21 March, 2012

On International Shipping


Guest post by Annette:

"Buy more! Save more!"

That tag line has always annoyed me in its urging unnecessary consumption, concomitant with boasts like, “I bought this backpack for $250 on sale, and it was a third off, so I saved $125!” - when the buyer already owns five other backpacks. Really?

In some cases, however, the encouragement is based on truth and is not simply a ruse to trick the customer into buying more. For our international customers this is the case.

We've shipped internationally since VO began. Yes, it costs us a bit in labor, and yes, it's a headache, and yes, there are delays in getting quotes to the customer and collecting the shipping. Our procedures for international shipping have never changed: you must place an order, we tell you how much postage will cost once we've packed and weighed it, you can reject or accept the shipping options, and we'll issue an immediate merchandise refund you if you cancel. We've investigated this process time and time again, and we've always concluded that, given the weird size-to-weight ratio of many of our products, this is the fairest way of assessing postage costs.

It is usually better for international customers to order more at one time, for two reasons. First, the shipping cost per pound decreases as the total weight increases. This is especially the case for orders that we can ship via US Postal Service. Second, however, is a more complicated consideration called “dimensional weight” that kicks in when we use air express services like Fedex. Dim weight is calculated by the box measurement, and shipping is charged on the higher of the two weights, dim vs. actual. For example, the weight of a box with a single set of fenders is 4 pounds, but its dimensional weight is 24. So it is to the customer's advantage to order more items that can be stuffed in the box, since s/he's paying for 24 lbs worth of shipping. As the box size increases, obviously, the dim weight increases, until the story gets really gruesome with frames.

Thankfully, we have a very understanding and responsive team at Fedex, so when we scream that we're losing orders because shipping is too expensive to, say, Australia or Austria, we are not ignored. Effective last week, depending on weight/size/cost of your orders, international customers are receiving rate quote emails for both USPS and Fedex, with a strong recommendation for one or the other. In most cases, Fedex is beating USPS on both service and price except on the lightest, smallest packages. So, in terms of shipping costs: buy more! save more!

I had to laugh when I saw today's NewYork Times piece about major retailers and their discovery of an international market. Oh, to be a scrappy upstart (h/t Pete Campbell).

17 comments:

Corey S. said...

I would like to order more things at a time, living in Canada, but often you are out of stock on several of the things I wish to purchase.

So I'm forced to either wait for long periods, and hope that you get all the items I want in stock so I can place an order, or I have to buy things individually.

Also, I'm often competing with other customers for those items once they are back in stock, and so if I wait too long, they'll be sold out again.

Sorry for the rant. I really love your business and products, but it's frustrating dealing with a small business in another country sometimes.

Keep up the good work.

Alex said...

An interesting post. I live in New Zealand and frequently buy bicycle parts online. Why? Because some parts are hard to find and they are all very expensive here. But I mostly patronise shops in the UK like Evans and Chain Reaction because they cater so much better to international clients - you can select the prices to display in your currency, and they both offer free international delivery if you spend over a certain amount. But US suppliers either don't offer international delivery at all or charge a lot for it. I appreciate that VO do, do it, but I wonder how UK companies manage to provide it cheaper?

Calvin said...

I am a long time, happy, VO customer, but..........
you only see one side of international shipping. on my last order (Feb 2012) I paid you $30 for shipping and had to cough up another $30 at the door for brokerage, tax, etc.
From time to time I have to deal with another american bicycle retailer that ships to me (in Canada) using UPS International. The charge at the time of order is close to the same as FedEx but as this retailer says "The price you see at checkout is the price you will pay, with nothing due at delivery!" the 14 orders I have done with them in the last 5 years has proven this out.
A $100 order for a chainring and some grips cost $15 to ship. suspension forks plus tires and bars was $33.

In my experience the premium service from UPS, FedEX, etc is significantly cheaper than their budget service.

John Hurley said...

Wouldn't $125 would be half off of $250? A third off would be $83.33. I'm interested in the Fedex/UPS option for international, because I've always found them impossibly expensive for shipping a pair of rims to Australia. USPS is too expensive as well, all due to the size of the box, and what I can only imagine is a limitation imposed by the Postal Service of the destination country. Japan, for example follows the 108-in rule, whereas Australia follows the 79-inch rule.

Matthew J said...

Alex -

In my experience buying from UK suppliers, shipping was via the Royal Post, not a private service. For the time being anyway, the Royal Post remains an affordable option because the UK subsidizes its operations.

The United States political climate is not only hostile toward subsidizing the U.S. Postal Service, it actually imposes requirements on the service that make it difficult to compete on price domestically let alone internationally.

As a result, small U.S. exporters can only use private for profit services that do not allow them to offer discounted shipping their UK counterparts can.

bubba said...

John Hurley-

I think the theoretical backpack was $375 full price. 1/3 off took $125 off the price, down to $250. Not that it matters at all....

