Sunday, 27 January 2013

Shipping guidelines for new sellers

Topics covered: Shipping methods, tracking and insurance, creating accurate shipping quotes, seller responsibilities according to EGL Sales Comm rules and Paypal ToS

This is written as a guideline for new sellers to work from.  Every seller has their own preferred method of doing business and the only way to find your own way, is to try it out.  Keep in mind though that with shipping, it's better to be safe than be sorry, so if you're unsure about a policy you want to include in your terms of service (ToS), go ahead and include it.  If you later feel that it's unnecessary and might be scaring away potential buyers, you can always remove it on future posts.

First thing's first, before getting into an actual sales transaction, every seller should familiarize themselves with the shipping options available to them, so they know what they can offer their buyers.

Without going into specific postal services, every country usually has at least 3 tiers of basic shipping services offered for packages; surface mail, airmail and EMS.  Surface and airmail usually do not include a tracking number, although in some countries, you can add one for a small fee (usually a couple of dollars).  EMS is one of the fastest shipping services normally offered through the basic postal services and the most common global standard is delivery within 5 business days and a tracking number is included by default.  Unfortunately, EMS is often also one of the most expensive shipping options and aside from rare occasions, few buyers will usually agree to pay for it, so becoming familiar with the more economical options is a good strategy.

The cheapest and slowest shipping method is surface mail.  It can take anywhere from several days to several months to deliver.  Because of the potential of a long delivery period, this method is usually unpopular.  In addition, most online payment methods have a limited window of buyer protection, so there is an expectation that the item will arrive within this window and if the item has not been delivered within this window, most buyers will choose to file a claim to force a refund as opposed to allowing their buyer protection to expire in order to continue to wait for the delivery.  In most online sales situations, unless the person is relatively local to the seller (ie. within the same state/province), it is generally accepted that sellers will not offer surface mail shipping options.

The next option is airmail, when tends to be a very popular option, and often, the primary or default shipping method a seller will offer unless otherwise specified.

Airmail shipping generally requires anywhere from a couple of days up to one month to reach it's destination.  In most cases, it requires around 2 weeks for international parcels.  This does vary quite a bit depending on the sender's country and the destination country, so always check with the post office for an accurate delivery time.  Most postal services has a chart of delivery time ranges or "delivery standards" available on their website.

Finally, most postal services will offer at least one type of express mail service, or EMS.  The name of this service may vary from country to country, but the generally accepted delivery standards are delivery worldwide within 5 business days, excluding the date of drop off.  There are some exceptions, so the 5 day guarantee may not apply depending on your destination, or on the rare occasion, this service may not be available at all to certain destinations.

The price point for EMS is usually significantly more than surface mail or airmail (often double or more); however, EMS also usually includes more additional services by default, such as insurance and tracking.

One other option is to use a courier service (ie. FedEx, UPS, DHL, etc).  This is usually the most expensive way to ship and often inconvenient for international shipments since the likelihood of the parcel being charged for duty and taxes, not to mention couriers often have very high "handling" fees for their services as a customs agent even when customs does not charge for duty or taxes.  Always confirm with your buyer before using a courier service unless it is specifically requested by the buyer.

Many buyers are not willing to pay the cost of EMS or courier shipping when cheaper methods are available, but keeping this method in mind is always a good idea for those buyers who would rather pay the premium pricing for a faster method with better delivery assurance in the form of insurance and a tracking number.

Tracking numbers and insurance are two of the most important services that most buyers will consider aside from shipping cost and speed.

Tracking numbers refer to a unique code assigned to a package that will allow anyone with the code see the current status of the package as it goes through the shipping process either online or by checking at the post office.  Tracking numbers typically can only be looked up through the postal service used by the seller until it has reached customs for the destination country at which point it can be searched using both country's postal service.  Of course, if the package is being sent domestically (sender and receiver are in the same country), the tracking number will only be searchable within the one postal service.

Registered shipping or delivery confirmation can sometimes be used in place of a tracking number.  It does not provide the full details for every step of the process like a tracking number does, but when the purpose of confirming the package's arrive is to provide protection for the seller (from dishonest buyers, lost packages, etc), this is often enough.  Registered shipping will provide a number similar to a tracking number, but there are not updates every step of the way; however, in the event of a lost package, the post office can perform a full trace to track down the package.  Delivery confirmation provides yet less updates, and usually on confirms when and where the package was sent from and delivered to.  Some postal services can perform a trace using delivery confirmation as well, but this is relatively rare since most delivery confirmation services do not include a method to directly track the package through the postal delivery process.

