Wisdom Wednesday: The Myth of “Free” Shipping

These days,  if you ask the average consumer what their biggest issue is with online purchasing,  chances are they’re going to say shipping costs.   That’s why so many companies are moving to offering free shipping on orders over a certain amount,  or on any order at all. Consumers have been trained to look for it,  and to expect to receive free shipping on the orders they place.  The desire for free shipping is so ingrained  that most consumers don’t even think about what costs they might be paying in place of the “free” shipping they’re receiving.

At EnMart,  we get asked about free shipping frequently,  but offer it very rarely,  generally only through our e-mail specials and then only a few times a year.  Instead we focus on keeping our prices low and giving our customers shipping options and the lowest rates we can offer.   To us,  this is a more transparent way to do business but,  to some potential customers,  who are focused on the word “free” any shipping cost at all is to high.  While we realize we can’t change everyone’s mind when it comes to this subject,  we wanted to explain why we think as we do about free shipping and why we don’t,  as a general rule, offer it.

First,  let’s talk about what “free” shipping really is.   I like this definition of free shipping from an article about the psychology behind this marketing tool.  Basically,  free shipping is defined as “a marketing technique that removes the stated cost of shipping charges for qualified purchases”.   Notice, it doesn’t say eliminates the charges,  it simply says removes the stated cost,  which means that you see a zero in the shipping line on your invoice.  That cost hasn’t disappeared, however,  it’s just not visible to you.    Someone still has to pay that cost.

One way to pay that cost,  a way that primarily works for massively large companies like Amazon,  is economies of scale.  What this means is that the retailer ships so many packages, and can subsequently negotiate extremely low rates with shipping companies,  and so their burden of shipping cost is less when spread over the amount of business the company does.   Even in the case of the biggest companies,  this is a strategy that doesn’t always pay off.  Amazon only recovers about 55% of their shipping costs,  and they can only shoulder that kind of burden because of their size and the offshoot programs they’ve created to generate additional revenue.

For companies that aren’t Amazon,  or Target or Wal-Mart,  one way to offer free shipping is to hide the cost of the shipment in the price of the product.   The math (in very simplistic form) works like this:

Company A and Company B both sell a blue widget.  It costs $3 to ship.

Company A sells the widget for $4.00 and $3.00 shipping.

Company B sells the widget for $7.00.

The cost is the same – the only difference is that if you buy from Company B,  in the column next to shipping you’ll see this: $0.

We understand that seeing $0 in the shipping column on your invoice may make you feel like you’re saving dollars,  but that isn’t always the case.  The reality is that free shipping is never free,  someone has to pay the cost,  either you as the consumer,  or the company that’s selling you the product, and if it’s the company that’s selling the product,  they’re going to have to recoup that cost in some way.   Always make sure you compare costs and spend the time to ensure that your “free” shipping is really free, and the best value available.  It may cost you a bit of time on the front end,  but you’ll be sure you’re getting the best deal available, whether you pay shipping costs or not.

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Wisdom Wednesday: Pondering Price

money-questions-198x300“How do I price this job?”

“How would you veterans price this job?”

“What would you charge to do this?”

The questions that are asked may differ,  but the intent behind them is the same,  someone please tell me how to price this stuff.  Make me feel that the price I want to charge is reasonable and correct.   Give me some guidance on how I should be pricing my work.  Let me know that what I do is valuable and worth what I want to ask people to pay for it.

We all know that setting a price for something can be difficult.  The dictionary defines price as “the sum or amount of money or its equivalent for which anything is bought, sold, or offered for sale”  which sounds pretty simple.   You want an embroidered hoodie.  I tell you the hoodie, decorated as you wish,  is $20.  You give me $20,  I give you the hoodie.  An easy transaction, right?

In reality,  it’s anything but easy.   First, you have the fact that decoration work is creative work, and creative work has, historically, been undervalued.  Second,  you have the fact that decoration businesses can range from a one head machine run out of a home to a company with multiple locations and hundreds of heads,  with each business having different income needs and pricing requirements. Third,  you have customers who are looking to get the best value for their money, and may have unrealistic expectations of what your work should cost.  Add in the problem of determining the value of one’s own work, let alone telling other people what you think that value to be,  and you end up with wildly fluctuating price scales,  and good decorators doing quality work who most likely aren’t making nearly what they should.

So, how do we reverse this trend?

