Business Lyceum
e-Letter
Practical
Instruction in the Arts and Sciences of Making Money
MARCH 2001
Greetings & Salutations:
One of the questions I get asked most often is, "How
do you figure out how much to charge for shipping & handling?"
-- So ...
Here are some methods you can use to determine the amount
to charge for "shipping & handling" in your advertising.
I could give you a bunch of doubletalk about computing the
per-piece cost of the shipping containers (or envelopes), extrapolating
the number of man-hours involved in making each shipment and
multiplying that figure by the average shop-cost per manhour,
then factoring in a proportionate amount for overhead based upon
the gross overhead less such overhead as may not be directly
related to the shipping process divided by the number of
pieces shipped in a given year ... as some big companies have
been known to do - or - I could just tell you the truth.
"Handling" is a cover your butt term. -- It actually
goes back to some of the original "Truth In Advertising"
rules and regulations.
Let's say that you list only a "shipping" charge
in your advertising ... say $3. An order arrives but, because
the buyer is so close to you, it only costs you $2 for actual
"shipping" costs. Rightfully, the customer would
be entitled to a rebate or refund of the unused portion of the
"shipping" charges you have already collected; since
you paid less than what you charged them as a specific cost.
By adding the non-specific term "Handling" to your
price quotation, any possible difference between the actually
shipping cost and the amount you collected from your customer
isn't subject to rebate or refund.
If you are shipping by UPS, FedEx, or some other such carrier;
or by the Post Office Parcel Post service, the amount you charge
may be determined by adding-up the different charges for shipping
to each delivery zone ... then dividing by the number of zones.
-- The result will represent an average shipping cost ... if
you expect an equal number of orders from each delivery zone.
When you don't expect to receive an equal number of orders
from each delivery zone, the "mailorder statistics"
for your industry will tell you what percentage of your orders
will come from each state. -- Multiply the "cost" of
shipping to each state by the percentage stated in the statistics
... use the percentage as a "whole number" when doing
your multiplication; not a percentage. Add-up all those
numbers and divide by 100. -- The result will be your "average"
cost of shipping.
Then again, some marketers simply ask for the "cost"
of shipping to the farthest delivery zone ... knowing that by
adding the term "Handling" to their advertised offer
their butt is covered.
If you are using a flat-rate carrier ... such as Post Office
Mail ... your shipping cost will be the same for all of the delivery
zones. In that case, use the highest flat-rate cost ...
such as First Class Mail. Then, covering your butt by using
the term "Handling" in your advertising, you can ship
by First Class or any of the lower classes ... bulk, book rate,
etc.
Of course ... if you don't want to go to all that trouble
... you can just do what most of us do. -- Look and see what
others, selling products similar to yours, are charging for "shipping
& handling" and charge the same.
No matter how you calculate your "shipping & handling"
charges, some of your customers will pay
you more than it costs you; others will end-up paying you less.
-- The difference ... plus or minus ... will go to your bottom
line. Either adding to your profit, or costing you some
of your profit.
Another question I get asked quite frequently is about the
CD's with reports on them that are supposed to be sold as individual
reports. They have things on them like business opportunities
and how-to reports. They say you can make a lot of money reselling
the reports.
People want to know if this can be done profitably by mail
order. -- Well ...
One of the biggest mistakes made ... over & over &
over & over ... by beginners in the business community, is
that of thinking all they need is "something to sell."
The CDs offer a lot of POSSIBLY saleable material - but -
"HOW" are you gonna sell it?
Back in the 1970s, I wrote a series of 1-page reports and
offered them as a monthly newsletter for $10 per year.
Made a bundle doing it because each of the reports were written
from my own personal experiences.
Later, I republished those reports separately and charged
$1 each for them -- sold over 100,000 of them each year for years.
-- But, it was the "advertising" that sold the report.
The reports DID NOT sell themselves.
So ... the CDs might have a lot of POSSIBLY saleable material
- but - the BIG question is "how" are YOU going to
sell it.
If you can figure out how to sell the reports on the CD, you
can make money doing it.
By the by, not too long ago, I found 17 of my old 1-page reports
... written in the 1970s ... updated them and put them together
in a separate report ...
Real HOME-BASED
BUSINESSES
You Can Start & Operate
From Your Home!
