Interaction With an Automaton

Today at the UPS Store

Me:  Hi.  I’d like to ship another of one of these boxes I sent last week.

Clerk:  Oh yes, I remember you (types in my phone number).  Same address?

Me:  Yes, please.

Clerk:  Okay, that will be $37.50.

Me:  $37.50?  It was $13.50 on Friday.

Clerk:  Yeah, but this box is bigger.  See, this box is 14 inches wide, and the one you sent last week was 13 inches wide.

Me:  This is the exact same box, holding the exact same contents.  The dimensions are printed on the side.  See?  Thirteen inches.

Clerk:  Yeah, but it bulges out in the middle here.  I have to measure it at its widest point, not across the top.  I’m not trying to overcharge you, but I have to follow what the computer says.

Me:  It’s just plush toys in here, I can fix this (taking box off scale and smushing in the sides).  Try it now.

Clerk:  Okay, let’s see…. Oh no!  It’s puffing out again!

Me:  Measure it quickly!

Clerk:  Thirteen inches (punches it into the computer).  What do you know?  $13.50.  One inch makes three times the price!

Me:  Does that seem weird to you?

Clerk: It’s not my fault!  It’s the computer!

Me:  I know it’s not you, I just find it amazing.

Clerk:  Yes…it is amazing….

Ask Biz Miss: Self-Shipping Questions

Is it worth all the trouble to give my customers multiple shipping options?

Well, that all depends on what you mean by “options.”  I wouldn’t necessarily recommend offering multiple carriers but it’s okay to offer multiple speeds.  In other words, choose just one company to ship with, such as UPS, FedEx or the US Postal Service.  If your web site’s shopping cart automatically calculates shipping costs, you can offer multiple delivery options such as First Class or Overnight, but if you have to enter those prices manually it may not be worth it to have to stay current with rate changes.  Some sites, like Etsy, never let you choose more than one service or delivery option to a given destination.  That’s fine.  Just add a line to your FAQs, policies, or product pages that asks customers to contact you if they need expedited shipping or prefer a different carrier.

Can I charge for “handling” if I ship products myself?

Absolutely.  I think it’s crazy that people believe their customers won’t buy from them if they charge more than the cost of postage to ship something.  Packing materials aren’t free and neither is your time.  Charge your normal hourly rate plus the cost of your shipping materials and postage.  For example, if it takes you five minutes to ship something (i.e. look up the order, pack it, address it and print out shipping labels) and you pay yourself $25/hr., you should charge $2.08 in addition to the cost of the box and the stamps.  This is not unreasonable.  If you still feel funny about it, though, feel free to lay out the charges in your FAQs or Policies page.  Don’t sweat it if a customer refuses to buy from you because of this.  You don’t want a relationship with someone who thinks your time is worthless anyway.

How can I keep the time and cost of shipping as low as possible?

Whoa.  Big question.  Let’s tackle time-saving first.  The most important thing is having the right supplies around.  I keep all of my shipping materials in one place, including a postal scale, address stamp, padded envelopes in sizes that fit my most common items, and the most common denominations of stamps I use.  I order most of these in bulk from places like Quill and Uline.  The shipping is usually free and my order often arrives in 1-2 days.

postalsupplies

My postal scale is a regular spring-loaded Dymo scale with the postage prices printed right on the dial.  I place my package on top, and the needle points to the correct First Class postage price so I don’t have to look it up.  The Priority Mail and Express Mail prices are also printed on the front in a grid.  My only complaint is that the replacement dials they send when the price goes up are slow in coming and expensive ($15).  I looked into postage meters, too, when I was first starting up, and I determined that they are not worth the monthly rental fee unless you send hundreds of First Class envelopes each month.

I keep tons of $0.44, $1, $0.17, and $0.20 stamps around because any First Class package can be mailed using just those four denominations.  It’s often much quicker to address an envelope by hand and use stamps than it is to go online and print out the shipping label.  On the other hand, if you’re mailing something that has tracking info or doesn’t fit in your corner mailbox, it’s usually better to create the label online.  The shipper will send the tracking info to the customer for you and you can drop off your shipments at the post office or hand them to your driver/mail carrier.

Now for cost-saving.  Firstly, the more you can store, the better.  Having space to save shipping materials allows you buy in bulk and and to reuse the boxes, bubble wrap, etc. that you receive from other senders.  Secondly, become familiar with shipping classes and delivery times.  For example, what the USPS defines as a “letter” can be surprisingly large, thick and heavy.  Just beware of uneven or weirdly-proportioned envelopes.  USPS machines can’t handle them so they require a $0.20 “non-machinable” surcharge (hence my stash of $0.20 stamps).  In another example, UPS always delivers Ground shipments within the Bay Area in 1-2 days.  There is therefore never any reason to pay the overnight rate on a local shipment.  It arrives just as quickly at the lowest price.

