Postage

[Chesand]

There is another aspect to this - the cost of collecting the item personally.
I suspect that it would cost a lot more than $18 to drive from Coffs to Brisbane and return. I agree however that the cost should have been agreed before the item was sent.
I had a back order with Carbatec in Melb. It cost me $15 to have it sent to me and it was on my doorstep the following morning. It would have cost me more than that in petrol. As we are on opposite sides of Melb it would have meant almost a half day trip there and back.

Just my 2c worth.

[FenceFurniture]

But at $16/hr it's not a given that the employee can write legibly and even reading can be iffy.

In which case they shouldn't be assigned to that task, but i struggle to see the relevance.

... or around 2 minutes for the "person from accounts"

Yes Ian, that's exactly what I'm suggesting. I've written out a few EP bags lately, and it doesn't take long to write the sender's and receiver's N&A - perhaps a minute - and my handwriting is ok.

Most businesses charge in 6 minute increments, so P&H would likley have a minimum "cost" of around $5-10 on top of the postage.

Can this concept really be translated to quick operations such as writing an address? If they have (say) 10 items to send per day and they adopted this approach then they would be charging for 60 minutes work when it actually would take about 10 minutes to write out the addresses.

There are given costs that are always there, and as burraboy said, they could mostly be incorporated into the actual price of the item. If I am comparing the price between two suppliers I always look at the total cost to me including P&P. This can often result in purchasing an item for a higher price but with lower P&P. Recently I had a few router bits sent from Carbitool and they post the items at slightly more than cost value. They have pretty obviously incorporated the usual given costs into the price of the bits. I believe that this projects a much fairer image to the consumer, and that's vital. Better than have a disgruntled customer on their hands, as the OP has well and truly become.

[jimbur]

This is an example of what these companies are up against in terms of competition.
I've just picked up some pieces of HSS posted from Hong Kong. Free postage and sent registered. I realise that this will be subsidised but, if you want repeat business, you shouldn't try to get every last cent out of a customer.
Cheers,
Jim

[Handyjack]

The cost of Festools is pretty much the same in Australia where ever you buy it from give or take a dollar or two. If you are able to go into a store and pick it up that is fine, however if you require it delivered it needs to be paid for. Some dealers such as Ideal Tools in most cases include delivery if the order is more than a certain amount. (In Ideal Tools case it is $250 [excludes some remote areas]). This can be one way of avoiding nasty delivery costs.

[gdf26562]

went to the post office today and found that the postage cost was just under $10, that leaves $8 for packing, can't really see the justification, considering the company would already make profit from the items I purchased, $1 for a small thumb screw amongst other things.

I do not begrudge the cost of the items, but with the attitude and $8 cost to pack the small items I can't get my head around it.

Considering he said he just breaks even, I think a letter is in order to the manager to show my dissapointment, I for one will not use them again.

I understand the cost it would be if I drove that far, but fair go...

[tdrumnut]

My 2 cents worth,

I would have thought that the actual cost of handling/packaging the item would be built into the mark up that they put on the item, therefore the only extra cost should be the actual cost of postage.
I recently bought a Jet Table Saw from Gregory's and experience their
sales staff and felt that their attidude seemed to change once the product was sold.
Sometimes I wonder wether they really concider the repeat customer effect that service (with a smile) brings.

Cheers Rumnut

[allsport]

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

[Chesand]

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

Well said

[jimbur]

To clarify things in my mind, we are talking about an internet transaction aren't we where all the details arrive in an accessible electronic form ready to print out onto an address label? Plus, the money goes directly into a bank account.
The way some of the justification has been, I wouldn't have been surprised to see the costs of string and sealing wax included together with the trip to the bank with a bag of copper coins.
Cheers,
Jim

[Sturdee]

To clarify things in my mind, we are talking about an internet transaction
Jim

Actually it was a telephone transaction so the seller could easily have explained their charges at the time but failed to do so.

Hence their charge for postage and packing is IMO unsustainable and unauthorized and I would immediately start charge back procedures with the credit card company for the full postage charge of $ 18.00 and afterwards let them fight it out in court. I know that I would win.


Peter.

[jimbur]

Actually it was a telephone transaction so the seller could easily have explained their charges at the time but failed to do so.

Hence their charge for postage and packing is IMO unsustainable and unauthorized and I would immediately start charge back procedures with the credit card company for the full postage charge of $ 18.00 and afterwards let them fight it out in court. I know that I would win.
Peter.

Peter, makes some of my comments unsustainable of course but your points seem completely valid.
Cheers,
Jim

[Scott]

Peter, makes some of my comments unsustainable of course but your points seem completely valid.
Cheers,
Jim

Yup, 100% agreed. Peter has hit the nail on the head.

I'd like Jim from Carroll's or David from Timberbits to weigh in on this one. I order from these guys regularly as their service is incredible. PLUS postage is charge at cost and packaging is not charged at all. In fact, their packaging is often recycled and is packed so well as to protect from bumps and scrapes. At the end of the day both these companies are thriving because of their service and transparency when it comes to postage and handling.

If a company isn't transparent about ALL costs then they deserve to be outed.

[Big Shed]

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

All the costs you are listing there are what is called overhead and any business worth its' salt incorporates those overheads in to their pricing structure.

All these costs also apply to over the counter sales, with the possible exception of wrapping paper and string (Aust Post has some very nice strong satchels included in the postage cost).

I assume from the above justification for adding $8 to posting an item (which would have cost $7.20 to anywhere in Australia, remember that satchel) that you also stand behind your counter staff and record the time they spend with each customer, this time to be added to the sale amount (in 10 min increments of course)? This time will include the staff member and the customer discussing the weather, the footy, what they had for breakfast etc.

The fact of the matter is that a lot of businesses have seen fit to make p&h a separate profit center within the business, a business model that is ultimately self-defeating, hence the number of businesses reported as saying that the internet is killing their business.

Those businesses that have identified the internet (and phone sales) as a business opportunity to be grabbed with both hands are thriving, just look at the 2 businesses mentioned above.

[jimbur]

I like the idea that P&H takes into account the time taken to answer complaints calls. Now there's an opening for someone - imagine the recorded message - "if you wish to complain, press 9 and you will be charged at $50/hr levied at ten minute intervals".
Cheers,
Jim

[allsport]

Thanks for the advice about overheads.
The problem with this approach is that it doesn't work for a large number of business profiles. It's simplistic and naive. The place where it works best is in Economics-Textbook-Land, but many in Canberra also have a firm belief that it is beyond reproach. That is why they are Public Servants and have never been involved in a private business.
One of the primary reasons for a P&H charge is that small orders (>$30/$50) are a road to a slow death at normal margins. They take up all your time and pay you very little. If you put up your prices to compensate you lose the more worthwhile customers who now find you too expensive. Bugger! - can't do that! P&H it is.
And then people whinge about $8. Last time I heard , it was 2012. A stubby (yes, a small bottle) at a pub I was in last week was $10. For one stubby. Two meals at Macca's was $21. My last power bill was $320.
How about just a little bit of perspective on this; it's no big deal.