Postage costs too high - cant compete?

lightspeed

Hi

Im just curious if there are people in Ireland who have found it possible to make a success selling via ebay or/ and amazon or online in general?

Considering Ireland is such a small market, the majority of items sold on ebay or amazon are generally in the UK.

The main obstacle i see is the huge cost of postage in Ireland compared with nearly all uk sellers who offer free postage with royal mail, at prices that seem far too low to make a profit of any kind.

For example ive seen some of the biggest sellers on ebay selling phone cases for as little as £0.99 with free postage. I see even large items such as bedsheets or boxed items with free postage.

I understand that items coming from China are sent via bulk in large ships and so they can sell items at free post.

However, from looking at royal mail website, I can see that there are volume based discounts but still doesnt explain how free postage is offered.

Is there anyone cheaper than An post for sending small or lightweight items to UK that im not aware of?

Atlantic Dawn

There's few operators in Ireland able to compete that's for sure, general postal charges are crazy, many multiples of UK prices never mind China. One success story though that would come to mind would be Micks Garage, not sure what deal they have but they offer free delivery to both UK and Ireland for orders of €40/€50, clearly they have some kind of volume discount.

fiload

They are selling them at cost price, around 45-50p for the item and the rest in postage. They are only using those items to build up their feedback score. Don't try to make profit in that market, go for higher value items. Branded items from last season, niche items etc. Research and add up your potential costs for any new item you would sell to make sure there is a good margin in it, only then you should go for selling it.

eeguy

Do An Post offer volume discounts?

What's the criteria?

Sleeper12

eeguy wrote:

Do An Post offer volume discounts?

Not that I know of. I have a mail order company selling goods mostly to Ireland but a few to the UK. I'm open to correction here but I think the cheapest rates for a courier company is around €5 or so. This means letters and small packages can only go on post.

hairyslug

eeguy wrote: »

Do An Post offer volume discounts?

What's the criteria?

They do, we had it in my last employers but we were shipping a minimum of 200 a day, all internal.

Dhl came back to me with some good quotes for export and there are a few middle men companies than can offer decent prices for Irish shipping, I was getting prices for items above 5kg, not sure what it would be like for small items.

Going back a few years, to match competition I had to ship without registered post, about 99% of orders got delivered.

Is there a chance any of the UK sellers are selling with FBA, shipping to Amazon in the UK is dirt cheap, small profits but increased market

Sleeper12

hairyslug wrote:

Going back a few years, to match competition I had to ship without registered post, about 99% of orders got delivered.

I find an post loosing 1% of my post. Is this the norm? It means that I have to send the same item again out of my own pocket

hairyslug

Sleeper12 wrote: »

I find an post loosing 1% of my post. Is this the norm? It means that I have to send the same item again out of my own pocket

If it's purely internal, I would be querying that.
In relation to the last place I worked in, it was rare to have a parcel missing, it was obvious what we where shipping and they were high priced items. Everything we shipped was tracked.

We did eventually move over to DPD but it was down to IT issues and customer care.

For myself personally, the majority of my orders went to the UK, Germany and France, very rarely tracked and nearly all got there.

lightspeed

eeguy wrote: »

Do An Post offer volume discounts?

What's the criteria?

i tried to find that out a while ago without success.

My understanding is that you need to be posting at least 200 items at a time but that seems to be only relating to post in Ireland and not international post.

http://www.anpost.ie/AnPost/Downloads/Anpost/200_items_upwards_Bulk_Discounts_For_Mailers_An_Post.pdf

There are bulk discounts for international Bulk Mail Service

http://www.anpost.ie/anpost/downloads/anpost/An_Post_Interational_Bulk_Mail_Service.pdf

There is however no indication of how many items you have to post to avail of this discount.

http://www.anpost.ie/AnPost/GeneralTemplates/ProductsAndServices.aspx?NRMODE=Published&NRNODEGUID=%7b11C62696-973B-4B68-B551-17AF7DA856EB%7d&NRORIGINALURL=%2fAnPost%2fMainContent%2fBusiness%2bCustomers%2fOur%2bBusiness%2bServices%2fInternational%2bBulk%2bMail%2bService%2b%28IBMS%29%2f&NRCACHEHINT=Guest#howdoesitwork

http://www.anpost.ie/anpost/downloads/anpost/An_Post_Interational_Bulk_Mail_Service.pdf

Obviously for someone trying to compete starting a business is not going to be posting 200 items or above so its of little use in reality.

