Handling Shipping

Shipping and handling charges — how to set them, how to present them to customers and prospects — were a hot topic at a session on operations benchmarks I moderated this spring at the National Conference on Operations and Fulfillment. We could easily have devoted the entire hour to the subject. And given the current situation with high fuel charges and carrier surcharges, perhaps we should have.

Several of the catalogers Mark Del Franco spoke with for his cover story on fuel costs (“Fuel Price Hikes a Two-Prong Problem”) said that they’d absorb their rising delivery and shipping costs rather than try to hike S&H charges. Customers are mistrustful of S&H to begin with: Why does it cost more than a few bucks to send a package via mail or UPS? And what is this mysterious “handling” anyway?

Operations consultant Curt Barry, in this month’s article and in an article on S&H that we ran earlier this year (as well as during the NCOF session I mentioned above), has stressed the importance of explaining to customers how you came up with your S&H fees. He recommends breaking out your direct and indirect shipping costs on the order form of your print catalog and on an appropriate page of your Website. The best defense, seemingly, is a good offense.

It doesn’t appear that many mailers are taking his advice, though. Of the 30 catalogs I looked through this afternoon, only two devote any explanatory copy to S&H. Russell & Miller, a supplier of retail merchandising products, includes on its order form a color-coded map to show why some states (those that are farther from the company’s warehouse) pay more for “packaging and shipping” than others. And under the subhead “HONEST shipping & handling fees,” The Baker’s Catalogue emphasizes that “your order’s shipping and handling charge is based on what it costs us to pack your order; how much it weighs; and where it’s going. No inflated shipping rates, no bogus handling fees. Period.” The corresponding shipping chart is 10 columns wide and 16 rows deep and requires the customer to tally up the weight of his order — though the instructions do note that if you order via phone or online, the cataloger will do the calculating for you.

That the vast majority of marketers don’t bother to explain or clarify their S&H fees leads me to wonder if buyers are really all that concerned about the charges. Sure, there will always be some shoppers who balk at paying a few dollars extra for the convenience of not having to run to the store (I’m married to one of those consumers, which is why I’m on so many three-month buyer files and he isn’t). But if this spring’s leap in gasoline prices proves anything about the majority of middle-class and upper-class American consumers, it’s that they want what they want, and they’ll find a way to get it. How else to explain why so many people are moaning about gasoline prices yet aren’t considering trading in their gas-guzzling SUVs?

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