Shipping Should Be Free

[GARRIGA]

You keep mentioning that shipping is like rent. This is an inaccurate statement from a business point of view. Rent is a fixed cost. You pay it no matter if you sell corals or don't sell corals. It is also much easier to bake into the cost of a corals since it doesn't change. Shipping on the other hand is a variable cost and is based on the number of orders placed. It isn't based on the $$ value of coral or the number of frags it is based on the order so it is hard to bake into the cost of a coral. If you make shipping free (which by the way it is not free just baked into the cost) then people will be more likely to place smaller orders because there is no benefit in placing a large order. This means I need to bake shipping into the cost of every coral I sell vs baking it into price points like free shipping after $300 which basically equates to a 20% discount for making a large order.

I looked at the shipyourreptile and their base cost is $49 per order so right in line with what most vendors charge for coral so I don't know if that is an example of a better model since people already ship coral for around $50 shipping.

But not paying rent means you don’t carry that burden which is there regardless if you sell 1000 heads or none.

Let me go check SYR. Been a while.

Regardless. If sending out a $100 frag then not paying rent means one can eat the shipping cost and perhaps drum up repeat business or not. No different than an LFS that just sold a can of fish food to the only customer since doors opened at 11am yet might sell $1000 controller next day. Rent a sunk cost. Think of shipping the same. Big picture.

 

[GSPClown94]

Unless one is running a brick and mortar operation with high rent and other costs then shipping should be free unless heavily discounted from retail. Talking about selling frags.

This hobby getting ridiculously expensive and these days that’s a one inch nub being shipped. Shows usually have these small cup containers allowing several nubs the customer can use on the flight back. Can’t the industry find a more efficient way to get these nubs from point A to point B in the smallest overnight container.

I know. I know. I’m dreaming but let’s be honest. These garage farmers aren’t putting up the capital expenditure or running costs of a store and perhaps can absorb some of these shipping costs because we don’t always need to spend the typical minimum order requirement of $200 plus. Might just want that single overpriced nub.

Let's confine this to $100 frags, for example. Let's exclude auction sales and stick to overpriced nubs

You are more than welcome to start selling frags with free shipping. Let me know when your website is up and I'll consider making a purchase.

 

[GARRIGA]

I worked in two pet stores in college. I unpacked many shipments of fish, coral and reptiles over several years. If shipments of corals were delayed, it was usually disastrous. If reptiles were delayed, they were usually fine.

Depends on the reptile and the delay. Point being it doesn't cost more to ship one vs the other using the same box and weight.

 

[IntrinsicReef]

Why not fair. Both can be shipped in the same size box. Both overnight. Both have temperature constraints. Both extremely sensitive.

Temperature sensitivity is only one factor. Many reptiles have slow metabolisms where they eat and defecate with long interims between. They aren't polluting and making their shipping container unlivable as soon as they are placed inside. I'm sure their are exceptions, but I would guess that generally, corals are less robust during transit.

 

[GARRIGA]

I looked at the shipyourreptile and their base cost is $49 per order so right in line with what most vendors charge for coral so I don't know if that is an example of a better model since people already ship coral for around $50 shipping.

I'm getting a higher price. This is crazy

 

[IntrinsicReef]

Depends on the reptile and the delay. Point being it doesn't cost more to ship one vs the other using the same box and weight.

People have said it many times during this thread. Sellers are the ones who are almost always out of pocket for botched shipments. Survival rate is a big factor in shipping costs.

 

[mariano]

 

[GARRIGA]

Temperature sensitivity is only one factor. Many reptiles have slow metabolisms where they eat and defecate with long interims between. They aren't polluting and making their shipping container unlivable as soon as they are placed inside. I'm sure their are exceptions, but I would guess that generally, corals are less robust during transit.

Yet in the industry we want ours shipments delivered overnight and why we tend to ship hub to hub as it gets there first thing in the morning and still I'm not arguing the fact one more delicate than the other. Simply the fact that shipping as a cost should be considered a sunk cost same as rent.

Although checking shipping costs today they do seem out of control.

 

[lbacha]

But not paying rent means you don’t carry that burden which is there regardless if you sell 1000 heads or none.