I emailed An Post a while ago querying the amount and any other conditions to avail of international bulk discounts.

They emailed me back asking where i lived as i would need to contact the manager designated to my region. Im from the fingal area and was emailed back the mobile number for someone to contact.

I phone this mobile number several times and left a voice mail on different days but never got an answer or a reply so i just gave up at that point.


One main difference I see between An post and Royal mail is RM also seems to offer discounts for either bulk mail or if you have over 1000 items per year, or spend at least £5000 per year.

http://www.royalmail.com/business/services/sending/bulk-discounts

Its quite frustrating as if the government wanted to do more for small business and entrepreneur, they should be looking at how noncompetitive we are particularly for international postage costs.

eeguy

Sleeper12 wrote: »

I find an post loosing 1% of my post. Is this the norm? It means that I have to send the same item again out of my own pocket

1% is a huge loss on postage alone. I wonder is it a postage issue or a customer issue. Perhaps its an issue with your addressing system?

Sleeper12

eeguy wrote:

1% is a huge loss on postage alone. I wonder is it a postage issue or a customer issue. Perhaps its an issue with your addressing system?

I address and post them myself. These would be envelopes. I assumed some of it would be customer trying it on. I've had mail returned saying incomplete address with a full country addresses. Some with eircode on it. Not lots but enough for you to say what is an post playing at

eeguy

Sleeper12 wrote: »

I address and post them myself. These would be envelopes. I assumed some of it would be customer trying it on. I've had mail returned saying incomplete address with a full country addresses. Some with eircode on it. Not lots but enough for you to say what is an post playing at

Handwritten addresses?

Sleeper12

eeguy wrote:

Handwritten addresses?

Yes. I am autistic and dyslexic but they are addressed properly and you can read the address. I've shown them to people afterwards and they say they were fine.

eeguy

Sleeper12 wrote: »

Yes. I am autistic and dyslexic but they are addressed properly and you can read the address. I've shown them to people afterwards and they say they were fine.

Just thinking its probably something to automate to a label template.
We used to have a macro to pull address information into a label template in Word.
The addresses were printed onto an A4 label sheet, then stuck onto the parcels.

Much quicker and less prone to mistakes than by hand, although we'd usually have to correct customer's spelling. :rolleyes:

That sort of process also suits An Post's systems as the addresses are more easy for the machines to read.

hairyslug

Have you a return address on it, the automated reading machines in an post read the first address they see.
We had a franking machine with our address on it and if we put the shipping label in an incorrect position, it would come back to us

The J Stands for Jay

Sleeper12 wrote: »

I find an post loosing 1% of my post. Is this the norm? It means that I have to send the same item again out of my own pocket

1% is pretty good going when using an post.

antoinolachtnai

It does seem from the statistics published by Comreg for mail deliveries that 1 percent (or slightly more) of correctly addressed 'flat' mail in tests does not arrive at its destination within 3 days.

What presumably happens here is that the item has been accidentally put into the wrong post box and is then thrown away by the unintended recipient.

There is also a thing called 'friendly' fraud, where customers claim they have not received an item when in fact they have. If it only happens once with a particular customer, not much you can do about it. It is just shrinkage that you have to absorb.

So around one percent loss is what I would expect.

Sleeper12

antoinolachtnai wrote:

What presumably happens here is that the item has been accidentally put into the wrong post box and is then thrown away by the unintended recipient.

antoinolachtnai wrote:

There is also a thing called 'friendly' fraud, where customers claim they have not received an item when in fact they have. If it only happens once with a particular customer, not much you can do about it. It is just shrinkage that you have to absorb.

This sounds logical to me & I believe both of these are the reason I'm down 1%
On a plus side you get to really impress your client by re posting without any debate. This can lead to them passing your business details to friends.

lightspeed

Guys can we keep it on topic which is regarding how to compete with high costs of postal charges.