Seventeen (17) Different
No MLM. -- No envelope stuffing.
-- Real businesses you can operate from home.
Now, let's do some ...
Questions & Answers, Comments
& Other Good Stuff!
Michael Ross wrote:
"Got a comment about your latest Lyceum e-Letter... and
in particular... the idea of spending less. Granted, the idea
is to make more money. Shouldn't there also be a sharp eye kept
out for ways in which costs can be reduced? I'm not talking so
much about the good costs - expenses required to help you make
more money. I'm talking about the bad costs - expenses that don't
add to your money making ability. -- Like, replacing the 100W
light bulb in your small shop store room with a 75W bulb. And
turning off the 2500W airconditioner when you leave the office
at night. And turning off your auto-replay video/tv in-store
promo when you leave, instead of leaving it on to entertain the
dust mites, and the cleaner when he comes in. -- Okay, so it'd
take 96 and a bit years to make a million dollars by saving $200
a week. And that's just not feasible. Nor is it the way to "get
rich". But nor is ignoring those expenses that don't help
you make more money."
Michael:
Point well taken - but - don't confuse "prudence"
with "cost cutting."
It it only prudent to turn-off unused appliances at night;
or reduce power usage by using light bulbs with a lower wattage
- but - when a business person spends the majority of their time
seeking out those otherwise prudent savings ... taking time away
from the vital task of increasing revenue & profit ... the
search for those savings becomes counter productive.
Over the years I have known small business people who spent
more time trying to save a few pennies on utility costs, telephone
long distance fees, and other minor costs; while their business
suffered.
Do what is prudent - but - never let it interfere with your
primary goal.
Nonie & Jerry Schmanske said
this:
"It certainly doesn't surprise me that you are a wealthy
man. We recently paid $32.95 for a "Nasdaq" book which
turns out to be a 12 page PAMPHLET. We have Penny Stocks which
is supposed to be the subject of this thing. However -- ours
are Bulletin Board stocks which this does not cover, ultimately,
this pamphlet is utterly useless to us. For $29.95 + S&H,
a 12 page pamphlet is not what one expects to receive. This is
the biggest insult that I have ever seen -- getting hard working
people to pay this much money for a 12 page item. We have 82
people on our mail list that will be informed of our experience
and I'm sure they will tell their friends, as well. I really
believe that the "Better Business Bureau" needs to
know of this sort of deal. You are charging far too much
for this, Jim, no wonder you are a rich man. Add about 30 or
40 pages to it and it might reach the level of money you charge
for it. But TWELVE pages??? Are we allowed a refund if
we return this? When we received this, we thought it must
be a pre-mail to the REAL book that would come a little later
- but none came, Jim. You need to inform the public that this
is only 12 pages and the system does not include Bulletin Board
or Pink Sheets. We scanned the first few pages of the pamphlet
-- most average people couldn't afford 60,000 shares at
a cost of $144,375 -- That would wipe us out, Jim. Your ideas
are for wealthy people who don't really need your advice. If
you have any ideas on stock costing $2 and under -- why not write
that sometime? -- Please forgive our abrupt letter but it is
our disappointment showing. We had so looked forward to
receiving it."
Nonie & Jerry:
AMAZING ... over 10,000 copies of that report have been sold
and NOT ONE complaint, from any one, about the validity of the
trading system. Then again, your complaint isn't about
the validity of the trading system anyway ... your only complaint
seems to be about the "weight" of the report; in ounces
instead of pounds. (If I had added the 30 or 40 pages of
filler you suggest ... even if the filler added nothing to the
trading system ... would you have been happy then?) -- Of course,
you admit having never read the report ... only scanning the
first few pages.
Using your assumption of value, Abraham Lincoln's Gettysburg
Address would be less than useless owing to the fact that it
was written on the back of only one envelope.
Your only other complaint stems from the fact that the report
doesn't cover the Pink Sheet or Bulletin Board stocks - BUT -
what is the name of my report? -- The name of the report is "How
To Make A Fortune Trading NASDAQ (Penny) Stock" ... the
title alone tells you it is about NASDAQ stock; not Pink Sheets
or Bulletin Board stocks. Beyond that, there is nothing
in the advertising for the report that even intimates it will
work on anything other than the NASDAQ.
