In yesterday's Nugget, I explained two important topics about jewelry e-commerce websites, namely continual security monitoring and product pricing. In today's edition, I'm explaining another common issue that often surprise jewelers when they set up their e-commerce sites for the first time.
Let me start out by saying this is much easier to figure out if you are only selling to people within your own country. Don't assume that you can, or even should, ship through your post office or through a courier service.
Before you even decide on a shipping method you should first call your insurance company. Retail jewelers, designers, and manufacturers should all carry business insurance specific to the jewelry industry. This is called jewelers block insurance and it typically includes the coverage a jeweler needs to easily run their business, including insurance on shipped parcels.
With jewelers block insurance, you don't have to declare a value when shipping jewelry to a customer. Lost parcel claims are then handled by the insurance company and not the shipping service.
If e-commerce is your only way of doing business, then the cost of the yearly jewelers block insurance should be far less than the cost to pay extra insurance charges on every item you sell.
Methods of pricing out your shipping
The easiest option is to establish flat rate shipping for all your items above or below specific values. A simple e-commerce system will allow you to set up flat rate shipping for all your items. Let's say you are shipping everything through the USPS and you want to set a flat price of $15 for all items. This is a common practice, just keep in mind that your customer will see the actual value of the stamp on the parcel when it arrives. They might feel cheated if they see postage less than the $15 they paid.
Another possibility is to tell your customers all shipping is "free." In reality, what you're really doing here is figuring out how much it will cost to send each item ahead of time and then adding close to the true shipping cost into the sale price. This option is especially useful if you have various size items that don't easily fit into a standard USPS flat rate box or a FedEx box.
More robust e-commerce systems will allow you to tie directly into USPS, UPS, FedEx, DHL or any other carrier that has an API allowing shipping price calculation in live time. These APIs usually calculate shipping based on weight.
Notice that I said weight and not price. Even though these APIs include the ability to include insurance costs you shouldn't be using that option. Remember that the value of the item is covered under your jewelers block insurance.
Now, if you thought the product pricing calculation from yesterday was a pain in the neck, think about how you would calculate the weight of your jewelry. A simple ring might weigh 3 ounces, but that's not what the shipping service needs. They need the "boxed weight" that something will be once you wrap it up and seal the box.
Simple enough, right? Maybe you can just set all your products at 1 pound shipping weight, except that method fails miserably as soon as someone orders 2 items. Now we're getting into the intricacies of how warehouse picking and shipping works. Large warehouses have specialized software that can calculate how many items will fit into a single box and what the weight will be. That software even knows if an order will need multiple boxes.
Want to see how this works in practice? Browse through Amazon.com and add a bunch of random things to your shopping cart and proceed through the checkout process. Look at the flexibility of the shipping option they give you. Replicating that functionality on your own website isn't easy.
My preferred method is to assign a portion of box's weight to every item. Then I set the maximum weight for a box. During the checkout process you total up the weight and divide it by the maximum. The website looks for a value over 1 and automatically adds a second box to the calculations before requesting the price through the shippers API.
This is complicated stuff, but in the long run it's better to use this automated method of shipping because it also gives the user multiple shipping speeds, like 3 day or overnight.
Another advantage is that you have less of a chance of losing money because you undercharged for the flat rate shipping.
Do a few searches for "how to ship fine jewelry internationally" and you'll find an array of questions and confusing answers.
You are responsible for paying the carrier for the parcel you're shipping, but the recipient is required to pay customs fees, import duties, taxes, and any other fees that are incurred during the shipping.
USPS has limitations on where you can ship jewelry. As of this writing, they restrict you from shipping fine jewelry to the UK. Don't even try, and certainly do not falsify the customs declaration you have to fill out. Your shipment will get permanently stuck in customs, you'll have to give the customer a refund, and you will never see the merchandise again.
You could probably use FedEx to ship to anywhere in the world, and your insurance company might even suggest them as the shipper of choice.
Since the cost burden of the customs and import taxes falls on the recipient, it might not seem so bad to simply offer international shipments and not worry about it. But things are not that easy when shipping to Europe.
Europe has restrictions on the chemical composition of jewelry you ship to customers. If your jewelry isn't already certified as compliant with European Union chemical requirements, then you need to find out if you should be shipping to an assay office for testing and hallmarking before it reaches its final destination.
In conclusion, I hope this helps explain the complexities of setting up shipping methods from your e-commerce site. As I said at the beginning, it's much easier to manage your e-commerce shipping options if you are only selling to people within your own country.