Tuesday, 7 August 2012

Know your stuff...

A few things have been brought to my attention over the past few weeks.
The best place to discuss such matters is here on my blog.

As you may or may not be aware I have been in the soap business for 6 years.
Over that time I have learned much and gained many friends and loyal customers (who have also become friends).
Every single part of what appears to be a small business is dealt with by me and me alone.  Nobody else really gets a say in what goes on behind the scenes or at the forefront of the business.
So...let me put a few things into perspective and give you something to chew on.
1. I am a soap maker
2. I am a creator of complimentary bathing products and perfume oils.
3. I am a packaging designer and printer.
4. I am an accountant - not certified..but I am one. Nobody else does my daily entries or my tax returns.
5. I am a product analyst.
6. I am my own Public Relations consultant.
7. I am a social media professional (lol).
8. I am a cleaner.
9. I am a web designer and web maintenance person.
10. I am a post room supervisor.....which leads me onto my next subject.

After reading several comments on a certain forum I was a little miffed at some comments I had found with regards to the postage we charge via our on-line shop.
Before I begin please know that I could not have possibly researched more on this subject.
I use Royal Mail to send my parcels who in my experience are the most reliable - apart from a few select couriers.
The reason I use Royal Mail is because their prices and service are never matched...ever.
My packaging charges are as follows:
UK:
First item - £3, then 25p per item thereafter. (we just decreased it from 50p thereafter).
Europe - £3, then £1 per item thereafter.
Rest of World - £3.90, then £2.50 per item thereafter.
(bathing grains prices are a little more for the EU and ROW due to the weight).

It is apparent that the prices via Royal Mail for Rest of World delivery IS expensive.  Royal Mail really upped their international prices this year, which left us with no option other than to increase our price.
On small packets I make 6p.  6p!
If I were to use a reputable courier at today's rates then the cheapest my customers would pay is £7.99 for UK deliveries...and that's only up to 1kg in weight!  THAT is expensive! Don't even get me started on the international prices.
Sure there are the really unreliable couriers who can take up to 2 weeks to get a UK parcel to you...if at all.  They charge £3.99 for parcels up to 2kg...but after many a bad experience of parcels going astray when using these couriers, there is no way I would ever deal with them again...no names mentioned for obvious reasons.  If a parcel goes missing...a customers first point of contact is me...the business owner, not the bloody courier who may have 'misplaced' their order.  Every aspect is on MY head.

I use a franking machine for my postage as it's easy, quick and convenient and for some reason far fewer items have gone astray...maybe it's the business postal stamp that puts the dodgy people off before they plan a heist! Hmmm?
Now then.  Let's get down to the nitty gritty.
Costs.....
The price stated on the packet is indeed what we pay but what it doesn't include is the rental cost of the franking machine, the labels needed to print the postage for attaching to the parcel, the ink used when printing or the top up fee we are charged each time we need to increase the amount of postage we have remaining on the machine.  You have to top it up...it doesn't just have a never ending supply of postage.
So, each time we top up we have to pay a fee of £7, which over the course of the month can mount up quite significantly.  I must become more savvy at that I guess.
The price does not include the cost of the packaging I use (that's an envelope or cardboard box, which at today's rate is 25p per envelope or 50p per box) or the reams of tissue I buy to wrap each and every item in before they go into the parcel or the lovely mini cards we send with every order or the freebies sent with every order. We do not get free packaging from Royal Mail like they do in the states...we have to pay for ours because our little country likes to bleed each and every one of us dry.
The price also doesn't pay for my time taken to package an order.  Some say 'your time', like wha?'.
Hell yes, my time!
I have been in the Mail Order business for almost 15 years...so when I say I know my stuff, I know my stuff. At one place I worked we lost that much via Mail Order sales that my boss (at the time) said we may as well throw a 'fiver' in the box with every order cos that's how much we're losing by doing this.  A year later he shut down the mail order dept. of his business.
I hasten to add he set it back up again after re-assessing the REAL cost of running it and by real cost I mean the cost of people, product assessment and quality control but most of all....TIME. People take time, which costs a company money. OK? We got that? Good!

