials aren’t undercutting your profits – and we’ll look at how to underpromise and overdeliver on postage, where we can use statistics like average order values to help set smart postage limits to encourage people to move all the way through the checkout experience and make that all-important purchase.
No time to listen? Read the episode in this blog post below!
Maybe it’s because I’m a giant retail nerd, who knows, but I find postage and packaging FASCINATING! This is a ‘nuts and bolts’ topic but one that’s critical to your customers experience. SO this may be a bit shorter than my regular posts and podcast but I think one well worth reading or listening to.
It’s really shifted over the last few years – maybe three or four years ago I would have said to you that the unboxing experience that your customer is going to have, how they’re going to feel, what’s it going to look like was the priority. Whereas now, I think the customer still wants a nice experience but the perception of packaging has shifted and now people will contact you to complain about access packaging or packaging that can’t be recycled.
Growing conscious consumerism and people being really clear and passionate about reducing waste has shifting retailers decisions around packaging when posting products.
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First and foremost, and I know this sounds obvious, but your packaging’s job is to make sure that the product gets to your customer in perfect condition. The best way to test this is post items to yourself! If you’re packing items yourself – making sure there’s no movement! If your products are packaged carefully and tightly then they will break in transit.
Think carefully about the kind of packaging materials that you’re going to use. How are you going to make sure that they are keeping your product safe and minimising the risk of breakages?
How long does each postal order take you to package up? After you’ve wrapped it in tissue paper, put twine around it and a sticker on, then you put it inside a bag maybe with a handwritten note and then you put that in an envelope – make sure that you do cost that time in, as well as the cost of packaging.
Cost it up
It’s so important that you make sure you cost up exactly how much you’re spending on any packaging – I cannot tell you the number of times I’ve spoken to people who have custom printed tissue paper produced or really fancy boxes with magnetic closures and then they’ve sat down to work out why they’re not making much profit, they realise it’s because their packaging is hugely expensive.
So think about ways that you can create a decent experience for your customers and yet not be spending a huge amount of time and a huge amount of money on packaging. Don’t forget to pop a business card inside or some information about your business, include your social media hashtag. You can also incentivise – encourage a review on your website with a discount on their next order.
Obviously, as your business grows and your orders increase the time spent on packing orders becomes a larger part of your daily business activity – you’ll have less time, you may need to outsource – all things to review regularly.
In the last 12 months distance gifting, you’ve probably heard me talk about this before, has been a huge driver of sales for lots of small businesses. People are away from the ones that they love and they want to be able to send them items to let them know that they’re thinking about them.
So make it really clear that customers can send a gift to somebody – make sure you tell your customers you can dispatch to another address and that you’ve built their confidence with your packaging -products wrapped in tissue with a nice sticker and a handwritten note, for example, is perfect for most people when they want to send a gift, they just want to know it’s not going to turn up in a polybag rattling around a tatty cardboard box!
Remember – you can have multiple concepts for packaging and you can charge for it. Don’t feel like you have to offer a beautiful gift option and not charge for it – those customers that want to send an extra special gift will pay for more expensive packaging or gift wrapping.
I’m not going to go into the detail of postage now but I do want to flag a few keys things. Firstly that free postage generally leads to better conversion rates. It’s why if you’re on Etsy or Not On The High Street, they do really try and push you towards offering free postage. The number one reason for an abandoned cart is because of an unexpected postage charge, or postage being too high. People would rather spend £28 on an item than £25 plus £3 shipping, which seems completely nonsensical but research has shown this – additional postage can be a psychological barrier to spending!
If you’re unable to build postage into the cost of a product and therefore can’t offer free postage think about a smart postage limit. So for example, if you know that your average order value is £36, set your free postage limit at £40, just slightly up from not miles away from what your average order value is, if you make it too high, then people just in general won’t even notice it. If you put it around 10% higher than your average order value, then it just gives customers an incentive to add one extra item to their cart to push their total over the free postage limit.
Whichever ever country your listening in make clear it’s free postage within that territory – it’s rare, especially for small businesses to offer free worldwide shipping so don’t worry just be clear about it.
Currently, you’ll find most retailers, especially in the UK have some information on their websites about shipping challenges. If you’re somebody who only takes a very, very small proportion of your sales from overseas, you may want to consider turning off that option for right now, until we get a better sense of what’s going on. That will depend on your business and what you feel comfortable with.
My top tip is always under promise and over deliver. So you might want to put a note about your delivery times being longer than they normally are just to give you a bit of that breathing space – then when the item arrives before you said it would you’ll have a happy customer!
So there you have it my short and sweet – postage and packaging – the real nuts and bolts of running a business blog post and podcast.
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