At this point, im of the opinion that there is something underhanded in play on ebay, perhaps money laundering of criminal proceeds as ive read elsewhere.

Take the below for example

http://www.ebay.ie/itm/MAIL-LITE-LITES-PADDED-BAGS-ENVELOPES-ALL-SIZES-24H-COURIER-WHITE-GOLD-/291640194544?var=&hash=item43e71c35f0:m:mG_beKZZixUkR-FlmK1SWyw

They offer Sealed Air branded mail bags with free postage at costs so low that it works out at just over £0.09 per envelope even if you order as many as 10000.

I had a look at there website which is even cheaper and for 200 of the smallest envelope its working out at less than £0.05p per envelope.

Not only that but they also offer 48 hour delivery which i assume costs more and their website says they are vat registered so im guessing they paying vat.

Typically everything can be got for less from china especially with small items given that they can truly send bulk items with no postage costs being incurred.

However, looking at non branded padded envelopes from china, the cheapest i see is around £0.06- 0.08p.

So think about that, this seller can sell large boxed branded item offering 48 hour delivery and pay vat even where quantity ordered is as much as 10,000 at much much less than it costs to get from China.

Sleeper12

lightspeed wrote:

They offer Sealed Air branded mail bags with free postage at costs so low that it works out at just over £0.09 per envelope even if you order as many as 10000.

If I am reading description correctly it is £.0.09 for the envelope by ordering 10000. They say 24 hour courier service but that is to get the envelopes to you. You still have to pay to post the envelopes.

eeguy

lightspeed wrote: »

Guys can we keep it on topic which is regarding how to compete with high costs of postal charges.

Don't know how relevant that post is.

From the picture it looks like someone picked up a stock of envelopes for next to nothing and is just selling them on.

Judging from their other items, i'd imagine the seller is someone who buys job lots at liquidation auctions and it piecing them out on ebay for profit.

lightspeed

Sleeper12 wrote: »

If I am reading description correctly it is £.0.09 for the envelope by ordering 10000. They say 24 hour courier service but that is to get the envelopes to you. You still have to pay to post the envelopes.

From Ireland yes but if you go to the postage tab on ebay and choose United Kingdom, it says its free postage.

So again makes no sense at all as to how this seller can sell at such low prices. I dont think he getting them from liquidated stock as that would suggest its only a short term price but this seller is long established at those prices.

antoinolachtnai

Envelopes are pretty cheap to make. There is traditionally a lot of mark up on them in the supply chain. The prices look sustainable to me. There's not much margin in it but I wouldn't say it's about the margin. eBay is an incredibly competitive marketplace.

Envelopes are the sort of item that is probably most economically manufactured in Europe, close to the paper mills and the market.

Courier costs are also pretty cheap. Delivery is around £3/€4 per parcel at scale.

lightspeed

antoinolachtnai wrote: »

Envelopes are pretty cheap to make. There is traditionally a lot of mark up on them in the supply chain. The prices look sustainable to me. There's not much margin in it but I wouldn't say it's about the margin. eBay is an incredibly competitive marketplace.

Envelopes are the sort of item that is probably most economically manufactured in Europe, close to the paper mills and the market.

Courier costs are also pretty cheap. Delivery is around £3/€4 per parcel at scale.

You may be right about it being more economical to manufacture envelopes in EU than getting them from overseas.

However, this company is not manufacturing its own envelopes. The mail lite mail envelopes they are selling are made by "SealedAir" who are a large branded manufacturer based in North Carolina, USA.

RM does seem to be cheaper for UK residents even more so than An Post is for Irish residents but still difficult to see how they can afford to offer large quanity of parcels with 24-48 hour delivery time and pay vat.

hairyslug

Just went into the RM site, £3.95 for a 2kg parcel with POD. (2nd class post)
The equivalent with An Post is €12.90
Both parcels shipping internally.
Nothing we can do to compete with that.
If you're shipping regularly outside Ireland, may be best to open an account with a courier company (don't accept their 1st offer for charging)

jimmii

Having moved to the UK things are set up so much better. Small discount for buying online and of you're shipping decent numbers you can get some very attractive rates. Couldn't believe the difference on the <5kg prices when we started shipping.

lightspeed

hairyslug wrote: »

Just went into the RM site, £3.95 for a 2kg parcel with POD. (2nd class post)
The equivalent with An Post is €12.90
Both parcels shipping internally.
Nothing we can do to compete with that.
If you're shipping regularly outside Ireland, may be best to open an account with a courier company (don't accept their 1st offer for charging)

Im at lost as to how its something highlighted more in the media as like you said there really is no competing with that.