Moving on....
My business has upped it's game, no doubt about that.  First and foremost I now have a workshop to work from, which gives me a sterile environment and a safe haven for my products...and myself!
Guess what?  Yep....it costs money to rent it. It doesn't come for free.
If you have a small business you will know that you also have overheads.  They may not be massive but they do exist...and if you don't account for each and every aspect of those overheads in the prices you charge for your products and for your postage, you may as well go out on the street and give your product away.
Being a small business owner should never mean cheap.
I know that I and many other soap makers take great pride in their hand-crafted products. They also take pride in the way they present them and the way they arrive at the doors of their customers.
When I order from large on-line companies I don't get the treatment I give to my customers.  I can't speak to the owner of Boots one on one or the owner of Clinique but I can speak to the owner of Indie companies...because they exist. They don't hide behind the abrv. CEO - I know their names and I pretty much know where they live.
So...if you buy indie you are buying into a person's life. You are buying a person's vision and you can talk to them about it.  If you like buying this way you will also appreciate what goes into it...or I'd like to think you do.
Remember just because larger companies (like Lush maybe) charge a flat rate of £3.95 for postage it means they probably have a great deal with their courier due to the volume of parcels they ship every single day...and not only that but let's assume I make bath bombs (I don't).  I would probably do batches of say 20 bombs of any variety at a time.  You think Lush make as few as that?  Of course you don't.  They make them in their hundreds, maybe thousands.  This in turn means they get through a hell of a lot more raw ingredients than would a small company, which also means they'll be getting a much cheaper price for those ingredients and will be buying directly from the source unlike us small businesses who buy from many a middle man.
There is so so much to learn...but if you just asked the questions I would give you the answer.
To me there is nothing worse than a haphazard assumption.
Fin....



24 comments:

Robert Doran said...

I totally understand what it's like to operate a small business, as I do so myself, Tiggy. You will never be able to please everyone... there will always be someone who will complain. If it's not about the cost of shipping, it will be that you didn't have what they wanted WHEN they wanted it.

As long as you are happy with how you run your business and the majority of your customers are happy too, ignore the complainers and the naysayers. They will always find something to bitch about no matter what.

As for me, I will continue to order your products regardless of how expensive it is to have them shipped to me in the US. They're sooooooooooo worth it!

Keep smiling, keep soaping and every once in a while, take a break away from reading what others say.

<3
Rob

Unknown said...

COMPLETELY agree Tiggy, I was particularly annoyed with someone on said forum who said you must have been just being greedy by having such prices. I didn't argue back with any of them, I simply said that I am more than happy to pay for your postage prices. I love your products, you are independent, innovative and work hard. Not sure what they expect really, the Earth I think :-/

KitEmbleton said...

Tiggy,

I have to say that I've been a happy customer of your bath products for about a year, now, and I live in the US. I have NEVER thought that your shipping prices were too high; frankly, I thought that for coming to me from the UK, they were damn reasonable! If nothing else, the cost of the shipping makes me want to purchase MORE of your products, so that it makes the shipping "worth it".

I'm sorry that people are ragging on your shipping prices; that's complete crap. It's obvious that they don't understand what going into running a small business. I think it's great that you've stood up and said something, educating those who may not know.

Anyway. Blah blah blah. I think you're awesome, and that your products rock, and that your shipping prices are just fine! Keep on keepin' on, girl! <3

Sunbasilgarden said...

Very nice blog post Tiggy! Heck, I'm a full time soap maker who has purchased from you, several times, from the USA..(because I love your passion/design and quality) and would never even consider snarking over shipping costs. You know that when you order Internationally, it's going to be higher than buying local.

We are lucky in the states to have our bankrupt United States Postal Service still offer Flat Rate International Shipping...but obviously that is not everywhere. I eliminated First Class International Mail years ago as it was not costing me to ship single bars of soap abroad, only to have them damaged or lost.

Here's to you, keep doing what you do and loving it! And cheers to a wild holiday season ahead. Soap on baby!

cookingwithgas said...