After "scanning the first few pages" you made the
erroneous assumption that you had to have vast amounts of money
to trade the system - but - had you 'read' the report, you would
have learned that the amount of money involved in the trades
is irrelevant, but profits of from 10% to 100% (or more) within
90 days are the rule rather than the exception.
Please do yourself a favor ... READ the report if you really
want to make some money trading the penny stocks - and - by the
way, the one BIG trade I tell you about in the report was on
a stock selling at just a bit over $2 per share.
No, there is no money back option in any of my material because
(1) I am not a lending library, and (2) the only way you can
return the information is by loping off your head and sending
it to me; since it is impossible to erase your memory.
Alvin Corbett asked:
"Right now I have several inquiries for distributors
for my new lingerie line Rafaellawear. Now my new question how
do I turn those inquiries into sales? even Better how do I make
new posts for my lines where I will prequalify buyers and sell
directly from the ad? Please advise. I really don't
want to sabotage myself this close to being successful."
Alvin:
If you have inquiries ... you have people who have held up
their hands and said they are interested. All you need to do
now is send them your complete Distributor Information ... prices,
delivery, etc.
Those who are really interested will get back to you with
any questions, comments, whatever. Use those questions,
comments, whatever, to relay further information to the inquirers
who didn't respond. -- Just keep hitting them with your info.
Here's one for you Moms in Business:
This web site offers success stories of work at home moms
who use the Internet. Learn how other moms are making money
from home so they can spend more time with their kids. A free
monthly newsletter features original articles and profiles one
mom who lets you in on how she got started and what she did to
become successful. iBizMom provides advice and
tools to help you build a home based business on the web.
Amy Koullapis started iBizMom
because she saw so many moms who are looking for legitimate opportunities
and are coming up empty handed.
http://www.ibizmom.com
Hey, ya don't even have to be a Mom to benefit from the site.
It's gotta lot of good stuff for anyone involved in a Home Based
Business.
David Ferguson wrote:
"I am an avid reader of your newsletter. It is
one of the few that really gets "down to business"
in every issue. I consider it an honor to be able to learn
from a master marketer such as yourself. -- I am involved in
a small way in offshore investing. I want to learn as much
as I can about that and other aspects of offshore business.
Please refer me to the best sources of information on these subjects.
-- Keep up the great work! Lots of people need your help."
David:
Thank You for your kind remarks.
As far as I am concerned the best information about Offshore
Investing is written by my old friend Adam Starchild.
-- You can find his stuff ... and some of mine, too ... at:
http://www.cyberhaven.com
Alvin Corbett asked:
"I have a new question for you aside for quantity discounts
what incentives can be offered to bulk distributors?"
Alvin:
There are a wide variety of incentives that can (and are)
used to reward volume buyers. Some companies offer free
vacations ... when volume reaches a certain level ... others
offer free meals at the best restaurants - but - the two I used
most effectively were easy (and cheap) to initiate.
First ... I offered "Free Shipping" on orders over
$----. You would be surprised how many buyers will increase
their orders just to save the freight.
Second -- I offered the "Baker's Gross" ... order
a gross (12 dozen) and get one dozen Free.
Then, in order to keep my accounts receivable in control,
I offered discounts of 2% for payment in 10 days. -- Believe
it or not, I never fail to take that discount (when offered)
on billings that come into our offices. It amounts to significant
savings over the year.
Hey ... it doesn't matter whether you're selling toilet paper
or intangible services, you must clearly describe how & why
your product or service is better in a way that is beneficial
to your potential customers. That means using the power
of written communication. -- To give yourself the best chance
of success; no matter how you are selling ... by mail, on the
Internet, or from a store or office ... you need the absolute
best written sales message for your product or service. -- Writing
the most powerful sales ad-copy is as much art as science and
unless you yourself are exceptionally gifted in that regard you
need the services of an exceptional advertising copywriter. --
This contact may be just the ad-copywriter you need - and - he's
in the process of expanding his copywriting business in a big
way. To that end ... for a limited time ... he is offering
a FREE consultation & critique of any sales piece you have
(he usually charges $150). -- That "freebie" alone
may propel your sales & profits to levels you've only dreamed
of. -- Beyond that, even if you don't need any ad-copy written
right now, contact is also offering a 20% referral fee for any
new paying clients for his services. -- Check out the testimonials
at his website ... I'm sure you'll be impressed. -- Contact:
MIKE WIRTH, 709 St. John Dr., Belleville, IL 62221 --
(618) 235-6702 -- OnLine:
http://www.winwinprofits.com
Tom St. Louis wanted to know:
"Jay Abraham says he has 93 ways to get referrals. --
I always tell people to ask at the moment of maximum satisfaction
and don't do it as a quid pro quo. -- Ask if there are some people
you've talked to in the last month who would benefit from my
services the same way you did. -- There are also mandated referrals,
endorsed mailers. -- I'm wondering if you have a great twist,
articulation or technique that many business people can use to
get referrals."
