May 13, 2015 by Andrew Minalto - 4 Comments

How 10 Grams Can Make or Break Your Business!

ebay-shipping-10-gramsThis may sound a bit overly dramatic, but with all the messages I receive every week about the “shipping cost destroying my profit”, I think it’s time to write about this!

And that’s what today’s article is all about – how small differences in the size and weight of a product can make a HUGE difference to your profit margin.

This is especially important with small and cheap items, and for eBay sellers – where the competition is intense and your margins are razor thin.

The best example to illustrate what I’m talking about here is the Large Letter format when posting with Royal Mail.

royal-mail-large-letterIf your item is small enough to post as a large letter with Royal Mail, then your postage cost is less than £1 per item (if it weighs less than 100g) which is tiny!

royal-mail-services

But I am continuously shocked at the amount of people selling items that could be posted as a large letter, but due to them using the wrong packaging, they end up paying for small parcel postage!

royal-mail-small-parcelAs a result they pay three and a half times more than necessary for their postage; and then they wonder why they can’t make any profit or compete with other sellers on eBay…

eBay is a hugely competitive marketplace, which means that to be successful, you have to really be on top of your game. And packaging and shipping are two things that you need to have 100% optimised and efficient.

I talk very often about how shipping is one of the biggest costs when selling online (for cheap items, it’s often a bigger cost that even the product itself) and that means that if you’re making silly mistakes here, there’s really no chance you’ll be successful on eBay (or anywhere else for that matter).

You mostly see these shipping errors with private sellers, who just sell their own personal goods occasionally. I’ll be browsing through eBay and I’ll come across a listing that I know could be posted for £5-£6 but the seller has a postage and packaging price of £10+, all because they are using the wrong service/size format.

This puts customers off, decreases bids and destroys your margins!

So first things first, you should always ensure you are using the best shipping option for the products you sell. Feel free to take a look at a previous guide I wrote here to help with this: The Ultimate Guide to Shipping for eBay Sellers

!

But what about more intricate cases, where it really is a few grams or millimetres either way that is making the difference?

For example, a case I recently looked when doing some consulting work – my customer was selling used Blu-rays/DVDs and postage was costing them £1.26 (this is the cost for sending a large letter that weighs 101 to 250 grams).

And what we found was that the items themselves didn’t weigh over 100 grams but they were being tipped just over when the packaging and various inserts were included!

So while I do usually recommend including some extras within your orders, to help with list building and repeat business, such as a business card, a coupon for your website etc., in this case I decided that it would be better to remove all of that and only follow up online, thereby saving significantly on postage!

By doing that, along with switching to a different jiffy bag supplier (these ones weigh slightly less) they’re now able to post nearly all items for £0.31 less.

Of course it doesn’t seem like a huge difference in itself (which is why a lot of sellers ignore such things) but it is a 25% saving in shipping costs, and with large volumes that will really add up!

And this example nicely sums up two important aspects you should always consider:

  • Removing Some Parts to Lower the Shipping Weight/Dimensions

This doesn’t only refer to your own promotional materials!

Maybe you are selling a bundle of items and by removing one you can move down a shipping format.

Maybe your item includes instructions or a manual that can be removed and offered online instead, in PDF format.

Or you could be offering a free gift that just pushes your total weight into a higher shipping category… There are many alternatives here where a seemingly minute difference can have a big effect on your business.

*IMPORTANT* The main time when such considerations will be relevant to you is if you are just over one weight limit, as in our example above.
Of course if your total shipping weight is 3kg, you’re not going to be able to get it down to 2kg – that really goes without saying!

And for our second point:

  • Always Consider Alternate Packaging Materials

This is something else that I’ve covered previously on this blog, but I think it’s worth repeating now.

Another great and easy way to reduce your shipping weight/dimensions is by using different packaging material. Go from a box to a jiffy bag or even a mailing bag… as long as the item is sufficiently protected, you should pack it as light as possible. Anything beyond that is wastage.

Check out my overview of packaging materials and guide on when to use what here: Let’s Pack Some Orders!