Thirdly, I’ll reiterate that you should use online shipping labels for any package that uses tracking info.  Most carriers will give you a discount on postage bought online.  You can also schedule a free pickup for most online shipments, which allows you to save on gas money.

Lastly, make friends with your delivery people.  Learn the names of your UPS driver and your mail carrier.  Ask them how they’re doing.  Leave them tips or gifts at the holidays.  Not only are they competent human beings who deserve to be treated as such, they are often happy to do you favors and help you solve problems with your shipments.

Most of the complaints I receive from customers have to do with shipping.  How can I avoid this?

Shipping issues are by far the most common complaints I receive from customers as well, but I’ve been able to reduce them significantly by posting clear and specific shipping policies to my website and Etsy shop.  If an issue ever comes up that isn’t covered by those policies or falls within a grey area, I solve the problem to the customer’s satisfaction and then update the policy page so it never happens again. In addition, I sometimes put the answers to the most common shipping questions on the product page itself.

You can also reduce the number of complaints by offering fewer shipping options.  This may sound counter-intuitive (customers prefer choices, right?), but it ultimately makes for less confusion and frustration.  You can always let the customer contact you if they’d like special shipping arrangements.  If you’re able to provide them, great!  Your customer will love you for being so accommodating.  If not, you can always return a polite explanation that references your shipping policies and leaves no room for argument.

Finally, always pack your items well. Like, to withstand being run over.  It doesn’t matter whether or not your customer opts for insurance, you’re an A-hole if the product breaks in transit and you refuse to replace it.

What are some common shipping issues you’ve faced and how have you dealt with them?  Please share your experiences in the comments section.

Policies of Truth

Two customers recently complained about orders that arrived late to their destinations.  One was ordered through Etsy during the holidays.  It was an order for a single button, which was shipped using stamps and cost $0.60 in postage.  The customer left “neutral” feedback as a result. The second was ordered through my own web site using UPS Ground.  It was supposed to be a Valentine’s Day gift, but arrived the following Tuesday. That customer wanted a full refund.

Both customers, referring to quoted transit estimates on the USPS and UPS web sites, were annoyed that their shipments took two weeks to arrive.  This is perfectly understandable — I have received shipments that took weeks when they were supposed to take days and I was annoyed, too — but they left my company’s hands on time, and shipping estimates are just that — estimates.  Winter weather can cause all sorts of cross-country delays.  I would never think to ask for my money back or penalize a company for delays due to the Postal Service or UPS, especially if I had chosen a non-guaranteed shipping option like First Class Mail or UPS Ground.

Despite feeling principally certain that my business carried out its responsibilities properly, I wanted my customers to feel listened to and fairly treated.  It seemed unreasonable to offer refunds for products that were not defective and were not being returned, but I wanted to keep these customers coming back.  To the first customer, therefore, I offered another button or charm free of charge.  She declined the offer, but was glad that I made the effort, and she upgraded my feedback.  To the second customer I offered a $20 gift certificate, which she accepted as a good compromise.

I might normally think of these as expensive ways to sastisfy customers who are angry at another company’s mistakes, but they both provided a valuable service to me: pointing out flaws in the clarity of my shipping and return policies.  That’s the sort of practical education I’m willing to pay for.

Biz Mister: Seth Godin

I just found Seth Godin’s blog today, though he’s been writing it for years (2,500+ posts!) and he’s a best-selling author. He’s most often billed as a marketing expert, but this guy is really freakin’ smart about business matters in general. He covers lots of marketing topics, sure, but he also talks a good deal about things like innovation and customer service. I’ve already subscribed to the RSS feed and am considering buying one of his books so clearly, this guy knows his stuff when it comes to self-promotion.

Finding Someone Who Fulfills Your Needs (Part 2)

Choosing a fulfillment house was no small feat. First I asked my uncle, who’s been in the wholesale business a long time. He suggested GFS in Dallas, TX, which he uses because they have reasonable rates, good service and are centrally located (nationally) right near a major airport hub. Most of my orders are local, however, so a Bay Area warehouse seemed like a better choice. The shorter the distance my products need to travel, the less it would cost my customers and the better it would be for the environment. Plus, I really wanted to be able to pick up a carload of Sweet Meats for local deliveries and design fairs. Of course, a warehouse in the Bay Area is going to be more expensive than a warehouse in Dallas, but I figured the money I save by not shipping or driving my cargo out there would even things out somewhat.