Tom:
Shhhh! -- Don't tell Jay. There is only ONE way to get
referrals.
Over the past 30 years, more than 50% of my business has come
... directly & indirectly ... from referrals. In each
& every case the direct source of that referral was the SUPERIOR
QUALITY of my products. Beyond that, my products are "better"
than the ad copy used to sell them; thus the customers get more
than they were expecting. (My products are like peanuts,
nobody can eat just one.)
There isn't a month goes by that I don't get cards, letters,
FAXs, emails & phone calls from people wanting more information
because "Mr./Ms. So'nSo told me about you" - or - "I
read about you in So'nSo's newsletter" - or - "So'nSo
mentioned you in his/her book" - but - I have never directly
asked anyone for a referral, they just make the referral because
my products are that good.
As another well known newsletter publisher once told me, "I
don't ever recommend other people's stuff because I'm afraid
of the bad feedback I might get from my customers but, I am always
pleased to tell my customers about your stuff because I know
they won't be disappointed."
Just give your customers products that are "better"
than your ad-copy and the referrals will come.
Well ... that's it for this month. -- In order to make every
issue responsive to YOUR needs, please send me your questions;
or tell me what sources or resources you need to build your business;
or give me any thoughts you want to share with your fellow members.
Believe it or don't ... I ain't a mind-reader. -- If'n you
doesn't tell me what you need, I may never touch upon the information,
sources or resources you need.
This is your publication for you to use to your benefit ...
I am just your moderator.
Until next month, keep well ...
J.F. (Jim) STRAW
Peanut Producer
Thoughts For The Month!
"You can easily judge the character of a man by how he
treats those who can do nothing for him." -- James D.
Miles
"What you keep to yourself you lose, what you give away,
you keep forever." -- Axel Munthe
Can you stump the old master? --
Betcha can't!
Over the past 40 years (man and boy), I have made bundles
of money in direct selling, service contracting, wholesale merchandising,
entertainment (I was a professional Trumpet player, vocalist
& Radio Announcer), freight forwarding, import/export, retail
merchandising, warehousing, real estate, electronics manufacturing,
finder's fees, closeout merchandising, financial brokerage, business
consulting, steel fabrication, gold and coal mining, offshore
banking, mailorder, writing, and publishing. -- That being the
case ...
No matter what business you're in ... whether you're just
starting, well on your way, or at the top of the heap ... I've
probably been where you are, done what you are doing. -- So ...
Anytime you have a question about 'how' to do something in
your business - or - if you have any comments about anything
I've said in issues of this e-Letter; or if you want to add your
2 cents worth ... just "ask" me or "tell"
me.
Send your Questions, Comments or 2 Cents Worth
to ...
with "Question" - "Comment"
- or, "2 Cents Worth" in the SUBJECT.
If I, personally, don't have an answer to any question you
may ask, I will contact some of the professionals in your field
of endeavor (I will probably know one or more personally) to
get the real 'skinny' for you.
No Paid Advertising!
We DO NOT accept 'paid advertising'
in the "Business Lyceum e-Letter." -- Why? -- Because, when you offer 'paid advertising,'
you are obligated to run the ad, or have a valid excuse for not
running it. (An excuse that will hold-up in court because
all too many people like to sue for any seeming slight.)
Therefore ...
Any time you see something offered in
the "e-Letter," you can bet your bippy I am telling
you about it because it is something I, personally, would recommend
to my friends and family. -- It's here because I
like it; not because I am being paid to tell you about it --
BUT -- that does not mean that I don't accept payment in the
form of commissions (never in advance) from some of the offers
I tell you about.
'Nuff said?
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Copyright - 2001, J.F. (Jim) Straw. All rights reserved.