Postage

I recently made a purchase through Jet Tools in Brisbane, a small order which arrived promptly, however I checked my account and saw that an amount of $18 had been withdrawn, a mistake I thought, as this was the price of one item I purchased, I thought it was a double up, when the packet arrived via Australia Post, I found that the $18 was for post and packing,.

The overall weight was under 200g, the actual receipt was not from Australia Post but from Jet tools.

This amount is obscene for the weight of the item, I recently had a package weighing around 20kg arrive for nearly $20. I have sent items through Aust Post and know that this is excessive.

I think I have been ripped off, I will be ringing them and letting them know that if this is the case, the next purchase for a large amount of equipment will not be bought through them.

Not happy Jan:((

Maybe they should write "Post and Packaging". At todays rates it costs at least $5 labour to pack the box. Not counting the box and tape. I used to get some books in the US and they charge $25 bucks to pack the box fill out the paperwork and take it to the post office (for non-us orders).

It is fair to pay a packing charge but I doubt that an item that weighted less that 200g would require much packing.

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Originally Posted by Cliff Rogers

It is fair to pay a packing charge but I doubt that an item that weighted less that 200g would require much packing.

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It was probably already in a suitable box - throw it in a bag, remove plastic strip & press - cost for labour less than 10 cents. Postage to anywhere in Oz is $7.20 for a 500g satchel, and that now includes tracking. Used to be $6.60 without tracking, but that has been replaced just recently.

Was it a gouge that you purchased? Sounds like it was.:D

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Originally Posted by gdf26562

Not happy Jan:((

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I wouldn't be happy either. Bad publicity for them.

Post and Pack. They get you coming and going.
Very useful term to increase profits.

As some one who sold Paulownia I used to send some small bundles of timber by Aust Post. If I sold $40.00 of timber:-
I had to communicate with the customer about the order. (phone or email.)
I had to select the plank and cut it to length.
Wrap it into a parcel.
Make out an address sheet.
Take it to the Post Office.
I would then prepare and send an invoice to my customer because I then knew the
correct postage.
(In my case I then emailed the invoice and hoped I got paid. for the record I never had a bad debt. Timber people are good people even the young surfies who made their own surfboards.)
The profit on the sale of the timber would be $10.00 without a P & H charge. A lot of time and effort for so little return.

If I had an order for $200.00 of timber the procedure was much the same except that I used IPEC to deliver the parcel. In most cases the process was equally as long but my profit was much larger.

My feeling is that $18.00 is not unreasonable.

Whitewood

G'day Whitewood

I don't disagree for a moment that all these costs have to be covered.

I would make the point that the following would have to be covered for any purchase, including pick-up:

• I had to communicate with the customer about the order. (phone or email, or just talking in person)
• I had to select the plank and cut it to length.
• I would then prepare and send an invoice to my customer because I then knew the correct postage.
• In my case I then emailed the invoice and hoped I got paid, or printed the invoice for immediate payment for a pick up.

Therefore I would argue that these costs have to be covered by the price of the goods, otherwise in a pick-up situation you would not be compensated.


These points:

• Wrap it into a parcel.
• Make out an address sheet.
• Take it to the Post Office

are for non pick-ups, and therefore are warranted to be included as an extra handling charge. Furthermore, timber is a bit different to a part or tool that is picked from a shelf, and that probably already has some kind of packaging, and quite probably does not need any extra packaging.

Many of the companies selling tools/parts etc are probably taking multiple packages to the post office each day, and it's just a cost of doing business, and should be reflected in the price of the goods. Any P&P charge should reflect the actual effort that goes into the particular item.

Following on from your logic, it would be reasonable to charge the cost of the phone call, part of your internet costs etc etc, and clearly there would be a severe backlash to that from potential customers.

The $18 charge for this item is outrageous, given that the top whack price of the postage would be $7.20. In this case a handling charge of perhaps $1-2 dollars would be appropriate.

This is different, I know, but it's still in the same vein:
I recently had some small machinery freighted from Germany. The cost of getting it customs cleared over here was more than the actual cost of the air freight, and I was suitably outraged. I demanded to know how they could justify each and every one of the 8 itemised charges, and they had great difficulty. Three of the charges were taken off. Basically they were trying to charge me about $400 for what would amount to perhaps 30 minutes work. I ended up getting it for a "bargain" price of $270 odd, which in my opinion was still a gigantic rip-off.

