Online postage is probably not the most earth-shatteringly exciting subject, but I am prompted to write about it now because of some changes that Etsy, my main online selling platform, is making.
From the end of this month Etsy’s search algorithm will favour shops that offer free postage to customers in the USA on orders over $35. They are also pushing sellers to offer free shipping across the board to guarantee a decent place in listings. The idea is that customers want free postage and are more likely to complete a transaction if there is free postage. There are flaws in this thinking.
Etsy has taken a once size fits all approach. Sellers who charge for postage will appear so far down the listings (bearing in mind Etsy has over 2 million sellers) that they will be invisible; they will be unable to compete with the mass produced items that are now part of Etsy, already making it harder to find the genuinely handmade and unique. This change will be good for some businesses - those who fall in the zone where their margins are high enough to absorb postage costs into the price and whose items are cheap to post in the first place will no doubt benefit. Sellers who fall outside both ends of this zone will suffer. If you sell a small handmade item, e.g. beads, the margins are too small to incorporate postage costs without pricing the item out of the market. At the other end of the scale there are also issues. Let’s work through an example:
Take one of my polymer clay quilts, one of my larger items. The one pictured, based on a Medieval Bestiary, sold for £395. To post securely to the UK was £26.60. To post to the USA tracked and signed was £110.00 (other parts of the world cost even more). The fees for selling that piece worked out around £60, material costs were about £40. That leaves £295, which equates to an hourly rate of £5.90, substantially less than the minimum wage and that’s not allowing for a profit margin. If this were a mosaic piece at the same price the hourly rate drops to around £2.50. So, if I sold this piece to the USA and absorbed the postage, I would have been working for £3.70 per hour (or around £1.50 if a mosaic, which is why my mosaic pieces cost more!).
The other option of course is to add the postage to the price. In this case my £395 quilt would now be over £500. Maybe that would still be an acceptable price, but this is where the policy is unfair on the customer. Etsy doesn’t give me the flexibility to charge different prices to different countries if the shipping is incorporated (I can only change the stand-alone postage) so a customer in the UK or elsewhere in Europe would be paying a premium price on the off-chance it might be sold to the USA or Australia. Each seller must decide if the US market is big enough for them to warrant alienating the home market.
It is also unfair on customers buying multiple items. To use the beads example, a seller lists an individual handmade bead at £2.50 and charges 1.50 postage. Under Etsy’s guaranteed free delivery they add the postage to the price of the bead so the bead now costs £4.00 with free (ahem) shipping. If the customer wants to buy multiple beads they pay the added postage rate with each bead, when the seller would previously have been able to offer a discount. I currently do this with my greeting cards – it costs the same to post 3 as it does a single card, so the customer gets a saving on multiple purchases.
There are other issues with this policy, not least the way it clearly disadvantages non-USA sellers, though within the US there are huge differences in shipping rates from one side to the other, so even there many sellers are not happy. It is especially difficult for sellers of vintage items, furniture and large pieces of art – most of my work I restrict to a 30x30cm size so I can keep postage rates down, although I would dearly love to work more in bigger formats. Etsy already offers customers a free shipping search filter for those who are looking for it, and the postal charges are clear on each item page as well as checkout. When people buy art they know that it is a different experience to buying a toaster.
While some will make this work, the small businesses and creative livelihoods of many more will be at real risk. Big business can offer free shipping and absorb the cost comfortably, but this is because they are large enough to have the economies of scale to store goods in warehouses all over the world, and can replace items that are lost in the post by using cheaper unsecured delivery services - when you have spent 50+ hours creating a one-off piece of art you cannot do that. Even in these circumstances someone pays, usually the worker who created the mass-produced item in the first place.
I will not offer free postage as I think it is important to be open, honest and transparent – I only charge what the shipping costs, which customers can check for themselves. We should all, as consumers, be aware when we see that free postage claim, be it on Etsy, Ebay or anywhere else that there is no such thing is free shipping. Somewhere down the line someone is paying for it.
July 2019
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