Sunday, July 5, 2009

Small-Order Surcharges

The young men and women who spend their summers selling books for the Southwestern Company are advised to take a cold shower first thing in the morning. This isn't to wake up quicker nor to ward off the summer's heat but to start the day off doing something they really, really don't want to do. That way the inevitable rejection they're going to face throughout the rest of the day doesn't seem so daunting.

So I'm christening our blog with perhaps our least popular subject, small order surcharges. Here's the policy in a nutshell:

Orders which total less than $25.00 (before shipping and/or taxes) incur a $10.00 surcharge. Orders from $25.00 to $50.00 incur a $5.oo surcharge. Orders over $50.00 incur no surcharge, just shipping and taxes as applicable.

So in essence, we have a $50.00 minimum but you can order less if you're willing to pay more.

We started this policy around 2001 when the recession was sending more and more small orders our way and fewer big ones. Some days it would get absolutely ridiculous. We were chasing our tails. And operating more like a charity than a business, as we were most definitely not making money on $50.00 orders. Only a very large volume business like Amazon can do that. Many companies much larger than we are have tried it and failed. And believe me, folks, supplying to the sewing industry these days is anything but a large volume business.

Now the good news is that in this recession, we've softened the policy somewhat. Now if you are a regular customer (which we simply define by whether you've placed more than one order over $50.00 in the last twelve months), we waive the fee.

In any case, it really works to your advantage to order more at a time. The cheapest we can get anything anywhere these days is about $5.00 and I'd say our average package costs closer to $10.00 to ship. If you place a $20.00 order and it costs $5.00 to ship it, 25% of your cost is in shipping alone. Add our surcharge in and it's 75%! But if you go ahead and order $50.00, it's only 10%.

For you sewing folks, I like to use the analogy of someone coming to you with a custom job. If they just want one item you're going to charge them a higher price for it than if they order ten of the same thing. In fact, probably almost the same price for ten as it costs them for one! You know the reasons: most of the cost to you is in your setup and labor. Same here.

Thanks for reading up on this fascinating subject. I look forward to covering more scintillating topics in the future.

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