Next I called my logistics guy over at Schenker. Sometimes they can warehouse things themselves, but they’re very often full and this month is no exception. They know a lot of people at a lot of warehouses, though, so I gave him my parameters and my budget and he said he’d see what he could find. In the end he couldn’t really find anything I could afford (he works mostly with warehouses that store perishable or expensive items like electronics), so I was on my own.

A brief tangent: Eleanor at The Present Group pointed me toward Noonaco, but they are so new they don’t have a warehouse yet and couldn’t store an entire container’s worth of merchandise. Oh yeah — I had since found out that my “less-than-container-load” was only shy by two boxes, so I ordered a whopping 24 more meats and filled it up. LCLs are charged per cubic meter to ship, but FCLs are just a flat fee,because they never need to be opened or sorted before they reach their final destination. If I hadn’t ordered two more boxes, it would have doubled the cost of my ocean freight.

Having exhausted all of the human resources I could find, I turned to the Internet. I started just by googling the term “fulfillment house” to try to get a general idea of terms and prices before I narrowed my search to within an hour of my house. I used a combination of Google, ThomasNet and directories like the Yellow Pages and came up with a short list:

After calling each of these places, it became apparent that it was going to be extremely difficult to comparison shop. Every company has their own complicated fee structure and no two are alike. For example, the one-time cost of unloading my truck into the warehouse might be calculated based on number of pallets, cubic footage of the cargo, or man-hours. Similarly, the cost to fill an order might be a flat fee per order, based on the number of boxes, or based on the number of individual items being sent. Combine this with possible minimums and the fact that some warehouse’s prices change the longer your stuff sits in storage, and my head was about ready to explode.

So I made a spreadsheet. Assuming I sold half my merchandise retail and the other half wholesale, and it took me six months to sell out completely (really big “ifs,” but they seemed to represent reasonable averages), I totaled what it would cost me to store and ship the entire container. Then, assuming the average wholesale order is 12 pieces and the average retail order is one piece, I totaled what it would cost my customers in shipping.

Using this very imprecise system, I was immediately able to knock out IPS and PRISM as unaffordable. I then called the other three companies back and asked about things like minimums and insurance coverage in the warehouse (very important!). The guy at GoodSource was sort of hard to reach and he quoted me a lot of numbers that seemed too good to be true. I just got a bad feeling in my gut about reliability, and I’ve learned to always listen to my gut when it says “no,” so I eliminated them, too.

That left R&L and PRIDE Industries, who are comparably priced. R&L scored big points for location and being a small, Bay Area business, and PRIDE won for customer service and the fact that they’re a non-profit that employs people with disabilities. In the end, I chose PRIDE for a lot of little reasons, like their really simple pricing structure and the fact that I could always reach my customer rep when I needed something, rather than waiting for a callback. At the very worst, if something goes wrong, I have a well-researched runner-up to turn to for my next shipment.

Finding Somone Who Fulfills Your Needs (Part 1)

When I first started thinking about contracting out the sewing of my Sweet Meats, I had it all planned out in my head. I would rent a large truck for the day, pick up my cargo at the Oakland docks, and bring it all home. At first, there would be a lot of boxes in the living room, but the orders from Bay Area stores would put a serious dent in my inventory when I delivered them all the next day. Then, slowly but surely, the living room would empty out as I sold out of all my stock within the next two months. Sure, it would take some time to fill all those orders myself, but since I would be getting paid for the “handling,” it was ultimately a smart move financially.

These daydreams of mine were not based on any real estimates of time, space or money, however, so they quickly evaporated when the hard numbers came in.

First I tried to find out how much space my cargo would actually take up. All along, I had been hearing that it made up less than a full container. I guessed that that meant it took up about half of the 20ft. container they were due to ship in. Assuming the container is also 10’ high and 10’ wide, this meant boxes of plush meats would take up our entire living room — not an option, according to my fiancé. Okay, so keeping them in the apartment was out, but I could presumably fit my boxes in a 10’x10’ storage unit, which rents around here for $150-200/month — not too bad, plus it would be kind of nice to have a dedicated shipping center outside of the house. Again, I assumed several boxes would go out immediately, which would leave some maneuvering room.

But wait. How was I going to fill these orders in a storage unit? Would there be a way I could connect to the Internet to print out shipping labels? Would the postal service pick them up from such a place? Was I going to have to order a really large, expensive scale? A new printer? Cartons of boxes in tons of different sizes? Was I willing to drive 10-15 minutes each direction several times a week and drive my orders to the post office? How much would that cost in gasoline? Would I have time for anything else on those days? I suddenly started feeling overwhelmed by the possibilities I could see and could not yet see. It was time to consider a fulfillment house.

