The owner of the dropshipping business, you, pays for the shipping.
Well, it isn’t as simple as it sounds. In your dropship business, the shipping costs do get taken out of your pocket. However, it’s not something that happens directly. Rather as a store owner, you can decide whether you want to separately charge your customer for shipping or add the shipping cost as part of your item cost.
All these different ways of paying for shipping makes it easy to see why it’s important to come up with a shipping strategy that works for you. Shipping costs usually have a huge influence on whether customers are willing to hit the checkout button or not. Yet, you only have control over what you will make the customer pay, not on what shipping the items would cost you. Depending on how big your store is, you could be working with many different carriers who have different prices for their service, which can be the formula for a headache.
It’s for the best that you figure out beforehand how to form your shipping costs. You want a model that’s good for you and your customer. Let’s take a look at some of the most used strategies used in dropshipping.
In a dropship business, you just might feel the need to make the shipping free. Now, shipping is never actually free. It’s simply a psychological trick where customers feel like they are only paying for the item. In this case, dropshippers already add the shipping fee to the cost of the item. So, from the customer’s perspective, it looks like the item itself cost that much.
Some dropshippers do this thing where if the total cost of different items surpasses a certain amount, the shipping is free. Again, shipping is still in no way free. However, the fee of shipping is divided among the items instead of having each item look too pricey. Instead of different products, you can also make it that shipping is free for a certain product for a month. Sell The Trend connects you with Top Trending items and suppliers who offer Free Shipping and other shipping methods.
This is the most simple strategy you can employ. This one also has the most transparency between you and the customer. Whatever you have to pay for the shipping of the product is directly transferred to what the customers have to pay on checkout.
However, this one of those strategies where the chances of customers being unsatisfied are more likely than not. If you employ this approach, you should check up on how your potential customers are reacting. If you notice that a lot of the carts ultimately don’t reach beyond the checkout page, that would be your cue that your customers aren’t willing to pay for shipping. In general, customers who are into luxury items have more chances of paying for shipping than the ones buying regular products.
In this case, you list all the items you are selling in the store and find out the average rate for the shipping of all products combined. Now, this is the exact amount you charge your customer for shipping regardless of how many items they are buying from your site or what kind of items they are buying.
This method will lead you to pay more than what you should have to pay for shipping some days and less on other days. However, at the end of it all, if your average calculation is right, your earning is likely to be fair. On top of that, once your sales have become steady, you can change the shipping rate based on what you think is fairer for each item.
This is one of those things that are dependent on your suppliers. Different suppliers have different rules for who pays for shipping costs in this case. If the item is damaged or defective, it would typically be taken out of the supplier’s pocket, as in this case, you are in no way responsible. The item would be shipped back to the supplier and no return shipping would occur.
In some cases, if the customer decides they don’t want the order anymore after it is already on its way, you can make the customer pay for return shipping charges. However, if you are willing to offer free returns, your customer might become quite impressed with you and would be more willing to purchase from you.
This is one of those cases where you might have to let go of profit to generate sales for the time being. However, once you have a better idea of the costs involved in an online dropshipping business, you might be able to find the right balance.
Your main focus is on your customers. As a dropshipping business owner, you can’t get stressed out over every little loss you have over shipping. Not if you want your business to go well in the long run. At the end of the day, your ultimate goal is to have as many sales as possible and make sure customers are happy with your service. From the customer’s perspective, buying from you should be a happy occasion. Initially, it might cost a lot but eventually, everything else will naturally fall in its place.
Also, don’t’ forget to keep tabs of your competitors. See what they do when it comes to shipping and it might give you a better idea of how to charge for shipping. Your competitors have modeled their shipping free the way they have for a reason. If you study enough and notice the patterns, you would be able to understand their reasons and see if they apply to your dropshipping business.
In general, before you decide on any kind of shipping strategy, you should do ample research. Research will provide you all the answers you need on how to price the items, which shipping strategy will suit your business, and when you should switch it up.
By Lisa W.
Lisa is an integral part of the Sell The Trend Family. She has a keen eye for spotting products right before they become big winners!
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