Insurance on a package is exactly as it sounds.  It provides coverage for monetary compensation in the event a package is damaged or lost.  Some services will have a certain amount of insurance already included, though this amount rarely exceeds $100US.  More often, insurance will be available for purchase for up to a couple of dollars for every unit of coverage (ie $1.20 for every $100 of coverage).

Some buyers may ask for the declared value on their package to be marked down.  This is usually to avoid or reduce customs duty and taxes.  It is against the law in many countries to do so, yet it is common practice regardless.  Agreeing to do so may increase your attractiveness to potential buyers; however, in practice, lowering the declared value can increase the risk to both parties as insurance (included and purchased) will only cover up to the declared value, so in the event of the package being damaged or lost, the post office will not provide reimbursement for an amount higher than the declared value.

Most often postal services will offer other tiers of shipping between these 3 basic ones or different features for each tier (ie. Canada Post include $100 of insurance coverage at no extra cost on all parcel mail for the declared value of the package or $100, whichever is lower), but these vary from country to country, so please check with your local post office or postal website for more details on additional services that are available.

Once you have familiarized yourself with the services and options available to you through your postal service, the next step would be to calculate quotes for your sale posts and buyers.

While it is entirely possible to not provide any shipping prices ahead of time and just look it up as the comments roll in, most buyers are not familiar with shipping rates from every country, so it is usually a good idea to at least provide a list of ranges of shipping costs to give buyers a general idea of how much they should expect to pay for shipping.  Most countries that are geographically close together will cost around the same to ship to if you are shipping overseas.  Thanks to this trend, you don't need to be familiar with shipping costs for every country in the area to be able to provide a roundabout estimate to list in the post.  If unsure, you can always add "please contact me with your shipping address for a quote" so you can double check the cost either online or at a post office before you finalize it with a potential buyer.

If you have a scale at home (small kitchen scales are great) to weight items for a more accurate estimate, be sure to include some wiggle room to allow for packaging materials.  A trick I find useful is to just pile the shipping materials on top of the item itself when weighing for the sake of a shipping quote.  This way, you need not estimate the weight of packaging.

If your scale is not the most accurate, you can calibrate it by using items from around the house such as groceries that have been pre-weighed at the grocery store including packaging (ie fresh produce and my awkward, but reliable favourite, a package of fresh meat from the butcher since they always weight to include packaging and their scales are usually better calibrated than the ones at the regular check out counter).  Finally, to give yourself some wiggle room in case you decide to use a little extra tape or wrap everything inside in an extra plastic bag for waterproofing, simply round up the weight a little when looking up the shipping estimate by adding 50g or so on top of what the scale reads.

Also keep in mind any requests the buyer may have when you create your estimate.  If they want tracking, you will need to make sure that the method you acquire the estimate for includes tracking, or if tracking can be bought as an optional feature for a basic shipping method, be sure to add in the cost of tracking onto the base rate before you give your buyer a quote.

Sometimes, the best way to go about it is to simply provide estimates for different shipping methods and let the buyer choose themselves.  Unless the buyer has a very specific upcoming deadline that they need to receive the package by, it's usually safe to provide a basic airmail rate, a track-able shipping method rate and a track-able and insured shipping method rate.  If the buyer has a deadline they need you to deliver on, check with services at your post office will guarantee a timely arrival, and remember, the initial date of shipment does not count towards the delivery standards (a day 'zero') and if you are shipping after the final pick up of the day, the following business day may be counted as the day 'zero.  In addition, delivery standards are usually in terms of "business days" (Monday through Friday, excluding national holidays, in most countries), so all in all, when the buyer has a shipping deadline, shipping earlier is the best.  Don't put off shipping the package for days after payment has been made assuming that a fast shipment will make up for the initial delay.

If the post office does not have a delivery guarantee for any services, make sure to inform the buyer.  Many buyers are okay taking a small risk when it comes to an item arriving in the nick of time for an event.  It's a risk that all online shoppers have to accept since a speedy delivery can be delayed by weather or customs inspections, neither of which can be controlled by the postal system, and delivery guarantees are often voided in these situations.

As much as these options and services sound great, the best shipping method is one that has been agreed upon and confirmed with your buyer.  Even in the event that you want to upgrade to a faster or more secure shipping method at no additional cost to your buyer, confirm with them before doing so.  There are some scenarios where an upgrade can be a disservice.

Ideally you will have listed how many days you will be able to ship within in your sale post.  If this was not done for any reason, you should notify the buyer around the time they make payment.  If you cannot ship the package for more than a day or two after payment has been made, notify the buyer before sending the invoice or asking for payment.  This is especially important if the buyer expresses any urgency in their need of the item(s).