Shouldn't the retailer be contacted first and be given a chance to explain?

On the contrary Groggy - the should be able to justify it on the website, before any charges are made.

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Originally Posted by FenceFurniture

On the contrary Groggy - the should be able to justify it on the website, before any charges are made.

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Actually, if the charge was made by credit card then this charge should of been explained and outlined before the goods were sent, not blindly invoiced.

What I was suggesting was, sometimes a phone call results in a simple "oh, that's a mistake, I'll re-credit your card now". Better to give them the chance to fix what MAY be an honest mistake before going public. I think everyone would like to be treated in that manner, I know I would.

If it is not a mistake then that is another matter.

Hey guys

Been away for a few days, and prior to leaving I rang the business that I dealt with, first off i must apologise to jet tools in Brisbane as it was not them that sent the item, although I did ring them first and I got put through to who I thought was the spare parts dept, but apparently it is another business, 'Gregory Machinery pty' in Brisbane.

I rang them and spoke to the spare parts man and asked him to explain the cost of $18 as I thought it was way too much, almost immediately the guy was dismissive towards me saying he had never had a complaint, I asked him to explain the break down but was given a 'thats the price' he then asked me when I last sent something, as you can imagine I got annoyed with his attitude, he continued to tell me that is the cost and that he just broke even with sending it. I asked him why he did not mention the cost of postage and packing prior to this, he thought he didn't have to.

He went on about customer service and I explained that I was also in customer service and had he tried to explain without the attitude I may have been placated, but alas, no.

So I will be taking the package back to the Post office and asking how much to send it back the same way, and allowing for the cost of a small packet I will be very surprised if it goes over $10. Shall keep you posted.

I also told the fellow that I would not be doing any business through him again, he wasn't to fussed by the sound of it. If I am right about the cost, a letter shall be written to the manager outlining my disgust, and will not be promoting his busness.

I am usually pretty easy going but this has got me riled....:~

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Originally Posted by FenceFurniture

The $18 charge for this item is outrageous, given that the top whack price of the postage would be $7.20. In this case a handling charge of perhaps $1-2 dollars would be appropriate.

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I can't let this pass

in other threads the costs of Australian retail have been discussed and I don't want to repeat the same here, but

If the employee tossing the boxed item into a 500g satchel is paid $16/hr (current minimum wage), the employee's cost to the business is typically a minimum of 2x that, i.e. $32/hr. That is if the business doesn't recover $32/hr from the work that employee does, it will go backwards. But at $16/hr it's not a given that the employee can write legibly and even reading can be iffy.
If it's a "girl (or boy) in accounts" who does the "picking and tossing" their cost (to the business) is more likely >$45/hr.
Your suggested $1 to $2 equates to around 4 minutes for the counter jockey whose hand writing is possibly illegible or around 2 minutes for the "person from accounts"

Most businesses charge in 6 minute increments, so P&H would likley have a minimum "cost" of around $5-10 on top of the postage.

It strikes me that the actual postage cost is pretty obvious and no-one minds paying for that, but it is the cost of the handling that raises most objections. There are two ways you can handle that, either charge for the handling directly on an item by item basis and end up with a big slug for the buyer, or you can look at the cost overall to your business and incorporate that into your pricing structure, thereby spreading the burden into small pieces for all the customers to cover. I wonder which approach we would feel better with?

There is another aspect to this - the cost of collecting the item personally.
I suspect that it would cost a lot more than $18 to drive from Coffs to Brisbane and return. I agree however that the cost should have been agreed before the item was sent.
I had a back order with Carbatec in Melb. It cost me $15 to have it sent to me and it was on my doorstep the following morning. It would have cost me more than that in petrol. As we are on opposite sides of Melb it would have meant almost a half day trip there and back.

Just my 2c worth.

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Originally Posted by ian

But at $16/hr it's not a given that the employee can write legibly and even reading can be iffy.

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In which case they shouldn't be assigned to that task, but i struggle to see the relevance.

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Originally Posted by ian

... or around 2 minutes for the "person from accounts"

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Yes Ian, that's exactly what I'm suggesting. I've written out a few EP bags lately, and it doesn't take long to write the sender's and receiver's N&A - perhaps a minute - and my handwriting is ok.

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Originally Posted by ian

Most businesses charge in 6 minute increments, so P&H would likley have a minimum "cost" of around $5-10 on top of the postage.

