How mega-corporate shipping prices have programmed the public to expect small businesses’ shipping rates to compete with the big guys.
Thanks to corporate giants like Amazon, small business owners struggle daily to validate their shipping costs to the consumer. $3.99 is the norm for shipping these days. It is a veritable societal maxim that paying anything over $4 is crazy.
If I was not a small business owner with products that require extensive means to ship (i.e insulation and gel ice packs, in addition to overnight or 2-day shipping to prevent melting) I would not be aware of this issue. But I am a small business owner, and the ability to ship nationally or even internationally affordably has been a pipe-dream of mine since the beginning, 6 years ago.
Education is key to understanding issues like this, and my goal here is to share some of my personal experiences to shed some light on this major deterrent to both business development, expansion, and ultimately, customer experience. First, let’s look at the established definition of a small business, or should I say in my case, micro business, because I do not yet meet the established notion of what a small biz is. A small business is defined as such via wikipedia:
” In the United States, the Small Business Administration establishes small business size standards on an industry-by-industry basis, but generally specifies a small business as having fewer than five hundred employees for manufacturing businesses and less than $7.5 million in annual receipts for most non manufacturing businesses.”*
Ok, so my business has less than 5 employees, and we make a little less than $7.5 million annually… LOL. I jest. We make less than $1 million currently, and define ourselves as a craft chocolaterie. So small businesses operating on a smaller scale with the same needs for deliverable outlets are left in the dust. We are invisible in the eyes of corporate account reps, not even worth a breath over the phone.
Even the scale for measuring how we define a business is based on large, based not on a cottage industry or artisan level. This same scaling is the root of the problem that small producers have when trying to establish themselves in the marketplace. If you are too small, when you need the discounts the most, you do not have the quotas to back it up.
There is a major shipping monopoly on a global level. If you are not a mega-corporation, or medium to large business, nay even a small business and literally shipping out hundreds of packages DAILY, the price structure for small developing businesses is truly insane.
These numbers are the necessary quotas that I have received from every major shipper, including DHL, UPS, FedEx, Ontrac, to name a few. If I am not shipping out hundreds of packages daily, then my prices are triple that of a larger company.
My solution to this quandary? GSO for the pacific northwest at $15 for overnight or 2 day max, and USPS for the rest of the country, at $20 for 2 day. This is a killer rate for chocolate shipping. Fedex and UPS are $62… yeah, you read that right.
I still get a sticker shock response from people when it comes to giving them the shipping rates, which is understandable, as we have been programmed the last several decades to think all shipping should be as cheap as Amazon, or free!
How do companies globally ship frozen steaks, caviar, or lobsters? Not cheaply. Many components make up these rates, including: packaging, gel packs or dry ice, insulation, and shipping provider.
My intent with this post is to share a little small biz insider perspective in regards to the stakes set high against small companies, and to help folks consider that shipping a perishable product in 2 days across the country cannot be as cheap as a used book, or vitamins from a discount drop-shipper.
Support local, support small. With time and consistency, we will get to the point of meeting the ludicrous corporate quotas to give you a break on shipping.
Peace, health, and radiance,