Wednesday, 23 January 2013

How To Handle Increase In Shipping Costs

   I've noticed a lot of people on forums talking about USPS's increase in shipping. Now, I'm in the UK, myself, and our shipping rates went up last year. It didn't affect my business, though. However, as an international buyer, higher postage prices might well put me off.
   There is a way around this.
   A lot of people are put off of buying things if the shipping price is too high. For example, if an item costs $15 and the shipping costs $10, that would certainly make me turn tail and leave. That much for shipping? No way. However, if the prices were adjusted to $20 for the product and $5 for shipping, the full shipping fee IS being payed for, and you still make the same money from the product, but by merging the prices, buyers are more likely to come to you.
   And because the price of the product has increased, you may be able to offer local shipping for free, assuming that the $10 shipping was for overseas, and shipping within your own country is only $5. That's certainly a nice upside! I'm always more attracted for free shipping within my own country.

   Now, some people I've spoken to don't like this idea. They consider it lying, and in a way, it is. But the buyer is still paying the same amount as they would before hand, and the seller isn't making any extra money. There's nothing sinister going on behind it at all, it's quite straight forward.
   This is usually how companies are able to offer "free shipping". Being businesses they get lower shipping rates, and are able to merge them into the price of the products and give what appears to be free shipping.

   Of course, the price of the shipping can be used to gauge how fast a product might arrive, or how safely. Higher shipping certainly suggests to me that the product will arrive quickly and safely. But at the same time, I often consider the fact that items shipped for a lower price arrive just fine! But if you don't want to split the shipping in such a way, and would rather your customers knew how high the shipping truly was, then leave the costs as they are. At the end of the day, the shipping prices are the shipping prices, and that won't change.

   This "solution" comes down to personal preference. I have merged shipping with product price in a part of my own shop, because I felt the need to add tracking to my more expensive products, and tracking is expensive. So instead of putting people off of buying with higher than expected postage prices, I split the price of tracked overseas shipping right down the middle and put half of it onto the product price. This has also meant that shoppers within my own country get the item shipped for free, also with tracking, because local tracking is half the price of overseas tracking. I see it as the right thing to do, for me, because it's what I would prefer.

   This post is merely my own suggestion and by no means should you feel you have to follow it.



2 comments:

  1. Great tips! Thanks! Be sure to keep us updated!

    -Panamerican Shipping
    Panama Shipping

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  2. Organizations that offer pickup services might be more financially savvy for your business. Having representatives rush to the mail station or shipping company to drop a package via the post office requires significant investment and costs more cash. Numerous claim to fame shipping organizations will offer free pickup administrations.

    ReplyDelete