Actually, we do, through our business shipping partner, Pack & Send. Let me explain.

Example

I’m going to use an example of equipment I sold through our store. In this case, I asked the customer for $150 to cover packing and shipping to Sydney, explaining that if it was more, they would need to make up the difference. When I got the quote from Pack and Send, it was $231.

I should have simply agreed and charged the customer, but they’d indicated that they felt $150 was high, so, instead of doing what I said I would do, I did something I stopped doing a decade ago: I tried to save the customer some shipping money. Here’s what that good intention cost me…

OK, so I drove to AusPost to try to find a box, but they didn’t have anything the right size. Then I drove home and looked for packaging materials. Nothing. Next stop Bunnings, where I bought a box, bubble wrap, tape, etc. Because I don’t pack and ship things, I don’t keep these materials. Makes sense. All that took more than 60 minutes.

It took me 30+ minutes to carefully wrap and box the equipment, and when I did, I thought the box felt too flimsy. So, it was back to Bunnings for another box to double box it, and another 30+ minutes. By now, AusPost was closed, so I had to wait until the next day to take the box to AusPost, post it, and go home. Minimum of another 30 minutes.

False Economy

So, the total cost for shipping with AusPost, plus insurance, was $97 vs $231 for custom packing, shipping and insurance via Pack & Send. You’re thinking: Mike, that’s great, you ‘saved’ the customer $134! Well, yeah, if the equipment packed and drove itself, maybe, but it doesn’t, does it!

Here’s the real equation: my costs were $20 for materials, $10 for fuel and 150 minutes of billable time, making $405, call it $400. The bottom line: saving the customer $134 cost me $400. No money was saved here at all and if I billed the customer for my time, per standard business practice, it is actually much more expensive to do things ‘the cheap way’.

This is exactly what I tell people about using ‘cheap’ repairers too, BTW!

Time & Motion

This is why I NEVER get involved in packing or shipping, other than to take equipment to Pack & Send. If you run a business, you shouldn’t either.

For those who don’t run businesses, the idea of time and motion costs, billable hours, etc., might not make sense. Some might think that my time is not an actual cost, but when you are the business, and you’re packing equipment rather than repairing it, it most certainly is. Business owners and professionals who charge for their time know this only too well.

I can’t incur a large loss on a one-off sale with small margins when shipping is a customer cost and has nothing whatsoever to do with me. I’m not responsible for shipping costs, and whilst I wish packing and shipping were cheaper, it is what it is, and we simply have to work with that.

Lessons

Strangely, I’m glad that this happened as it reminded me why I stopped doing this years ago. So the next time you are wondering if we offer a packing service or Australia Post shipping, you’ll know why the answers to those questions are generally no.

We use a specialist packer/shipper, and whilst the up-front costs of doing so are a little higher, the total cost, including my billable time, is actually much less. Should I have charged for my costs here? Yes, but I’m using this as a teachable moment for me as much as you. No more packing or shipping for Liquid Mike.

Thanks for listening to my story!