Has this ever happened to you: So, you got all the gear you want added to your cart, and you go to checkout. You plug in your details, and you look at the shipping options, and you pick - wait, they want HOW much to ship this!?
It has happened to us, and more importantly, it has happened to our customers. Hopefully, this article will shed some light on why our shipping rates are what they are, and why we do things the way we do. Buckle up, it’s a long one!
The Dawn of Free Shipping
The first thing to address is, back in the day, Monkey Edge had a "free shipping on orders over $149" promotion. The important part is the "promotion" bit. See, back in the day, we thought it would be cool to offer this promotion as an incentive for people to shop with us. The behind the scenes way this worked was, you placed an order that qualified for checkout, picked the free shipping option, and then we would box up your stuff and ship it out using the most economical option we had for that package that was insured and had tracking (almost always either USPS Priority Mail or FedEx Ground). Turns out, that promotion did really well. SO well that it kind of stuck around for a few years. Much longer than anticipated, but, it kind of became part of the scenery. We didn't really think about it, things were gravy and we had lots of sales, cool.
However, around the time of the 'VID, the world shipping climate changed dramatically:
- The amount of packages getting sent in the world went up exponentially, time for packages to make their journey increased by a lot.
- The amount of people working for the carriers fell off dramatically so there were less people on hand to process things with the new and slower rules.
- EVERYTHING involved from packaging, to workforce costs, to fuel got more expensive.
What does that equal? Higher costs for the carriers and thus a higher price charged by carriers. These costs were enough that, though we kind of just went with free shipping for a long time trying to not worry about it, it forced us to finally acknowledge it. We did the numbers, and it was bad. We did what we could to keep that promotion viable for a while, but every 3-6 months, costs kept going up without ever returning to the old rates. Something had to give.
Our costs from free shipping were FOUR times higher than they were in 2015, and the sales volume was not matching that. So, after a long time, we ended our free shipping promotion in 2021. This makes sense to most people. While it is not really the situation we want, it is the reality, and I think most people understand this aspect of things.
The Problem with Free Shipping
Aside from costs of free shipping, there are some huge logistic issues as well. Remember, your friendly neighborhood Monkey Edge is a small company. As in, you can count every crew member with one hand and not use all of your fingers. Anything that bogs down our workflow is a serious issue, which translates to slower shipping, slower email responses, slower product processing, slower time to get new gear on the site, and not being able to pursue other things to improve our business as easily. You get the picture.
Like we said earlier, the normal operation for our free shipping was, you place an order using free shipping, we then package your order and ship it out using the most economical option that had both tracking and insurance. The key point in this is that WE would pick the option, so folks had to be okay with whatever carrier that may be.
Now, you probably would not think offering a Free Shipping option would add that much work. Boy, would you be wrong.
First off, just getting folks to select it can be a hassle. Now, this is not bagging on anyone, every site is different. The way OUR site handled it, was that you would put all your stuff in your cart and go to checkout. You plug in your address info, and then you get the options of available shipping methods for your order. As an example, you might see something like the following options at checkout:
- FedEx Ground - $15
- FedEx 2 Day - $25
- FedEx Overnight - $45
- FREE US Economy Shipping 3-7 Days
- USPS Priority Mail - $12
Okay, straightforward right? Well, the number of times people did NOT choose the “FREE US Economy Shipping 3-7 Days” was astounding. We don’t know if they assumed that they could pick whatever method they wanted, and we would then just not charge them. Keep in mind, prices were displayed, and on the checkout screen there is an itemized grand total showing the shipping fee and everything. We had all of this in the information on how free shipping worked. Standard stuff. But, people would overlook it for whatever reason, and then pay for a shipping method. Not really a big deal, we can change it. However, this does lead to a few things.
First off, it takes time. If you call us and ask to change your shipping, no problem. But it means going to your order, changing the options, refunding your shipping charges, and re-exporting it with the new invoice to our shipping station. Not that bad. BUT, we also have to make sure that the shipping station has not yet printed a label for your order, because it might be the wrong one now. Which might mean spelunking though bags finding your box if it was already packaged. None of this is really that bad and we will gladly do it, but it takes TIME. And time is something we are perpetually short on.
But what happens when a customer doesn’t catch that they paid for shipping until AFTER the package left? This is a bit trickier. In some cases, if we were lucky, they paid for the method that we would have probably used anyways. Then we can just refund the shipping, and it was like the customer had picked it from the get-go. But, what if they picked a different method, say a FedEx 2Day package that cost us $15 more to ship than the method we chose? We don’t pocket that $15, we paid that to FedEx for a package that is already shipped. That money cannot be refunded to us. Most of the time, we could work something out and meet in the middle, like deducting our normal cost of the free shipping to get a little bit back to the customer. And most of the time things were fine. Other times, we’d get screamed at for “tricking” the customer into paying for shipping, when there was a big huge bold shipping option called “FREE US Economy Shipping 3-7 Days” on the list of options. Regardless if things went smooth or not, it still costs us time.