Dan said...

Great news. I've ordered from you a number of times for shipment to New Zealand. What I appreciate with you is that you are willing to quote a freight price unlike some of your competitors who have a fixed minimum price for international freight. I was once quoted $50 to ship a tiny part, supposedly because it "had to be tracked".

John Hurley said...

Right you are, bubba: I see now the pack in the example was bought for $250, which was the price AFTER markdown, and yes, it doesn't matter.

Alex said the high cost of international postage is due to lack of public subsidy of US Postal Service, vs UK Royal Post, but there must be more to it than this.

You can send a package up to 108" girth+length at fairly reasonable Express Mail rates to a number of countries including the UK and Japan. But if you want to go to Australia, New Zealand, Thailand, etc., that same box is suddenly too large. The only choice offered is Global Express International which is three-day limousine service and terribly expensive.

I've sent small packages all over the world using USPS First Class International, so they don't mind going, and going cheap. I've sent bigger boxes to Japan and Europe using Express Mail. The problem must be the destination country setting limits on the box size.

Alex said...

John - that was Matthew J that said the price difference is was due to postage subsidies. I would just like to point out that Evans and Rapha (who both offer free international delivery) use DHL not The Royal Mail so I don't think that is the reason. Maybe VO should have a chat to DHL? But then again perhaps it's just the size of the operation, have a look at this video to see how big Chain Reaction are... http://www.chainreactioncycles.com/Help.aspx?HelpTopicID=112#package

Anonymous said...

Another reason to buy more if shopping internationally is the customs fees. When an order is imported, you normally pay the sales tax as a percentage of the value but also a flat handling fee for processing this and collecting your money. Since this is a flat fee, it does not increase as the value of the order increases, and so makes less of an affect on the price of larger orders.

Jim said...

I'm waiting on a bag, a pair of hubs, a stem and a bunch of other items right now! I didn't mind the system at all for getting international system. In fact I rather liked the human touch on top of an automated system.

VeloOrange said...

To John Hurley: don't be fooled by USPS forcing you into the GXG service. We process our international postage labels through Endicia, so we frequently double check acceptable box sizes through them. In our experience, Endicia seems to know what USPS allows better than USPS does.

The 79" limit, defined as length plus girth, as shown on the USPS web site for some countries is questionable. It is a point of much derision in our office. We routinely ship rim boxes, for example, (27 x 27 x 7, or 95") to countries that USPS says are limited to 79". Our smaller frames can also go postal to these countries, with box sizes that calculate to 102-105".

To Calvin: I am aware that there are means with Fedex by which we can quote shipping as all inclusive, especially to Canada. At this stage, however, given our staff size, it is a bit much for us (meaning "me") to handle, though we may opt to do it in the future. As well, Endicia has been considering a service that allows for this, though they don't seem to be near launching it yet.

Annette

Matthew J said...

Alex - Probably a combination of size of operations, and the fact the Royal Post provides such affordable competition*, and in the case of Rapha in any event, the cost of shipping is more than made up with their margins.

*Assuming of course the Royal Post does not have some quantity limits. I have only ever bought from SJS and Royce in the UK, which may not be the biggest international shippers.

Orlando said...

@ Calvin - I'm in Canada too, and eventually figured out that if I do my own brokerage I can save a substantial amount of dosh. It does require some extra time and effort though.

Anonymous said...

The most practical thing you could do for us customers here in Germany would be to stuff a UK retailer (preferably small personal and reactive) with all you got plus service. It is so much easier to order inside the European Community, not having to deal with customs etc. I really like your stuff, but it is always a drag to line up in the customs office for an hour or so .....

Anonymous said...

Shipping to Canada is more difficult than it should be. Is there anyway shipping to Canada can be more affordable? Too bad you did not open a west coast distribution centre in Vancouver. It would have been awesome. My husband and I recently ordered a bunch of stuff, but he was impatient so had it sent the fastest fedex way which cost a fortune and then we had to pay taxes on top. Fedex doesn't work very well in rural areas either and had to leave cheques taped to the door and then have the shipment sitting outside alone all day. He regretted being impatient, but we used to choose the cheapest method and sometimes it would take months for items to arrive as it would sit in customs forever. So one one hand the fast courier rate gets the item through dreaded customs, but you pay! We also have been waiting for certain items to be back in stock, which arrive and suddenly go out of stock again.
While Vancouver has plenty of VO dealers, they carry very little product and seem to moan about doing orders and complain about the cost. And this is with a canadian distributer! It would be nice for at least one shop in any given city to have a proper velo orange section.
I guess it's just a bit annoying because we are the same continent, not very far away and are supposed to have some sort of free trade.

Ame said...

Hi i live in Australia and have received two orders from you guys in roughly 7 days. That is record time to me- and i chose the cheap as chips option each time. I only wish now i had have ordered more in each order- as i keep finding things you stock that i like so much- cheers. Ame