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What to Charge Your Customers for Shipping
By James M. Theopistos


Many of our customers who have us drop ship their orders had to at some point decide how they were going to charge their customers for shipping. It might seem a minor decision to make but one you should not put off until the last moment. Shipping rates can make or break a sale if you are not careful so a well crafted pricing model is important. I have put together 3 different ways to help you decide how to charge your customers shipping. If you have your own system and you find it works, by no means do I recommend you change. These are just suggestions you might want to consider, especially if you are just getting started.

1. Charge a flat rate. This is perhaps the easiest method. It is simple and to the point. Regardless of the quantity or size of the prints being ordered a customer pays one single rate for shipping. Initially you will want to get an idea of how much it costs to ship your prints whether it is drop shipped or are shipping the order yourself. Allow yourself some flexibility in modifying this rate. If shipping it yourself you might discover when shipping to the neighboring state the prices averages one amount and shipping the same order contents to another state costs you a differing amount. Keep an overall average and try to adjust your rated sccordingly. Over time you will not need to tweak your shipping prices as often. The point is to keep what you receive for shipping at that average so it does not hurt your bottom line in the long run.

2. Free Shipping. It may sound enticing to the buyer but you still have the expense to contend with. Choose if you want to eat the cost or increase the price of your prints to adjust for shipping expenses. For the latter you will probably want that adjustment to be based on how you determine the flat rate option above. You might want to make an exception for International orders but everyone likes free shipping even if its really just built into the cost of the price they pay for your print.

3. Charge what FinerWorks charges. Many opt for this method. I think we currently have a nice “Goldilocks” zone when it comes to shipping rates. If I had my way we would love to charge less but in general I think people are not too turned off by the price. In general it covers not just the postage but also the labor costs associated with packaging and the packaging supplies. Some will also pad their pricing based on this. One common scenario for some of our online sellers who sell their prints at various sites is to charge what we charge for the first print plus a little extra for each additional print the customer purchases within an order.

My last bit of advice is be careful and not look at shipping as a profit maker unless you are in the business of shipping. Remember you are in the business of selling your work. It might be tempting to try to skim a little off the top but in general you should keep it such that it does not have a negative impact on the buying experience or your customer's perception of how you do business. If you find you need to because of unexpected costs from other factors, consider first raising your prices for your work a little instead to help offset your shipping costs. In the end the idea behind shipping charges has always been to cover what it costs you to have a product shipped to your customer.

Category: Selling and Self Promotion
Created: Wednesday, November 6, 2013, Last Updated: Wednesday, November 6, 2013

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CereusGraphics
Tuesday, November 12, 2013 6:57 AM
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