To send a parcel to UK between 1-2kg its €11.75 so i cant see how any Irish sellers can sell into UK on ebay given such high postage costs.

I think its going to be a bigger problem than it is at the moment in future even for established irish retailers.

Im curious as to what type of goods can an irish seller sell online and make a profit given the competitive restraints we face?

lightspeed

jimmii wrote: »

Having moved to the UK things are set up so much better. Small discount for buying online and of you're shipping decent numbers you can get some very attractive rates. Couldn't believe the difference on the <5kg prices when we started shipping.

Thanks, would you mind clarifying are you referring to Royal Mail or other couriers based in UK?

Im assuming the same such discounts should be available in Northern Ireland at least until and unless Brexit dictates otherwise.

hairyslug

lightspeed wrote: »

Im at lost as to how its something highlighted more in the media as like you said there really is no competing with that.

To send a parcel to UK between 1-2kg its €11.75 so i cant see how any Irish sellers can sell into UK on ebay given such high postage costs.

I think its going to be a bigger problem than it is at the moment in future even for established irish retailers.

Im curious as to what type of goods can an irish seller sell online and make a profit given the competitive restraints we face?

You do have the option if using a Fulfillment service in the UK, they will store and ship, all you do is send them a copy of the order.

google "FBA UK CALCULATOR" it'll give you an idea as to how much Amazon will charge, don't forget to add in your shipping charge to the Amazon warehouse. The simplest way to make money here is items that are physically small and light but are expensive, Amazon will eat into your profits but you will sell more. If you are selling something that Amazon themselves doesn't sell it's even better.
If Amazon opened a Fulfillment centre in Ireland, it would save a lot of problems. You also have the option, depending where you live, of driving up north and posting from there.

jimmii

lightspeed wrote: »

Thanks, would you mind clarifying are you referring to Royal Mail or other couriers based in UK?

Im assuming the same such discounts should be available in Northern Ireland at least until and unless Brexit dictates otherwise.

Both. We mostly do paper products and ship with Royal mail but for larger things we send with couriers. 2kg from Edinburgh to London tracked and insured and 2 day delivery is £3.10+vat and that's for a one off.

Sleeper12

lightspeed wrote: »

From Ireland yes but if you go to the postage tab on ebay and choose United Kingdom, it says its free postage.

So again makes no sense at all as to how this seller can sell at such low prices. I dont think he getting them from liquidated stock as that would suggest its only a short term price but this seller is long established at those prices.

Sorry. I thought that you thought that we could post them for free. Got ya now

Walter2016

Sleeper12 wrote: »

I find an post loosing 1% of my post. Is this the norm? It means that I have to send the same item again out of my own pocket

That would be an extremely high loss rate for any delivery service. I would supect that it gets "lost" internally in the receiver's mind. If you send items without a signature required there are a substantial number of people who will claim they don't receive the item. Motoring offence tickets seem to have a 10% "loss" rate.

Walter2016

hairyslug wrote: »

Just went into the RM site, £3.95 for a 2kg parcel with POD. (2nd class post)
The equivalent with An Post is €12.90
Both parcels shipping internally.
Nothing we can do to compete with that.
If you're shipping regularly outside Ireland, may be best to open an account with a courier company (don't accept their 1st offer for charging)

Royal Mail "small parcel" is same as An Post "packet". An Post don't offer a second class rate. An Post rates compare favourably with Royal Mail same service rates, but it would be good to have a slower service option.

Royal Mail international rates are quite expensive but if you ship any sort of volume you will get substantial discounts from all the couriers and postal services both here and in the UK.