Let me go check SYR. Been a while.

Regardless. If sending out a $100 frag then not paying rent means one can eat the shipping cost and perhaps drum up repeat business or not. No different than an LFS that just sold a can of fish food to the only customer since doors opened at 11am yet might sell $1000 controller next day. Rent a sunk cost. Think of shipping the same. Big picture.

Shipping is not a sunk cost, you only pay it if you ship something. Sunk costs are something you pay no matter if you sell a product or not. The only way you could convert shipping to a sunk cost is if you could find a shipper that would allow you to pay a fixed monthly fee and they ship whatever you send them. I am not aware of any services like this (there may be some but i'm sure they are for very high volume shippers).

The most feasible way for companies to offer free shipping are if people order a certain quantity because then they can bake it into the cost of the products being sold and not take a loss if people buy alot of cheaper products as individual orders (it still amazes me that this model works for Amazon but then again they do their own shipping so we are talking about a completely different business model)

Look at BRS they offered free shipping on orders over $29 for the longest time. Recently they have changed that to $49 but that also came at the same time they started offering alot more discounts which means they couldn't bake as much shipping into the cost of goods. I use to place lots of orders just over the $29 dollar mark and now I wait till I am over $50. This is basically cutting the cost of shipping in half for them and means they can now offer their constant sales on products. At the same time they increased the order size they also started offering the $3.99 faster shipping option to try and recoupe some of their shipping costs.

If you are a small company I would be very careful offering free shipping or fixed price shipping as it can easily erode any profit you may be making on your product. Make sure you bake it into the cost of the coral being sold (this is why shipped coral should be more expensive). You also need to take into account the time and materials for packaging the order. Your time shouldn't be free (it is a business after all) and shipping materials are not free (boxes, styro's, heat packs etc.). Large orders are much easier to handle for small businesses so giving the shipping as free which basically means you are giving a discount for placing a large order is actually in your benefit since it gets people to place fewer large orders which in the end will be much easier for you to manage.

I think this is a great conversation, but we need to realize that shipping is never free (unless you can convince the fedex's of the world to give coral farmers free shipping) shipping is also a hassle and many people just don't do it for that reason even though they have great corals for sale. I'm spoiled as I have alot of local reefers I can get great corals from as well as lots of garage farms and brick and mortar stores including a large aquaculture facility. For those that don't have lots of options I completely understand the frustration over $50 shipping when all I want is a $20 coral.

 

[GARRIGA]

People have said it many times during this thread. Sellers are the ones who are almost always out of pocket for botched shipments. Survival rate is a big factor in shipping costs.

Service I use carries insurance assuming you ship when they guarantee as they follow temps at both departure and arrival although only applies if shipment late and doesn't cover issues such as mishandling by the shipping company. Cost of doing business and why I don't ship anymore unless buyer accepts responsibility. Seen to many issues of late with increased delays and heard of few boxes where apparently must have been placed in an area where decompression occurred. Best I recall. Plus packages getting lost always stressful. Another reason I prefer heading over to the LFS.

 

[DIYreefer]

But not paying rent means you don’t carry that burden which is there regardless if you sell 1000 heads or none.

Let me go check SYR. Been a while.

Regardless. If sending out a $100 frag then not paying rent means one can eat the shipping cost and perhaps drum up repeat business or not. No different than an LFS that just sold a can of fish food to the only customer since doors opened at 11am yet might sell $1000 controller next day. Rent a sunk cost. Think of shipping the same. Big picture.

So something else that just occurred to me that you are not factoring in. The tone of this post reads as though you are under the impression that the $100 frag is simply an unlimited renewable resource. If I could pump out bigger ticket frags ($100 price range) all day, every day, then I see no issue with what you’re suggesting. Unfortunately that is not the case and the only places that can do so tend to have large warehouses full of grow out systems. For the other 99% of us, we have one reasonably sized parent colony of an individual coral and frag it as it grows. Many corals will only produce a dozen or so frags per year

Yet in the industry we want ours shipments delivered overnight and why we tend to ship hub to hub as it gets there first thing in the morning and still I'm not arguing the fact one more delicate than the other. Simply the fact that shipping as a cost should be considered a sunk cost same as rent.