A fulfillment house is a warehouse that holds your goods and ships them to customers. Most of them also offer special packaging and design services, but the advantage to hiring a fulfillment house lies mainly in not having to worry about supplies and logistics. For example, they have accounts with all of the major shipping companies and usually get much better rates than your average business due to volume. Fulfillment houses also have computerized systems in place for weighing and addressing your packages, and for keeping track of inventory. They have all of the packing materials already on hand, which they will usually offer at cost + 10-15%. All of the fulfillment houses I spoke to were also willing to let me use leftover packaging they already had on hand for free.

It was difficult at first for me to get used to the idea of letting someone else take over the shipping and handling of my products. After all, it is a crucial part of customer service and accounting, and if it were handled badly I could have some really big problems — angry or lost customers, incorrect inventory, or damaged or missing merchandise. But part of being a successful business owner is knowing how to prioritize your two biggest resources — time and money. I didn’t start a business to become a shipping clerk, so I’m comfortable with my decision to let someone else take that over for me so I can focus on more lucrative, long-term things like product development and opening new accounts.

Quality, service and low prices: pick two.

(I saw that sign once in a print shop, but I think it’s infinitely applicable to all businesses.)

A couple of months ago, my Internet service provider, Covad, got bought out by a bigger company.  As happened with Cingular when they got bought out by AT&T, the service went downhill.  Not only did our connection speed get slower but their tech support is now based in the Philippines and consists solely of people with thick accents named “Hank” and “Jim” who read scripts out of binders.

Yesterday our Internet crapped out.  After some diagnostic testing, I concluded that either our modem had finally died or Covad’s service was down.  To eliminate the latter possibility I called tech support and spoke to “Owen.”  Now, I understand why so many companies outsource their tech support.  My friend Steve put it best last night when he said, “I used to be tech support for an architectural software program. I didn’t really know how to use the program but I was able to solve 95% of my customers’ problems just by looking them up in the help menu.”  Similarly, I’m sure 95% of tech support issues with Covad can be solved just by telling customers to restart their modems, routers and/or computers.  My problem is that I used to be a school network administrator, so I’m in the 5% who have already tried everything in the binder before I call.  All I wanted was definitive answer about whether Covad’s service in San Francisco was up or down.  Owen made me go through all the binder steps with him anyway.  Three times.  He then performed several “tests” for which he had to hang up and call me back.  Owen assured me the service was up and running, but we had heard this the last time our connection was down.  That time, it turned out the switch for just our area of the city wasn’t working.  So I asked Owen where he was and he said “I’m based out of San Francisco.”

“Great!” I exclaimed.  “You must be using Covad for your Internet service.  Is it working in your office?”

This made him mutter something about working for the San Francisco office, but actually being in the Philippines, so I asked him for the number of his San Francisco office to see if their service was working.  Owen said he couldn’t do that, because he didn’t actually have their number; he contacted them solely though some kind of internal system.  Now, I’ve never heard of a way to make “internal” calls across the Pacific Ocean, but I didn’t want to argue with the guy anymore.  It’s not Owen’s fault that Covad is such a shitty company now.  So I simply clarified the facts.

“You don’t actually know if service is working my neighborhood, because you’re in the Philippines, and there’s no way for me to contact the office that is actually located here in California?”

“Yes,” said Owen, with a heavy sigh.

In the end, I was left with three choices: wait an indefinite period to see if the service came back (free!), wait 3-5 business days for Covad to UPS me a new modem ($100) or have a technician come out to the house with a new modem tomorrow ($190).  Since I run a web-based business out of my home, I went with the latter.  At least then I would know definitively what the problem was and that it would be fixed within 24 hours.

Then I got a bright idea: I went to Best Buy.  It took a good 10-15 minutes to find a staff person who knew the difference between a cable modem and a DSL modem, but I eventually made contact with the sixty-something manager of Best Buy’s “Geek Squad.” He told me to try AT&T’s DSL modem, since Covad leases their lines from AT&T anyway, and what do you know, it worked!  Okay, it took about an hour of finagling to get it to work with Covad and my router, but I’m back up and running having only spent $70 as opposed to $190.

It took half an hour on the phone this morning to get Covad to cancel my service appointment and then another half hour to convince them not to charge me for it anyway (Owen had not alerted me to their 24-hour cancellation policy).  My next step will be to cancel my service with Covad altogether, but it often takes a couple of days to switch from one provider to another, so it will have to wait until the next time we go out of town.  I’ve heard good things about Sonic.net, another AT&T reseller (who isn’t?), and when I called them I got Mike in Santa Rosa.  Anyone else have any recommendations?  I’d be eager to hear.