In the event that an unplanned shipping delay occurs, notify the buyer immediately.  Most buyers are very understanding and unless they have a specific deadline for which they need the item, most will not mind a delay of an additional couple of days as long as they're kept up to date with the situation.  Extended unannounced delays can result in the buyer being allowed to leave neutral feedback for the seller.

If the package is shipped with a tracking number, contact the buyer immediately after the package has been shipped and let them know the tracking number.  If the payment was made by Paypal (as anything other than a "gift"), you can add the tracking information direct to the transaction details.  On your Paypal overview page (or the history tab for older payments), there should be a button with a drop down menu where you can select "add tracking info".  Clicking on the tracking option will open a small window where you can enter the shipping company (ie. FedEx, USPS, etc), enter the tracking number and mark the item as shipped all in one go.

There are some discrepancies between EGL Comm Sales (EGL Sales) and Paypal's Terms of Service (ToS) that may create confusion and make the process of creating your sales ToS difficult.

Some specific points that EGL Sales and Paypal's ToS differ on are:
  • Paypal fees
  • Overcharging for shipping
  • Assurance of delivery
  • Packaging
It is strictly against Paypal's ToS for the seller to charge Paypal fees to the buyer, although paypal will take it's share of fees on the cost of the item and shipping.  While it is not against the rules on EGL Sales, doing so is somewhat frowned upon and if reported to Paypal, this can lead to Paypal restricting access to the seller's account, or worst case, they will freeze the account and disallow further access to the funds within it.  To avoid this problem without having to pay the fees out of pocket, EGL Sales recommends rolling the fees into the price of the items for sale.  As long as you are not charging specifically for Paypal fees, this will reduce or eliminate the cost to the seller without infringing on Paypal's ToS.  Another method is to impose a mandatory "handling fee" on all sales.  Many sellers on online selling platforms (ie. eBay) employ this method to compensate for packaging costs, listing fees and paypal fees; however, since it is rarely done on EGL Sales, few buyers will find this method attractive.

Overcharging for shipping is another way to have the buyer cover Paypal fees without infringing Paypal's ToS; however, Paypal also has a term that does not allow the seller to overcharge on shipping if that is what that portion of payment is intended for.  This can be easily avoided by not listing shipping as a separate line item in the invoice and lumping it in with the item cost, though, EGL Sales generally does not approve of grotesque mark ups (more than a couple of dollars for packaging) and the moderators will likely side with the buyer if it is done and the seller is not willing to refund the excess.  Refusal to comply can result in neutral or negative feedback being left.

One of the most important Paypal terms that can cause a lot of problems for sellers is their insistence that it is the seller's responsibility to ensure safe delivery of the package.  While this is not a frequent problem, a package shipping without a tracking number is open to the possibility of a paypal dispute or paypal claim until receipt has been confirmed.  EGL Sales differs in that since tracking is not mandatory on packages, as long as there is ample proof of shipment (ie. post office receipt and a copy of the shipping form) the seller is considered to have done their part (and if the buyer pushes for a refund via Paypal claim, EGL may rule that the seller can leave neutral or negative feedback for the buyer for forcing the refund).  Meanwhile, Paypal will only accept a tracking number as proof of shipment and without one, the seller basically forfeits any seller protection from Paypal and in the event of a claim being opened by the buyer (due to non-receipt or by a dishonest buyer, pretending to not have received the package), Paypal will automatically side with the buyer and force a full refund of the original invoiced amount.  In dealing with Paypal or EGL Sales, the only way to appease both is to have a tracking number for the package and to hold onto the receipts.  Without one, there is always the risk of being held responsible for loss of the package by Paypal, EGL or both.

One additional point that EGL Sales will require of sellers that Paypal may not have much interest in, is the quality of the packaging job.  When items are being shipped, EGL Sales expects the seller to package the items in a way that will provide adequate protection against damage and breakage.  This may mean a plastic bag to weatherproof or a layer of cardboard to protect fragile items.  The seller is held responsible for any item that has been insufficiently packaged and is damaged as a result and the seller may be  requested to pay for damages on a case-by-case basis.  The lesson here is to be safe rather than sorry.  If packaging will increase the cost of shipping, think ahead and work the weight of the extra packaging into the initial shipping quote.  The weight of a plastic bag or an extra layer of bubble wrap is limited, but the protection it can provide may save you from having to pay much more for dry cleaning or even a full refund and item return if the resulting damage from insufficient packaging is severe enough.

No matter what country you are in and what postal service you are using for your sales, remember to clearly communication shipping details to your buyers and when there are changes, always confirm with the buyer before taking action.  How you ship to your buyers is just as important as providing an accurate description and clear pictures of the items for sale, so be sure not to overlook this important aspect of customer service.

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