Although checking shipping costs today they do seem out of control.

You just can’t do that, though. It would increase the price of corals, drastically. Shipping is by far the biggest expense in what I do. As previously stated, if I were to eat the cost of shipping across the board I would be out of business very quickly. What you’re suggesting only makes sense for very high ticket corals that make up a small fraction of the market. For the rest, it’s simply impossible.

 

[GARRIGA]

Shipping is not a sunk cost, you only pay it if you ship something. Sunk costs are something you pay no matter if you sell a product or not. The only way you could convert shipping to a sunk cost is if you could find a shipper that would allow you to pay a fixed monthly fee and they ship whatever you send them. I am not aware of any services like this (there may be some but i'm sure they are for very high volume shippers).

The most feasible way for companies to offer free shipping are if people order a certain quantity because then they can bake it into the cost of the products being sold and not take a loss if people buy alot of cheaper products as individual orders (it still amazes me that this model works for Amazon but then again they do their own shipping so we are talking about a completely different business model)

Look at BRS they offered free shipping on orders over $29 for the longest time. Recently they have changed that to $49 but that also came at the same time they started offering alot more discounts which means they couldn't bake as much shipping into the cost of goods. I use to place lots of orders just over the $29 dollar mark and now I wait till I am over $50. This is basically cutting the cost of shipping in half for them and means they can now offer their constant sales on products. At the same time they increased the order size they also started offering the $3.99 faster shipping option to try and recoupe some of their shipping costs.

If you are a small company I would be very careful offering free shipping or fixed price shipping as it can easily erode any profit you may be making on your product. Make sure you bake it into the cost of the coral being sold (this is why shipped coral should be more expensive). You also need to take into account the time and materials for packaging the order. Your time shouldn't be free (it is a business after all) and shipping materials are not free (boxes, styro's, heat packs etc.). Large orders are much easier to handle for small businesses so giving the shipping as free which basically means you are giving a discount for placing a large order is actually in your benefit since it gets people to place fewer large orders which in the end will be much easier for you to manage.

I think this is a great conversation, but we need to realize that shipping is never free (unless you can convince the fedex's of the world to give coral farmers free shipping) shipping is also a hassle and many people just don't do it for that reason even though they have great corals for sale. I'm spoiled as I have alot of local reefers I can get great corals from as well as lots of garage farms and brick and mortar stores including a large aquaculture facility. For those that don't have lots of options I completely understand the frustration over $50 shipping when all I want is a $20 coral.

I'm not literally saying shipping is a sunk cost. I'm saying for those not paying rent to assume it is considering they don't have the cost of rent.

At a minimum perhaps eat some of the costs on an items such as an overpriced 1" frag. Would be foolish business to spend more on shipping then revenue sought.

 

[Reefer Matt]

The moral of the story for me is that I don’t charge enough! Lol! But I don’t ship either. I average about a $13 gross profit for every frag I sell at trade shows. I am negative after figuring in table fees, utilities, travel costs, coral costs, etc. But it’s not my livelihood, just a side gig to get out and see the Reefers. But I also don’t expect everyone else to be so generous.

 

[lbacha]

I'm not literally saying shipping is a sunk cost. I'm saying for those not paying rent to assume it is considering they don't have the cost of rent.

At a minimum perhaps eat some of the costs on an items such as an overpriced 1" frag. Would be foolish business to spend more on shipping then revenue sought.

Many places do this already they just have a minimum order size which makes alot of sense for smaller companies. Most people buying these overpriced frags will easily hit the 250-300 minimum order for free shipping.

 

[GARRIGA]

So something else that just occurred to me that you are not factoring in. The tone of this post reads as though you are under the impression that the $100 frag is simply an unlimited renewable resource. If I could pump out bigger ticket frags ($100 price range) all day, every day, then I see no issue with what you’re suggesting. Unfortunately that is not the case and the only places that can do so tend to have large warehouses full of grow out systems. For the other 99% of us, we have one reasonably sized parent colony of an individual coral and frag it as it grows. Many corals will only produce a dozen or so frags per year


You just can’t do that, though. It would increase the price of corals, drastically. Shipping is by far the biggest expense in what I do. As previously stated, if I were to eat the cost of shipping across the board I would be out of business very quickly. What you’re suggesting only makes sense for very high ticket corals that make up a small fraction of the market. For the rest, it’s simply impossible.

