Quote:
There seems to be no correlation between value/size and cost to ship.
I'm just curious if anyone can shed some light on that?
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Hi everyone:
Happy to do so; I like to think the LOTG shipping, for what it is, is among the cheapest in the hobby.
My shipping costs are based on three factors: 1) the value of the package, 2) the weight of the package, and 3) some arbitrary sorcery that I'll try and explain below.
First, with respect to insurance: I do not charge bidders for insurance unless the total value of the package is greater than $25,000. I have to have insurance to keep my inventory secure, and insurance on shipping is part of my policy already. If I need to purchase a temporary endorsement on a high-value package, I do pass that cost along.
There is an
indirect insurance cost that I pass along in that I do have to ship certain ways based on the value of the package, simply because I have some requirements for how I have to ship. Any package valued over $500 needs to have a signature requirement, which costs $2.35 or something like that (if you've ever gotten a package valued over $500 that didn't have a signature requirement, that was a mistake on my part - don't tell the insurance company!). Any package valued over $2,000 needs to go via Express Mail. Any package valued over $25,000 goes via FedEx. So those are some "forced" costs, I guess, that are driven by my insurance requirements.
The important thing to note, though, is that for my Premier auctions, everything is shipped via Priority Mail at a minimum. That's what's responsible for the majority of the cost. For instance, for me to ship a small parcel weighing around one pound from my office to Tony O, the cost is $7.55. I use Priority Mail because it's safe, quick, and because I can track every package if something gets lost.
From there, anyone who has received a package from me knows what is involved. I take pride in how I package people's winnings, to the point where I still package most of the boxes myself. Even a single card is packed very carefully, with a host of different types of material protecting the card - typically a fresh, triple-walled corrugated outer box, some heavy duty bubble wrap, some corrugated interior pads, AND a bubble wrap bag, at the very least. None of my packing materials are freebie, USPS material, and I almost never reuse boxes (exceptions being for odd-sized or custom-packed items). There's somewhere between $2 and $4 in packing materials involved with each package, depending on what I'm shipping.
Beyond the postage cost and an estimate for packaging materials, the "sorcery" that goes into it is simple: My SimpleAuctionSite software automatically calculates shipping costs on every lot. Before I send out invoices, though, I review each one manually, just to see if any of the shipping costs seem excessive to me. Typically, I reduce about half the invoices by a couple of dollars or so - it's done completely by my gut, it's a reduction from the actual cost to ship, and it's always based on something simple, like "That just seems like too much to pay for that." I never increase a shipping cost, only decrease. That's why sometimes you see a shipping charge for $9.20, and then the next auction it'll be $8.75 for something similar - because I'm randomly reducing the actual cost by a few bucks to a number that feels more fair.
In each auction, I lose money on shipping. It's definitely not a profit center for me in any way.
I hope this explains things a bit, since it's not often I hear my shipping is expensive!
-Al