I can tell you that we have 30 years in business and shipping cost are going up over here as fast as gas prices. It has become high to ship. I finally went to a cost plus boxing fee. Actually cost + box fee.
THe box fee - try to cover box, bubble, tape, printing, trip to post office- I figure I am still on the loosing end.
Their are many companies who give "free" shipping. They just add the cost on top- you know it is not free.
I have found that online shoppers want free shipping- think about it shoppers- you are paying for it some how.
Good luck- you are a business not a charity.

Soapchick said...

Hi Tiggy - As you know, Im in the same boat as you. Running a business with sales from the internet that rely on posting out soaps is not easy. Its time consuming (why does it ALWAYS take longer to pack that you think?) so much so that we are really leaning towards wholesale only and thats sad. The last hike in the postal rates was downright greedy and has caused great hardship to a lot of small companies like us, however, we are still going. More grease to your elbow mate, dont listen to the gripers there is always someone who likes to have a moan. I think your soaps are fab!!!!!

Tracey Broome said...

Raise your soap prices and offer free shipping. People that complain about shipping costs aren't bright enough to figure out they are paying somewhere for that "free" ship! Just like the people that use their points on credit cards. They are paying increased prices for the items because the vendor has to charge more to cover the fees they get charged. Why are there so many dumb asses, I ask you?!?!
Go have a nice juice :)
xo

RityFaerie said...

Well said Tracey!

innerearthsoaps said...

Oh the postage debacle! My prices are even higher than yours, especially international. I have people email me sometimes to tell me I should bring the rates down. And I'm charging postage ONLY, no $$ for packaging materials or time. Well written article. xx

Ambra said...

Great post. It's really destructive when people don't figure their overhead costs and underprice. It doesn't do anyone any favors. And happy juicing - I also recently started juicing and love it :) Makes me fell great.

Topcat said...

Tiggy, I can order from you and have it shipped to my home in Australia often for less than I can have something shipped from within my own country! Shipping is definitely a frustrating part of small business, yet integral to online sales. I am sorry you are being troubled by the ignorance of others. Ignore it xxx

B said...

Well said, Tiggy! You're 100% worth every penny you charge, and then some- don't you forget it! <3

Lindalu said...

Well spoken Tiggy. So many people don't realize the full cost of doing business whether it is out their homes or an actual shop. Like you said those costs must be covered or the business will not survive, let alone prosper.

Your shipping prices are quite fair and I'm pleased to see you standing strong.

Cheers
Lindy

Topcat said...

Tigs - unappreciative customers are not who you are looking to sell to anyway so it is no loss if they go elsewhere xxx

Here is a comment from my soap page on this very topic:
"Those people are not your customers as they do not see the value. If that is what this person is experiencing then he/she is targeting the wrong people.....Know your customer."

Melissa said...

Man, do I hear ya Tiggy. It's critical to be clear about whether you're running a business or enjoying a hobby. And yes, of course your own labour must be taken into account because there just might come a time when you need to employ help and it's critical that your pricing structure allows you to do that. I tend to keep away from forums and I'm saddened to hear that there's personal sniping going on. We offer flat rate freight but we also add on the cost of the box (naturally). I actually had a lovely letter from clients yesterday - clients who had ordered at least four times by mail order and they said they hoped that I was successful because they wanted to be buying from me for many years to come. We owe it to our clients to be good business people because we're providing them with a product they want and sometimes need.

Anastasia said...

Well said Tiggy.

I think what many international customers don't realise is that, it is more expensive to ship the same parcel from the UK to the US, for instance, than in reverse. Considerably more so, and we do not have the luxury of pre-paid envelopes for heavier parcels like they do in the states. Neither do we have any reasonable tracked international service.

Large companies like Lush can afford to offer a low flat rate because they have enough orders to fill an entire truck.

I'm always against including the cost of postage business into the product price, because in some places you pay tax and customs on the product value, NEVER the postage. Absorbing these costs into the product fee might get you fewer complaints about P+P prices, but it will screw over customers who have to pay tax on the product value.