Finally, the biggest headache of ALL was the part about us choosing the carrier and method for the package on Free Shipping orders. At checkout, we offer all of the options, so if someone is particular, they can pay for that method. However, when it comes to Free Shipping, we pick from a pool of good methods, usually the least expensive one. The number of times someone was mad that USPS F#@%ed up their package, and then yelled at us since we chose it instead of FedEx, is mind boggling. Like, literally people would call us and tell us that a specific carrier was really bad in their area and they never use them. Okay, cool - but how are WE supposed to know? We are not, in fact, mind readers. If the customer had a strong aversion or preference for one carrier over another, we offer those options at checkout.
I won’t even get into the headache of returns or combining orders with free shipping. Basically, not only did we pay a lot of money for free shipping, but it was a non stop headache.
BUT "RETAILER X" HAS FREE SHIPPING!
This is where things get convoluted, and what we hear the most. The short answer, WE ARE NOT THAT RETAILER. Sir, this is a Wendy’s. I don’t care if McDonalds sells Big Macs, I do not. Realistically, the economics of company A usually are not similar to the economics of company B.
For some background info, I want to go over how companies do "Free" shipping, as it is very important for this whole article. Most companies that offer free shipping do so because one of the following reasons (and sometimes it is a combination of them):
- The increase in sales by offering Free Shipping offsets the cost of that shipping (this is how and why Monkey Edge did things).
- The retailer has volume discounts that greatly reduce their shipping costs.
- The retailer masks shipping fees with increased prices/memberships.
The first is easy to see how this works. If having free shipping makes me $100 extra dollars overall, and costs me $5 extra dollars, it’s a big win. However, when you start making $15 extra dollars at the cost of $100, it starts making less sense. Look, we have never aimed to make a "profit" on our shipping prices (more on this in a sec), and we have always come out a little negative regarding shipping costs in the grand scheme of things. It was part of the cost of doing business. But as time went on, the cost of having free shipping just got so high that it blew past the "it's worth it" territory and went to "this is bleeding us" land. Think nearly 6 digits a year in free shipping alone at the time we stopped the Free Shipping promotion. Our costs went up by 25%, but our profits did not mirror that.
The second usually works in tandem with the first. The reality is that Monkey Edge is a small company selling a very limited and niche product. We don’t have mass produced gear and are selling nothing in volume. By contrast, other knife dealers or retailers will ship more packages in one month than we will ship total for a year. Because volume is so high (whether that package has a $1000 knife or a $1 pencil), they get much better rates with certain carriers, and can pass that along to you in discounted or free shipping. The easy to see real-world example of this is Amazon. Have you ever ordered something small from Amazon, like a deck of cards-sized object, and when it got delivered it came in a shoebox sized package? Most carriers base things on volumetric weight, which is weight calculated by the size of the box and weight, not just the raw weight alone. Which generally means, the bigger the box, the more expensive it is to ship. Well, what would cost us $15 to ship, is going to cost a high volume shipper like Amazon or Walmart a fraction to ship. We are small, and our costs are higher.
The third is the most common, and you deal with it all the time you shop online whether you know it or not. Retailers offer you the incentive to purchase from them because they will ship it to you for FREE! What you don’t see is that they are hiding their costs of shipping in the product itself. The best two examples of this are Costco and Amazon. Products purchased through Costco.com can have free shipping to your door. You ever wonder why there is a disconnect between Costco’s website and physical warehouses? You can’t look at what is in stock at the warehouse via their website, you have to actually go to see which each one has on the shelves. Well, one of the reasons for that is because the prices on Costco.com are not always the same as the in-store prices. Why would they charge $10 MORE for my 50 gallon drum of ketchup online versus in store??? Well, remember that “free shipping” they offered on your online purchase? Oh, wait, it’s not really free, is it….
Amazon does the same thing, charges more for certain items than you’d find at other online stores. On top of that, they offer you FREE express shipping if you become an Amazon Prime member…. An actual quote from Amazon on the benefits of being a Prime member:
“Fast, FREE delivery on over 100 million items
Super-fast delivery, tens of millions of items, and flexible delivery options to fit your life. Plus, Prime members get FREE One-Day Delivery on tens of millions of items.”
Let’s just, like, not talk about the fact they charge like $140 to become said Prime member. How “free” is it, if there is a price tag to get that service?
To put on my tinfoil hat for a second: We have been programmed to think we are getting ‘deals’, and that we should expect same day shipping, 2 day delivery, and ‘no questions asked’ returns on everything. Are you more likely to question why a product costs $50 + $10 to ship from Company A, or the same item for $60 with “free shipping” from Company B? We have been conditioned to think one of these is better than the other, but at the end of the day you still paid $60 either way. This is all great for big places like Amazon, they make a LOT of money and can be a little less careful and absorb some more costs. Their big wigs regularly travel to low Earth orbit to have caviar parties and order their thirteenth Bugatti on their lunch hour, or so I hear. But for the rest of us ‘normal’, non-mega corp companies out there, shipping costs are an actual issue and a constant battle.