I don't know how large your operation is and perhaps I should have been clearer in what I mean by garage farmer. I'm speaking to those where they produce enough to make a living off their farms yet aren't burdened with the overhead of an actual store. I'm not referring to the guy selling a few here and there that perhaps has exhausted the local stores or in there area already oversupplied for local demand.

For example, when I produced boas out of my garage the retail value north of $50k plus yet I chose to wholesale to local distributors mostly because I didn't have the time for retail. Out the door these sales were around $20k. This wasn't my only means of income nor how I paid my mortgage. To me this was a side kick therefore in terms of this conversation I'm also not the targeted audience. In reality, I was a hobbyist size wise.

 

[GARRIGA]

The moral of the story for me is that I don’t charge enough! Lol! But I don’t ship either. I average about a $13 gross profit for every frag I sell at trade shows. I am negative after figuring in table fees, utilities, travel costs, coral costs, etc. But it’s not my livelihood, just a side gig to get out and see the Reefers. But I also don’t expect everyone else to be so generous.

Used to do trade shows long ago and found out I had more fun showing up as a buyer or reminiscing with old friends than vending. I'm back to vending because I'm liquidating my breeders and some shows I don't sell anything then next show first sale couple of thousand. Rather just setup my dream tank, go fishing and traveling vs dealing with the hassle of retail or wholesale. I'm also vending because I have special genetics and they become your pets and last I want is FedEx or UPS to send them off to lost in space to never be seen again.

 

[GARRIGA]

Many places do this already they just have a minimum order size which makes alot of sense for smaller companies. Most people buying these overpriced frags will easily hit the 250-300 minimum order for free shipping.

Understood. Just checked and WWC still has flat fee of $39 on items below $250. However, they also pay rent.

 

[lbacha]

The moral of the story for me is that I don’t charge enough! Lol! But I don’t ship either. I average about a $13 gross profit for every frag I sell at trade shows. I am negative after figuring in table fees, utilities, travel costs, coral costs, etc. But it’s not my livelihood, just a side gig to get out and see the Reefers. But I also don’t expect everyone else to be so generous.

Yeah if I had to guess most of the garage/ spare room sellers would be out of business if people stopped buying 1" frags for insane prices. Luckily coral propagation doesn't have an equivalent to tissue culturing that is taking place with plants.

During COVID everyone started selling rare plants for crazy amounts of money. The problem is the big horticulture companies that sell to your home depots and walmarts also jumped on this fad but they used tissue culture to create plants extremely rapidly and cheap. All these rare plants that people were propagating and selling cuttings for $100+ were now available at walmart for $20 for a full big plant. This put all these mom and pop type shops out of business as they couldn't sell small cuttings at a huge profit vs the time they spent growing the plant. Now the only people you get plants from are the true hobbiests that grow plants for fun and have extras to trade and sell on occasion.

 

[Reefer Matt]

Used to do trade shows long ago and found out I had more fun showing up as a buyer or reminiscing with old friends than vending. I'm back to vending because I'm liquidating my breeders and some shows I don't sell anything then next show first sale couple of thousand. Rather just setup my dream tank, go fishing and traveling vs dealing with the hassle of retail or wholesale. I'm also vending because I have special genetics and they become your pets and last I want is FedEx or UPS to send them off to lost in space to never be seen again.

That’s cool. I go to some other local shows too and hang out as a customer. I don’t get into them all as a vendor. I’m a nobody, and a small outfit. People don’t understand all the hard work that’s involved in being a vendor at a show though. It’s an all day affair, and there are no guarantees of making any money.

 

[Reefer Matt]

Now the only people you get plants from are the true hobbiests that grow plants for fun and have extras to trade and sell on occasion.

Yeah, that’s how I am. A “Hobbyist Business”, but 100% legit. I enjoy having a lot of coral around, I don’t see them as a product to move.