How do I charge for shipping for my online business?
How do I charge for shipping for my online business? This question is frequently asked by the seller who is learning the fundamentals of How to start internet marketing. The obvious answer is “you make more money from your sale if the customer pays the shipping!”
• You might have competition that gives free shipping.
• Your item might cost the customer more than the shipping.
• Your product may be an e-product that can be shipped by e-mail, for FREE!
• Your product may cost more than a similar item in a store if you charge for shipping.
• The shipping may be the determining factor that prevents your product from selling.
In answering the question of “how do I charge for shipping for my online business?”, I have had to deal with every issue above! My competition did give free shipping. So I gave a price that was a few cents less than the competition with a free gift. I could control the price of the free gift (which can be more of the same product) but you have no control over postage, freight, tariff, fuel costs etc.
Many times I have sent a product out that the cost of postage exceeded the product. My first exposure to this was with E-Bay. I have since found that if you are filling a niche of need, and your products are not at K-Mart, hence the postage is incidental when it comes to finding and receiving a product of need. I also saw a trend that the postage expense was “evident” but not a true concern of the buyer. Here is a tip to remember. IF YOUR COST TO SHIP IS $8.95, DO NOT CHARGE THE CUSTOMER $15.00 “shipping and handling”! Your customer will remain your customer out of loyalty, but if you “cheat” them over a “handling charge” they will not trust you again! You say you have an expense in a shipping box and packing materials? Incorporate these incidentals into your costs of goods.
If your products are e-books or software that can be sent via e-mail, you can definitely advertise “free delivery” not free shipping.
If you happen to have a product that also is available on a store shelf, remember, not many can get to the store for free! I watched the bookstore industry shrink to almost non-existence in San Diego County. Knowing the owners, I asked what are you going to do? (The bookstores closed by the dozens.) The bookstore owners all told me that they were moving the used books to their garages. (The square foot rent rate had become too much for the California bookstore venders.) From their garage the bookstore operators placed their books on E-bay. Paperback and hard cover books selling for $4.50 on E-bay would cost OVER $4.50 for Priority mail, THE NUMBER ONE CHOICE OF THE BUYER! Media mail rate is a fraction of the cost, but the buyers did not want to wait 2-3 weeks to get their new purchase!
I HAVE NOT SOLD A SINGLE PRODUCT THAT A BUYER WOULD NOT BUY BECAUSE OF THE PRICE OF SHIPPING. If you feel that shipping will prevent a person from buying your product, then test the market. Place the product up for sale and see if customer will buy. After the customers buy, ask them if the shipping cost was a factor. THEY WILL TELL YOU.
Remember, you are in a niche market. Your product can not be found at Wal-Mart, your customer may live across the nation or in another nation. The price of fuel IS A FACTOR if your customer has to drive to pick up a product similar to yours. Rising fuel costs now more than ever promotes the shipping of your product to them. In most cases, it is cheaper to mail your product than for the customer to drive downtown and back home again.
The customer is willing to pay to have their purchase sent to them ASAP with the convenience of having the product delivered to their door. Note: Always ship in an expeditious manner. I SHIP six days a week. If an order comes in at 3:00 PM, I get it in to the post office by 4:30 when it closes. This is good business practice and is the best way to build and keep good customers!
So, how do I charge for shipping for my online business? Charge only the amount that will show up on the package, add a gift or bonus if you have competition, keep a few cents under the competition and ship the same day as the order arrives.
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