{This post is part of a FREE 5-part e-course on growing the profits in your online handmade business, running on Create & Thrive this week. Subscribe to our email updates to make sure you don’t miss a lesson. You can see Lesson 1 here.}
Welcome to Day 2 of our 5-day course!
Today we’re talking packaging. Specifically – how you can make sure you’re not spending too much money – or time – on your packaging.
_______________________________________
Packaging can put a big dent in your profits.
Of course, we all want to have beautiful packaging to wrap our gorgeous handmade goodies in. However, we need to be smart about how much that packaging is cutting into our profit margins.
Say, for example, that you sell clothing. Currently, you pack all your clothes in a box, wrapped with a ribbon, as well as a little handwritten note and a business card. This is then put into another envelope/box and addressed. When you add all that packaging up, it adds up to $5 (as an example – you need to work out your own costs).
That’s $5 you’ve got to earn – either by covering it in your shipping prices, your item price… or you’ll taking it out of your profits.
Now, what if you changed so that you didn’t buy a box, but simply wrapped your clothes in some brown paper or tissue paper, with a ribbon. And perhaps you can make your own business info cards, print them on paper, and write your note on the back of each one. This is what I do. Sure, I have professional, gorgeous business cards… but I don’t bother putting them in with online orders.
Why? Because as far as I’m concerned, those business cards are to give to new people who haven’t ever seen my business before. The point is to entice them to check out my website. Someone who’s bought from me has ALREADY checked out my website, and been impressed enough to buy from me. I don’t need to give them a business card. They know where to find me. 99.5% of them will just throw it in the bin. Honestly – how many business cards do you keep and USE that you get in online order parcels?
But back to the main event…
If you don’t do this already already, go add at least another dollar or so on top of your shipping charges. Go on, I’ll wait.
*pause accompanied by chillin’ to Matt Corby*
Why am I asking you to do this?
Simple. You should already be charging at least what it actually costs you at the post office to ship your goods. This additional dollar is the start of covering your packaging costs. It may be you need to add a bit more. I don’t know – and you certainly won’t know – until you do the maths.
Undercharging on shipping is a common mistake that will consistently eat away at your profits. (And if you offer ‘free shipping’? Make sure your shipping costs are calculated into the price you’re selling your goods for.)
Also, as a follow on from our earlier lesson – Get Organised – make sure you have all your packaging materials set up together, so it’s easy and quick to package your orders. Make sure you’re always stocked up on tape, wrapping materials/ribbon, envelopes etc, so that you don’t have to make a mad dash to buy more supplies! (I speak from experience…)
Also – you should be buying your shipping materials either at wholesale prices, or at least in bulk. This will save you both time and money.
The first time I bought a box of 1,000 bubble mailers, I almost hyperventilated. It seemed like a HUGE expense at the time, and I wondered if I’d ever use them all. Let me tell you – I used them all. And these days I don’t bat an eyelid when buying that box of 1,000 bubble mailers. Because I KNOW that buying them in bulk is saving a HUGE amount of money in the long-term.
A crucial thing to remember though – you can’t scrimp on safe packaging. It is paramount that your item arrives at your customer’s door in top-notch condition!
ACTION STEPS
1. Sit down and actually calculate how much your shipping materials are costing you per item shipped. Don’t forget to also add in the time it takes you do package everything!
Are you currently covering that cost in your shipping charges?
If not, could you increase your shipping charges to cover the cost? Or put the cost onto the item price?
If you don’t think you can, then you really need to look at altering your packaging. Take 10-20 minutes and brainstorm alternatives that will save you money. Perhaps search for similar shops and find out how they package their goods.
2. Go and organise your packaging, if you haven’t already.
Put your return address on envelopes in one sitting, pre-print and write any care sheets or discount coupons and have them in a pile ready to go. This will save you time down the track.