Reversing the trend,  in my opinion,  comes down to playing the twin roles of educator and advocate.  Education starts with your company’s customers and,  really, continues anywhere your work is discussed either verbally or in writing.   The goal is to inform your customers and potential customers about what it costs to make the items you make,  cost not only in actual dollars,  but also in time and training.  Your work should always be presented as something done by a skilled craftsperson,  someone who has dedicated time and effort to learning their craft and who should be paid accordingly.     The more the general public understands what goes into the work that is being done,  the more likely it is that they will value the work more,  and expect to pay a higher price for it.

Advocacy also starts at home,  or in your shop,  and extends out to the rest of the world.   Being an advocate for the decoration community means charging a fair price for your work,  charging artificially low prices depresses the rates that all decorators can charge, and also teaches the marketplace to expect quality, painstaking work for mere pennies.   Advocacy also extends to how you talk about what you do.   Emphasize the skills involved and the work it takes to learn the craft.  Speak out when you hear or see people complaining about the price of a decorated garment,  explaining why the cost that is being charged is fair.   Be aware of those who will try to get you to do work for exposure,  as exposure can’t pay the mortgage or keep the lights on.  Make it a point to call out the people who underestimate the value of what we,  as an industry, do,  and keep pushing for the respect,  and the fair pricing structure that the industry deserves.

Pricing is always going to be a controversial issue.  A fair price for you might not seem like a fair price to me; there will always be differences in how things are priced by different decorators,  just as there are differences in where and how individual decorators do their work.   The thing to remember is that a rising tide lifts all boats,  and doing a little pricing research in your market before setting prices can help assure that every decorator gets a fair price for the work that they do.

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Wisdom Wednesday: The Work is Art

This WednesMona_Lisa,_by_Leonardo_da_Vinci,_from_C2RMF_retouchedday,  I’m going to share a piece of wisdom that just whacked me upside the head.   It’s a small nugget of wise thought that has to do with how we view embroidery or sublimation or, really, any garment decoration work.

If you go to the Louvre and you view the Mona Lisa,  you’re pretty confident you’re viewing a work of art.   Maybe the art on view appeals to you or maybe it doesn’t but,  regardless of individual taste,  most people would agree that the Mona Lisa is a work of art and it is treated and valued (both monetarily and in the public’s esteem) as such.

What we call art is a very subjective thing.  Most decorators,  if asked where their work stood on the spectrum between real art and not art,  would probably veer toward the not art end of the scale.  Every day,  people who work with screen print ink or sublimation ink or thread or rhinestones or vinyl are told that their work is a commodity,  not art.

Most of them probably believe this is so.

They’re wrong.

Every day I talk to decorators or read posts on social media from decorators who are working their hardest to create beautiful things for their customers.  Maybe it’s finding the perfect color and style of garment to enhance the design.   Perhaps it’s mixing five different shades of green ink to find the one that goes down best and is just the right color.  It could be an hour spent on the phone looking for the exact shade of yellow thread to match a customers logo.   Sometimes,  it’s time spent doing research so that an animal head or a truck tire can be digitized as precisely as possible.  It’s work,  and it’s effort and, often,  the only one that will notice is the person going the extra mile.

So,  why go the extra mile?  Customer service is part of it, giving a customer the best product possible is just good business,  but I think there’s more to it than that.   It’s about pride in the work.   It’s about knowing that the skills are there,  and using them to create the best product possible.  It’s the little nagging voice that says “I can do this better” and won’t shut up until better is achieved.  It’s the artist,  who is also a decorator,  following a vision and creating something wonderful that didn’t exist before.   And yes,  for those who wonder,  there can be beauty in a school spirit shirt or a cap for a ball team or a jacket with a corporate logo.   The art isn’t necessarily in the design, although it certainly can be,  it’s in the execution and the care that’s taken in creating the work.   It’s in the skill that allows that work to be done.

They say art, or what makes something art, is in the viewpoint of the beholder,  but it’s also in the attitude with which the work is treated.   The value of the work starts with those who set that value,  so it’s up to decorators to recognize their work for the art it is and value it accordingly.  It’s true that a sweatshirt created for the Jackson High Jackalopes will probably never hang in the Louvre,  but that doesn’t make it any less of an artistic triumph.

The art of your work matters.

Make sure those who purchase it, and those who sell it, value it accordingly.