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Can this concept really be translated to quick operations such as writing an address? If they have (say) 10 items to send per day and they adopted this approach then they would be charging for 60 minutes work when it actually would take about 10 minutes to write out the addresses.

There are given costs that are always there, and as burraboy said, they could mostly be incorporated into the actual price of the item. If I am comparing the price between two suppliers I always look at the total cost to me including P&P. This can often result in purchasing an item for a higher price but with lower P&P. Recently I had a few router bits sent from Carbitool and they post the items at slightly more than cost value. They have pretty obviously incorporated the usual given costs into the price of the bits. I believe that this projects a much fairer image to the consumer, and that's vital. Better than have a disgruntled customer on their hands, as the OP has well and truly become.

This is an example of what these companies are up against in terms of competition.
I've just picked up some pieces of HSS posted from Hong Kong. Free postage and sent registered. I realise that this will be subsidised but, if you want repeat business, you shouldn't try to get every last cent out of a customer.
Cheers,
Jim

The cost of Festools is pretty much the same in Australia where ever you buy it from give or take a dollar or two. If you are able to go into a store and pick it up that is fine, however if you require it delivered it needs to be paid for. Some dealers such as Ideal Tools in most cases include delivery if the order is more than a certain amount. (In Ideal Tools case it is $250 [excludes some remote areas]). This can be one way of avoiding nasty delivery costs.

went to the post office today and found that the postage cost was just under $10, that leaves $8 for packing, can't really see the justification, considering the company would already make profit from the items I purchased, $1 for a small thumb screw amongst other things.

I do not begrudge the cost of the items, but with the attitude and $8 cost to pack the small items I can't get my head around it.

Considering he said he just breaks even, I think a letter is in order to the manager to show my dissapointment, I for one will not use them again.

I understand the cost it would be if I drove that far, but fair go...

My 2 cents worth,

I would have thought that the actual cost of handling/packaging the item would be built into the mark up that they put on the item, therefore the only extra cost should be the actual cost of postage.
I recently bought a Jet Table Saw from Gregory's and experience their
sales staff and felt that their attidude seemed to change once the product was sold.
Sometimes I wonder wether they really concider the repeat customer effect that service (with a smile) brings.

Cheers Rumnut

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

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Originally Posted by allsport

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

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Well said

To clarify things in my mind, we are talking about an internet transaction aren't we where all the details arrive in an accessible electronic form ready to print out onto an address label? Plus, the money goes directly into a bank account.
The way some of the justification has been, I wouldn't have been surprised to see the costs of string and sealing wax included together with the trip to the bank with a bag of copper coins.:D
Cheers,
Jim

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Originally Posted by jimbur

To clarify things in my mind, we are talking about an internet transaction
Jim

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Actually it was a telephone transaction so the seller could easily have explained their charges at the time but failed to do so.

Hence their charge for postage and packing is IMO unsustainable and unauthorized and I would immediately start charge back procedures with the credit card company for the full postage charge of $ 18.00 and afterwards let them fight it out in court. I know that I would win.


Peter.

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Originally Posted by Sturdee

Actually it was a telephone transaction so the seller could easily have explained their charges at the time but failed to do so.

Hence their charge for postage and packing is IMO unsustainable and unauthorized and I would immediately start charge back procedures with the credit card company for the full postage charge of $ 18.00 and afterwards let them fight it out in court. I know that I would win.
Peter.

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Peter, makes some of my comments unsustainable of course but your points seem completely valid.
Cheers,
Jim

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Originally Posted by jimbur

Peter, makes some of my comments unsustainable of course but your points seem completely valid.
Cheers,
Jim

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Yup, 100% agreed. Peter has hit the nail on the head.

I'd like Jim from Carroll's or David from Timberbits to weigh in on this one. I order from these guys regularly as their service is incredible. PLUS postage is charge at cost and packaging is not charged at all. In fact, their packaging is often recycled and is packed so well as to protect from bumps and scrapes. At the end of the day both these companies are thriving because of their service and transparency when it comes to postage and handling.

If a company isn't transparent about ALL costs then they deserve to be outed.

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Originally Posted by allsport

I really think $18 is quite reasonable, especially as around $10 was an actual expense. This is Australia, not northern China, and there are a lot of costs involved in being in business.
I pay an 18 year old unqualified young lady $22 per hour for casual work. With super, admin, accounting, workers comp insurance etc the actual cost is around $30 an hour. For me to finish in front on the deal I need to get at least $50 an hour return from her work.
After GST, accounting, wrapping, stationary, your call back to complain, the cost of the phone call, the cost of your internet connection, the value of the time consumed for all of the people who have read and contributed to this saga... priceless!

