Doing business in America
Being self-employed and running a thriving business was always a life dream of mine. When a huge void in beekeeping accessory suppliers opened up on the Olympic Peninsula across the water from Seattle, I jumped on it and went all in. And when I say "all in" - I mean just that. I extended every credit source I had, used much of my savings and buckled in for a tough few first years. And they have been tougher than I ever imagined.
In a perfect world, the customer orders what they need, the product is shipped, the customer is happy and I make a few dollars to reinvest into the business. One day leads to the next and through careful business planning and saving, things get better and over time, savings grows back and start-up debt lowers.
There are so many things working against local family businesses across America now. High taxes, regulatory issues, this law and that law and the one over there that I almost forgot about. Reports due to this entity and reports due yesterday to that one. Answering customer emails, doing precise accounting, managing both an online presence and a store, walking a fine line between not being able to make payroll and staying in the black. I was okay with all of that; it was accounted for in my business plan and I got very good at using different apps to track, schedule and fulfill.
What I did not take into account was shipping.
Today, everyone expects free shipping. It has become the norm online, with corporate entities willing to play pricing games to artificially drive up prices and building enough volume to get priviledged shipping rates. They have learned to absorb loss and even turn it into an advantage. They have accountants and lawyers and adjusters and actuaries; formulas, statistics and sustained data collection drive their profitability. It's the American way.
Where once the American economy was upheld largely with small business and face-to-face transactions, that method of commerce has been regulated to the very bottom of the stack. The large corporations get all the benefits, tax breaks and support while the mom-and-pops, the very fabric of an America quickly receding into the distance, are left with little incentive, too much subsidized competition from the powers that be and are now considered as more of an afterthought than a serious product or service provider.
When I first started my beekeeping supply business, I offered no shipping. It was simply too expensive. No one would pay an extra $40 to ship a box when they could buy a quote-unquote similar product on Amazon and get free shipping, with no mind to product origin or quality. With free, easy returns and free shipping, it seems to most as if you can't go wrong. And in many cases, that can be true.
To stay competitive, I started offering limited free shipping and paid shipping on other items. Sure enough, sales shot up and before too long I was selling to customers in all 50 states. I was losing a few dollars here and there but that was covered by shipping items with higher margins in order to break even, at best.
Now there's a new problem, another one I hadn't taken into account.
In the last two days, I've lost nearly $1,000 on just three orders where UPS delivered the product so badly damaged that the purchasers could not use them. Broken frames, missing pieces and large holes torn into boxes with parts falling out in transit. I package them as carefully as realistically possible but no amount of cautious preparation can stand up to 20 and thirty pound boxes being thrown haphazardly into and out of trucks, airplanes or other transportion and processing methods. Because of this, not only am I out of pocket by having to refund the purchase price, I'm also out the product, the shipping and all the resources it took to procure, package and fulfill the order.
The next logical question involves the purchase of shipping insurance and yes, I do insure every package. But, as many of you know so well, actually HAVING insurance and filing a successful claim with that insurance are two very different things. One little mistake and your claim is denied. Third-party entities make arbitrary decisions based on photographs and descriptions. With UPS, I have to send a photo of how the box looked at the time of packaging, a photo of the inside of the box showing packaging materials, a photo of the invoice, documents providing the exact correspondence with the customer, photos of the box as it looked prior to opening and photos of the actual damage. This takes a lot of time and asks a lot of the customer as they have to provide all this - if they are even willing to. Most will just take the refund and not put any work into helping you resolve the insurance claim. And who really has all those pictures for every delivery?
As with everything else, it's all about shareholders and the bottom line. Turning a profit. Pending claims. Because of the shipper's (UPS, in this case) carelessness and complete disregard, packages are delivered crushed and with items falling out of them but claims are difficult to nearly impossible to make. There's always a reason to deny it. In many cases (if not most) there's actual motivation to deny it.
I strive to take excellent care of my customers. Refunds are issued same-day, regardless of claim status or customer willingness to help. My pockets bleed red and I go without, working in the red - often for days at a time - just to make up the loss. No one seems to care. I just see decks stacked against me. I have to cancel shipping on a large number of items, losing potential sales and further restricting me to only one sandbox to play in - the local one.
In this time it took to write this, I had two abandoned carts in my online store. Together, the amounted to a little more than $600 in lost sales. Most abandoned carts I see are due to high shipping costs because, hey, I should provide free shipping. Abandoned carts used to bother me a lot more than they do now because in all reality, it possibly saved the customer the hassle of receiving damaged product, it saved me the time and monetary loss due to improper handling and after all, someone else will buy the product down the line anyway, right?
Not if I don't offer free shipping.