I've always considered that the P+P cost would include stuff like packaging, petrol and time getting to the post office, the actual postage costs, and especially the time taken if the business ships every day, not just on a specific day each week as some do.

Your turn around time is very low for a one-woman-operation, especially given that each product is made from scratch and there are so many limited editions that you can't produce huge matches at once. As I've said before, I think you're honestly the best in the business, your product prices are very reasonable and I can get my hands on my parcel in just a few days. I think that's a bargain.

I am unsure of what Jo expected her order to be shipped in, perhaps some velvet-lined wooden box, but if the packaging was damaged and the products were not, then the packaging she so disparages obviously did its job very well. After all, that's what it's there for.

Snowblume said...

Hey Tig,

I guess a lot of customers often forget that shipping prices are out of your control! U don't own Royal Mail do ya? I have spent so much on shipping since I buy online from overseas companies but it is ALWAYS because of the following reasons (1) unique items (2) better quality (3) excellent customer service. I chose to focus on my products, rather than the crazy shipping prices. If I were to do the latter, I think I'll go nuts by now!

If customers want cheap shipping, then heck go take it out with the shipping companies lolol! See if they will take their nonsense ;) Whenever I have to send something to my friends overseas, I pay through the nose for it, because it costs so much from Singapore! So my choices are either I send the box, or I don't send the box.

I've ordered from you so many times and NOT once was the parcel damaged. And it's more than 8 hours of flight from UK to here ;) Sides, damage to parcels are also beyond your control because the postman could have been rough with it. The way I see it, once it's out of your hands, it's out of your control no?

Focus on the customers who love u, appreciate what you do and your passion. The others are just trying to bring u down for whatever mad reason they have. Everybody's skin type and preference is different, so it is impossible to please everybody. Just like customers chose which companies to buy from, companies can also chose which customers to target on.

Also, I really don't see why you have to justify why u 'need' a workplace to anybody. Do customers go around asking other companies 'Hey why are u wasting money on renting spaces/buying tissue paper?' ROFL At the end of the day, it's very simple as a customer - you chose to either buy something or not. How complicated is that eh? ;)

The Soap Sister said...

You nailed it Tiggy!

While I've never used your soap (the shipping is just to high -LOL Gotcha! just kidding!) I have to say that they are magnificent eye candy that never ceases to motivate & inspire me to get busy!

I am thankful that I don't have the time or inclination to "police" and ridicule other soap-makers as this nasty person has done to you. Sounds like they have a near-terminal case of envy to me. Don't let it get you down dear, all your satisfied repeat customers CAN'T be wrong. Soap on!
~Becky

Tiggy said...

Hi all!
Just writing another thank you as I removed that bitchy comment from 'Jo' along with my response. I am absolutely convinced it was the Joanne from Barrow in Furness who has ripped off a lot of on-line indie companies. I don't want any association with this person and have made that clear from the start of my hearing of her antics.
I don't want her bitchy comment leaving a bad taste in my mouth as such things leave one bitter, and I'm not into that!
So, thanks again for your comments, they are appreciated.
xx

Zenitude said...

Well said and Amen to all of that. As a Canadian I fully understand where you are coming from. Customers are better informed now thanks to your post.

Anonymous said...

Well said Tiggy, I applaud you x

Tiggy said...

thanks! who are you anon?

Soapchick said...

Tiggylicious post! only just seen it but great to vent sometimes, I too have been appalled by how just one miserable moaner can create havoc in a tiny, one-man-business. Postage seems to be everyones bugbear and, as I mainly seem to wholesale now, its even worse as I am beholden to the couriers! Its tough out there.... you just hit the perfect tone in you post, Brilliant! Thanks XX

Alejandra Rojas said...

Great insights, your post is realy good, and very useful for me.. I make goats milk soap in Chile, South America (www.productoscapra.cl), and there are many aspects that I dont include in my costs, like my TIME for example, I take AGES packaging everything so that it reaches the customer in excellent conditions...thank you so much!!!
Alejandra Rojas