2019 Business Shipping

Discussion in 'General Business Forum' started by Cellador, Nov 7, 2019.

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  1. Nov 7, 2019 #1

    Cellador

    Cellador

    Cellador

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    Hi all! I'm sure this has been discussed before but my search came back with too many results, many of them very old threads.
    So, I'll just ask again-how do you handle your shipping cost estimates for customers for online sales? Do you increase prices enough to cover shipping? Do you give a flat rate per item? Or go based on dimensions/weight?
    I've gotten a couple of sales & ate a portion of the cost of shipping. But, if I charge per item & can easily fit those items in a flat rate padded envelope or box, then I'm potentially overcharging.
    How do you handle it?
     
  2. Nov 7, 2019 #2

    amd

    amd

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    Here's how I handle it - I know some will disagree with me, but that's the best part about running your business: YOU get to decide what kind of customer service you want to give and what works for your profit margin. I have been all over the place, and last year finally sat down and looked at my numbers hard core for the type of traffic that my website does. This works for how my customers order soap online and still keeps me profitable.

    I do a flat rate shipping fee of $4.
    The rare customer that orders 1 bar, this covers 100% of their shipping (6x9 padded envelope, USPS first class).
    For two bars I can ship for $4.75, so I only pay an additional 75 cents for that order, which my profit margin on two bars can easily cover without breaking bank. Seriously, if losing 33 cents on a bar of soap causes you heartache, then you need to readjust your pricing. (Again, this goes in out a 6x9 padded envelope, USPS first class)
    For three bars, things get tricky because I can get 3 bars in the 6x9 envelope, but it costs around $5.75. $1.75 cutting into a 3 bar profit is a bit hard for me, but at this time I have only sent out 3 bars once since I switched to my flat rate shipping.
    Anything over 4 bars I ship in a priority mail padded envelope for $8. A 4 bar order is a rare occurrence as well. Most of my customers who order online will order their soap for a whole year - so 10+ bars is a typical shipment for me. Covering the $4 shipping difference on a $60 order is pretty much pennies at that point.
    For really large orders (for example, I have one lady who orders 40+ bars and 100 lip balms every year for Christmas gifting) I will switch to a USPS Regional Mail box. Those really large orders are typically custom, so I have to invoice them separately and will increase the shipping rate to $10. I think the example lady's order this year cost me $12 to ship that way. I haven't had a regular online order that I've had to switch to a Regional box.

    I think the most important thing is that I have my prices set to cover costs - I factor in sales taxes, 15cents per bar for shipping materials, and fees that I have to pay for online sales and CC fees. My retail price is typically 4.5 to 5 x my costs. I've worked extremely hard over the last year to keep my costs low so that I can still make an affordable "luxury" bar of soap at a reasonable price and be able to factor in these costs without the customer feeling the pain or losing my shirt.
     
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  3. Nov 7, 2019 #3

    shunt2011

    shunt2011

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    I use mostly regional rate or padded envelopes. Very rarely to I use flat rate.
     
  4. Nov 7, 2019 #4

    Cellador

    Cellador

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    This is interesting @amd.
    I had an order yesterday for 2 bars of soap. I took it to the post office & asked for the most cost effective way to ship. They told me it was $7.35 for a padded envelope (they also told me only to ship via Priority Mail). I'm guessing First Class doesn't have insurance & tracking....?
    Basically, what I was told was that anything I sold was going to ship for around $7 minimum. I have margins to cover $3 shipping on a couple of bars, but not just one bar. Also, my website allows for flat fee per item, dimension/weight estimate, or free shipping. So, I have no way of charging a flat shipping fee for an entire order.
    I don't want to lose but don't want to gouge or issue a ton of refunds either.
     
  5. Nov 7, 2019 #5

    Lin19687

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    I use Regional rate A boxes ONLY and charge $8 no matter how many they buy.,
     
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  6. Nov 7, 2019 #6

    amd

    amd

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    This may vary depending on the size of your bars - most of mine are 4-5 oz, so if you have larger bars it makes sense that it will be more. I get a tracking number with mine, so it's included. For 1-3 bars of soap, I don't worry about insurance.

    Oh, that is so nice to have that feature on your website! I have a basic Square market store on my website, so I had to set a flat fee. I did try the Square store through Weebly (my website builder) but the price difference between the builder packages was ridiculous, so I decided to go back to the Square market store. [Like seriously, the price went from $299 a year to $60 a year. If I had daily sales on my website I could probably justify it, sadly I don't/can't.]

    There's a lot of things to consider when setting shipping costs, what works for one person (or one person's customers - mine won't pay $8 shipping fee unless it's a custom order) may not work for another... and I've probably tried them all! I forced myself to sit down for a good 8 months last year and figure out how much I was shipping out, what it cost, what customer paid, and what it did to my profit margin for every single order and item shipped. I made adjustments, and then made more adjustments. This year the only shipping that put me in the negative was my Etsy store, which I'm slowly closing as listings expire.
     
  7. Nov 7, 2019 #7

    Cellador

    Cellador

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    I found another feature today (I'm on GoDaddy) that allows me to set a flat fee, with different costs based around a weight range. So, I enabled this & the weight/dimension based shipping costs. This way, people can choose themselves.
     
    amd likes this.
  8. Nov 8, 2019 at 10:27 AM #8

    SoaperForLife

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    I offer $3.50 first class package for 1-2 bars of soap. I believe that the weight limit for first class is 13 oz. Three bars and up it's $8.95 and anything over $60 in their cart, shipping is free. Weebly allows you to set up shipping based on the dollar value of their order so it's pretty easy to do.
     
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  9. Nov 9, 2019 at 1:20 PM #9

    Lin19687

    Lin19687

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    I also wanted to say that @amd is correct. It all depends on your buyers.
    I do local Fairs/Markets so my customers are all local and buy at least 6+ bars at a time- usually in the Winter when I am not around.
    I also will drive an order locally or meet up with some of my customers. My website is just not busy enough to handle different shipping weights. I have the Free SQ website for now and own my domain
     

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