Monday, July 21, 2014

How to make the most of your order.

Shipping is expensive, especially when you are talking about shipping a live or perishable product. Shipping is at its most expensive when you are shipping Standard or Priority Overnight. If not the most expensive part of the order, shipping will usually be at least as expensive as the product being shipped. Today, I' m going provide a few tips to help reduce that ratio and make the the most of your order.

Weight vs. Volume

Shipping is calculated using two measures, weight and volume. The shippers (FEDEX and UPS) set a minimum ship weight that is based on the size box that is shipped. You want to avoid orders that are lighter than the minimum ship weight, you will just end up paying for unused weight. 

Generally speaking we have three different size boxes we use to ship. Large lobsters do not fit in our small box. We can ship up to 6 large lobsters in our medium box. when we use a medium box, the minimum weight that we get charged for is 10 pounds.

This example illustrates how shipping at least the minimum weight reduces the shipping cost per lobster. 

Fixed vs Variable Costs

Some of your shipping charges are variable. That is, as your weight increases so does your cost. Or in the case of insurance, as your value increases so does your insurance. But some of your costs are fixed. The best example is Gurnet Trading's handling fee. It is a flat $30 per order. This charge covers the expense of the box, the gel packs, my labor to process your order, and the labor to pack the box. To minimize the impact of fixed charges, order more product.

This example illustrates how ordering enough items can make the $30 handling fee almost inconsequential. 

High Value vs Low Value

When you place an order you want to get the biggest bang for your buck. You want to spend your money on the product not the shipping. You can't eat shipping. Shipping doesn't taste good. You can't even put in on a shelf to display. So the best way to reduce the impact of shipping, is by ordering high value items. 

This example illustrates how shipping a high value item like lobster meat reduces the effect of shipping charges on the overall price. Shipping 5 pounds of crab claws and 5 pounds of lobster meat costs pretty much the same (the lobster meat needs an $3 in insurance), but shipping makes up 85% of the crab claw order while it only makes up 30% of the lobster meat order. 

This examples isn't to tell you not to ship low dollar items. We want to sell crab claws and clams as much as we want to sell lobsters and chowders. But you can make the most of your order by mixing and matching high and low value items to maximize your YUMMY:SHIPPING ratio while still ordering your favorite products.

Economics vs Enjoyment

Seafood is not just food. Often it is an event. You sit around a table with friends and family picking apart food and eating in a more primal and tribal way. This is especially the case with live lobsters. There is the thrill of cooking a live creature yourself. There is a satisfaction in knowing how it was handled and treated. When intangibles like satisfaction and enjoyment enter the equation, economics get thrown out the window. It is hard to put a price on the smile of a child holding their first live lobster. What is the worth of  the rowdy laughter of a family watching a puppy bark at lobster crawling across the floor? 

When you aren't looking for an event, the economics are easy to calculate. Certain items are more efficient to ship. Live lobsters vs lobster meat is the single best example of how intended use of a product can drive cost. 

This example illustrates the difference intended use can have. It takes about 7 pounds of live lobsters (or about 5-6 small lobsters)  to make 1 pound of clear meat. Clear meat packs much smaller and lighter than live lobsters. When you ship live lobsters you are paying for the weight of shells, organs, and water. 2 pounds of meat can go into a small box while 11 lobsters has to go into a medium or large box. From an economic standpoint, we should only ever ship lobster meat. But where is the fun in that? No one wants to go to a lobster bake and eat picked meat out of a bowl. They want to crack the shell open and suck the legs. Some people want to hunt for tomalley and row. Others want to trade their tales for claws. 

The Tips
Obviously your order is going to be based on your preferences, needs, and budget. But when you can, think about these tips to help reduce your shipping cost. 

  1. Beat the dimensional weight minimum by ordering dense items that pack tightly into small boxes such as scallops, lobster meat, clams, mussels, and oysters.
  2. Reduce the impact of flat rate handling charges ordering more products.
  3. Mix high value items with low value items to reduce the impact of shipping.
  4. Consider your purpose. Is there a specific reason you need the product alive and in the shell? A processed product might ship cheaper.
  5. Do you have friends, family, neighbors or co-workers who might want to order as well? Get together and place a single order for the holidays or special event. We can put up to 50 pounds of product in a single box. A 50 pound order will have great economy of scale. On shipping alone, you will save, but we might also be able to discount product prices as well.