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This article is excerpted from:
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THE HOME-BASED TRAVEL AGENT
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A Newsletter for Those on the Cutting Edge
of the Travel Distribution System
http://www.hometravelagency.com
THE DEVILISH
DETAILS OF DOCUMENT DELIVERY
Sometimes the devil is in the details. One of the easiest things for
beginners to overlook when selling travel is the cost of delivering
documents to the client. Even a modest delivery fee (say $5 or $10)
can add up over time. Heftier delivery charges can wipe out a good
bit of your commission on some lower-priced products - or even put
you in the hole - unless you knew they were coming and prepared for
them.
Delivery charges
are an especially thorny issue for outside agents. This is because
most outside agents are dealing with a host agency hundreds, even
thousands of miles away. Here's a fairly typical example: A supplier
might charge $10 to ship documents to the "travel agency."
In many cases this means to your host agency. But the same supplier
will charge $35 to ship the documents to you or directly to your client.
Of course,
if you are using a local agency as host or obtaining discounted air
through a local consolidator, this is less of a problem. But sometimes
your clients are far away, even if your host isn't. You still need
to get the documents to them. But no matter what the situation, the
fact remains that document delivery costs money and someone has to
pay for it.
The document
delivery issue may be a reason to seek a direct relationship with
a supplier. That way, you become the "travel agency" in
the eyes of the supplier and the documents come to you, eliminating
the "middleman" host agency. Of course, you have to balance
the savings in delivery fees versus any lowering of commissions that
might occur if you "deal direct." How this can happen is
explained in the "Getting Serious" chapter of your home
study course.
The cost of
document delivery is yet another argument in favor of specializing.
If you sell 100 different products, you have (potentially) 100 different
delivery policies to take into account. If you sell 100 of the SAME
product, you only have one policy to worry about. Also, in the second
instance you might be receiving a dozen documents in one $10 shipment.
Failing to
take document delivery charges into account can be especially irksome
in the case of products sold to you, the travel agent, on a net basis.
You can add what you believe is a fair markup only to see it shrink
because of delivery fees you forgot to ask about.
There are
two ways to handle the delivery charges issue. Bill the charges as
a separate item or build them into your price. In either case, it
is essential to know what the delivery charges are going to be before
you start selling the product.
I am a believer
in disclosure. Most people are familiar with the concept of "shipping
& handling". Every time you order something on the Internet
or from a mail order catalog, a shipping charge is added. People accept
this as "fair." But only if they're told about it beforehand.
Early in the
sales process you don't have to be too specific. It's perfectly alright
to say something along the lines of "Of course, shipping the
documents will cost extra. That can range anywhere from $10 to $35,
depending on the supplier" Just make sure you give yourself some
leeway. But as soon as your client becomes serious, you should do
the research needed to determine all the "little extras"
from taxes, port fees, PFCs, delivery, and on and on, so the price
you quote will be the full price, the right price.
So what do
you do when you've sold someone a $350 product, made a $35 commission
(10%), and suddenly discover to your horror that the supplier is going
to charge $35 to FedEx the documents to your client? My advice is
to eat the commission and look on it as a tuition fee in the School
of Hard Knocks. Of course, there's nothing to prevent you from throwing
yourself on the mercy of the client and saying, "Oh, by the way,
I forgot to mention..." That's a call you'll have to make yourself
as you weigh that $35 against any future business you might otherwise
expect from this client.
The moral
is to learn the TOTAL cost early on and build it into the price.
Finally, when you start delivering documents to your clients, what's
the best way to do it? Personal delivery is far and away the best
method. You know the client got them and it's a brilliant way to differentiate
yourself from the storefront agency down the street. By the way, even
if you hand deliver documents, you can still charge a reasonable delivery
fee. After all, the documents have to get to YOU so you can hand deliver
them. As long as the client understands he or she is paying for "express
courier delivery," you should meet very little price resistance.
If personal
delivery is not an option, then the consensus among travel agents
seems to be FedEx. Other services have more attractive rates, but
few can match the FedEx reliability record.
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