Anyways, going back to the start. We don’t have the leverage, the profit margins, and the volume to absorb all of the shipping costs. We don’t really like changing prices to absorb those shipping fees. So, we have set up a policy and procedure we do like.
The Monkey Edge Way
So how DO we do things? I am glad I asked. We do it as simply as we can. Each package on our site has a “weight”. That weight is judged off the approximate calculated volumetric weight of the box packaged. That value is then fed through USPS and FedEx’s system, and they spit back a cost to ship that item in that approximate box. It is a little more complicated, there are stepped tiers for when a package might get a signature (which is a flat charge from the carrier), adjustments for added insurance values, packaging costs, etc. But at the end of the day, the goal is to get that number spit back out that is really close to the actual fees we will have to pay, that we then show the customer at checkout. So, we offer everything al la carte: you pay X for the product, you pay Y for the shipping method you want, which totals to Z. No hidden shipping costs, no games. Just realistic shipping costs.
We do a lot of work to try to dial this in as close as we can. There are ALWAYS going to edge cases, where something is volumetrically large/heavy thus expensive to ship (such as hats and tomahawks). There will be times where multiple items play havoc on this, and the combined calculated weight is not quite right because we might be able to package something a certain way that does not increase box size. But, by and large, we are usually really close. Some carriers and some options will have different accuracy, but we are usually pretty close.
In fact, most of the time (ESPECIALLY for FedEx), we are losing money at the end of shipping. For FedEx, we are generally undercharging customers anywhere between 15-30% (and sometimes a lot more) of the fees presented to us. So if our site is telling you it is going to be $17 for FedEx ground, it probably is going to cost us anywhere from $20-$25 to actually ship it in the label fee, plus materials. Because of how complicated this is, there are instances where shipping fees are a little more than what we will end up paying, usually within about 5-10%, but most of the time it is the other way. Our goal is to get it close. I am not trying to charge you an extra $2 on shipping, but at the same time, we are selling luxury goods and it is well within the margin of error we feel for the full process. Remember, some companies charge processing fees and transaction fees, and you may or may not bat an eye at those.
Right now, Monkey Edge is operating on about a 20% loss on shipping fees. Meaning when we average what we charge customers for shipping, our cost to ship is higher than that fee. We ain’t in it to get rich off of shipping charges.
Now that is not to say that sometimes we mess up the math or there is just a super weird combination of items that the system cannot accurately estimate shipping. It does happen, and we are ALWAYS ready to look at things if something seems crazy. But, keep in mind that the world is just different now than it was a few years ago. There is no ground shipping method from AZ to NY for $12. Add in that we don’t really offer crappy economic methods except for really low value orders, and even then we don’t like it. We are only offering you “good” shipping methods at pretty real-world costs (which are higher than ever), and it can be shocking.
So we have this situation that makes us look like the evil company nickel and dime-ing you on everything for the sake of maximum profits - when the reality is we are being upfront with costs while trying to not bleed too badly from costs. I get it, we buy stuff too. And it does hurt sometimes to have to shell out a huge percentage of your item's price just to get it shipped. But, at the end of the day, I would MUCH rather pay more for shipping for a better chance of it getting delivered and better coverage if it doesn’t, than roll the dice and potentially get screwed if things go wrong. And in the current world, things go wrong A LOT! So, with that mentality, we offer the shipping options we do, at realistic prices, and leave it up to YOU to pick what works best and makes sense for you. Yep, I am forcing you to pay for a better method by not offering SH**TY shipping methods. But it is all in hopes of getting you the gear you actually paid for. You might have purchased 10 things shipped with USPS First Class and they all showed up, and that is awesome. However, we ship a lot of things, and the numbers we have tell the story. When your 11th package goes missing… Well, we are just trying to avoid that altogether.
So at the end of the day, we don’t have the cheapest shipping, and we never will. Will we ever have free shipping again? Eh, maybe, if the world changes and shipping costs change. But we are not holding our breath for that day. SO unless we want to start rolling shipping costs into product prices, we are going to have those shipping fees at checkout, and we are going to do our best to keep them from getting too out of hand. Unless, you know, you all want to buy a Monkey Prime membership, for $200/year! But hey, it comes with FREE* SHIPPING!
*Free shipping will ship by the carrier and method of our choice. We may or may not be able to ship your order in a timely manner. We probably will just send you socks by accident instead of what you actually ordered. We’re probably gonna charge you additional fees hidden in product prices, anyways. IDK, I'll bring it all up in our next sub-orbital lunch meeting.