And remember, you can also try different brands of the same packaging items as well as they’ll often have variations between them, say for jiffy bags/padded envelopes or for cardboard boxes. You can also try single wall vs double wall, etc.! There are many different aspects to consider.

Speaking of cardboard boxes, that also brings me on to the third point:

  • Be Wary of Volume vs Length and Width!

Both Royal Mail and couriers both give maximum dimensions for the length and width of a parcel, not just the volume.

small-vs-medium-parcel

This means that though two boxes both hold the same amount of stuff (i.e. they have the same volume) one might be considered a small parcel and one a medium parcel.

If you’re having trouble visualising what I mean, here is an example:

volumetricBoth these boxes hold the same amount of items, yet their shapes are very different.

This will mainly affect overly long parcels, so when possible stick to a square shape, as that’s usually what couriers and Royal Mail prefer.

And last but not least, I want to point out a couple of great tools that will make ensuring you’re using the best possible shipping method and format for your products incredibly simple and easy:

  • Digital Scales

Also known as postal scales, having a digital scale at home will allow you to find the weight of your package, down to the nearest 1 gram. They cost less than £30 and in my view are a necessity if you sell a lot of different sized items. You can find them on eBay by searching for “postal scales”.

  • Royal Mail Size Guides

You’ve probably used these at your local post office, but you can also buy them from eBay, which will allow you to make sure your packages fit within the required dimensions for the various Royal Mail postage options.

royal-mail-guideJust search for “royal mail template” or “royal mail size guide” and you’ll find plenty of results.

And that’s about it for today!

I know this wasn’t the most glamorous article, and it really deals with some fairly minute aspects of running an eBay business, BUT these are the things you need to get right if you want to stay ahead of your competition and maximise your profit!

After all, there is no point in complaining if you’re not prepared to put in the work in optimising and perfecting your business. 😉

Until next time!

All the best,
Andrew

4 Comments
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  1. Hi Andrew,

    Another great article, and for me, it’s the most important part of Ebay selling. If I can manage to get something into Large Letter format, it makes me very happy indeed.

    I’d add two points –

    Large Letter PiP boxes : these are cardboard boxes that give the maximum depth possible for large letter posting, e.g. 23mm usually to give a few mm leeway. OK, if you can get away with mailing bags, great, but you also need to be aware that anything that can shift in transit or bulk out a mailing bag could cause your item to go from Large Letter to Small parcel…so these boxes help, although they do add their own weight. I managed to split one of my products down from a height of 70mm to three piles with depth of 23mm using these.

    Royal Mail account pricing: I guess you steered away from mentioning RM account prices to not overly complicate the article, however there are two VERY worthwhile elements other than price. Firstly, there is no small parcel size…only medium parcel size (at less than Small parcel prices). So you don’t have to try to squeeze your size down. Secondly, it works on average weight. This is perfect for me as I send a lot of <1kg parcels, which averages out all my 2kg parcels down into the lowest band.

    Paul

    1. Andrew Minalto

      Many Thanks for your comment & insights Paul, much appreciated!

      Yep, those PiP boxes are great! Im sure you have seen that even supplements now come in flat packets/tubes, just to go under large letter format 🙂 So the creative side really pays off when it comes to packaging your products!

      Andrew

      1. Simon Margh

        Hi Paul.

        You mentioned that RM account, is also very good because it works on average weight. As it averages out alot of 2kg parcels, into the 1kg band.

        This is only relevant if you send them 1st class post. But if you send them as 2nd class post, you can put upto 2kg in every small parcel, if you use stamps!

        1. Hi Simon,

          As far as I’m aware the 1-2kg small parcel over the counter price is an offer only…although to be fair, it’s been on offer now since before Christmas and doesn’t look likely to change, although you never know!

          The account is still good though as you get a price of around £2.50 (less if send >20 a day), and as I say, you get a larger parcel size of 610 x 460 x 460 I think.

          Definitely worth getting over paying over the counter if you send a few parcels out.

          (also large letter 100g is 63p!)

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