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All the costs you are listing there are what is called overhead and any business worth its' salt incorporates those overheads in to their pricing structure.

All these costs also apply to over the counter sales, with the possible exception of wrapping paper and string (Aust Post has some very nice strong satchels included in the postage cost).

I assume from the above justification for adding $8 to posting an item (which would have cost $7.20 to anywhere in Australia, remember that satchel) that you also stand behind your counter staff and record the time they spend with each customer, this time to be added to the sale amount (in 10 min increments of course)? This time will include the staff member and the customer discussing the weather, the footy, what they had for breakfast etc.

The fact of the matter is that a lot of businesses have seen fit to make p&h a separate profit center within the business, a business model that is ultimately self-defeating, hence the number of businesses reported as saying that the internet is killing their business.

Those businesses that have identified the internet (and phone sales) as a business opportunity to be grabbed with both hands are thriving, just look at the 2 businesses mentioned above.

I like the idea that P&H takes into account the time taken to answer complaints calls.:D Now there's an opening for someone - imagine the recorded message - "if you wish to complain, press 9 and you will be charged at $50/hr levied at ten minute intervals".
Cheers,
Jim

Thanks for the advice about overheads.
The problem with this approach is that it doesn't work for a large number of business profiles. It's simplistic and naive. The place where it works best is in Economics-Textbook-Land, but many in Canberra also have a firm belief that it is beyond reproach. That is why they are Public Servants and have never been involved in a private business.
One of the primary reasons for a P&H charge is that small orders (>$30/$50) are a road to a slow death at normal margins. They take up all your time and pay you very little. If you put up your prices to compensate you lose the more worthwhile customers who now find you too expensive. Bugger! - can't do that! P&H it is.
And then people whinge about $8. Last time I heard , it was 2012. A stubby (yes, a small bottle) at a pub I was in last week was $10. For one stubby. Two meals at Macca's was $21. My last power bill was $320.
How about just a little bit of perspective on this; it's no big deal.

True Allsport, it really is no big deal, it was mainly the way it was done, the response I got and the company not explaining the break down.

They have lost my business and I will not recomend them to my woody friends.

Cheers

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Originally Posted by allsport

How about just a little bit of perspective on this; it's no big deal.

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The real perspective on this is not the amount of this charge or how a business calculates its charges BUT that this business failed to disclose the charge when the order was made.

This was a telephone transaction and no mention was made that a charge would be made, hence it is proper to assume that it would be posted out free of charge.

In case you think that is not a reasonable assumption I would point out that on a number of occasions I had small parts sent out to me by a few suppliers free of charge to fix items, the last being Arlec to fix a15 year old cut of saw.

So this business fails to disclose a charge when the order is made by telephone and then charges this non notified charge to the credit card and that is just not on IMO and that is the real perspective on it.


Peter.

Another view on this. I've known businesses go bust because they tried to separate areas that made little or no profit from the more profitable sides of the enterprise. Then they would find that they lost their customer base as they no longer offered a complete service.
Lose trust or make customers feel that they are not valued and you're well on the way to bankruptcy.
Cheers,
Jim

The suppliers of the "small items" have perspective on the situation; they realise that the amount thay can charge is trivial and that the invoicing/bill chasing/receipt writing/stock-accounting exercise is simply not worthwhile. It's a better option to simply post out the little bits and pieces, get a smidgen of good will and get on to the next job.
The supplier should certainly have advised of the handling fee, but why on earth would they supply free postage? I give the ATO many thousands of dollars each year and they don't even supply a stamped envelope.
Bearing in mind that the post was around $10, the handling fee was only around $8. Too much? Maybe, but you'd have to have a real sense of entitlement to complain bitterly and publicly about such a relatively trivial amount. THAT is keeping the fee in perspective.

I bought something from laminex industries last week. $25 delivery charge, or $15 to pick up......I chose the delivery (only $10 in real terms). The cost of doing business. (Like paying tolls on toll roads)
TM

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Originally Posted by TermiMonster

.I chose the delivery (only $10 in real terms). The cost of doing business. (Like paying tolls on toll roads)
TM

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Saved yourself the time involved and if the stock was damaged on arrival they had to make it good.