Dropshipping and Shipping: Who Pays for Shipping?
To put it simply, as the owner of a dropship business your shipping costs are deducted from your profits.
Though this process is complex, the more you learn about it, the easier it will be! 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.
There are many ways for you to pay for shipping which makes it clear why it’s important to have a plan that works well then. Shipping costs usually make the customers decide if they want to checkout or not.
However, you are only able to pick the price that you are willing to charge for the product, not what it will cost to ship it. Depending on how big your store is, this could mean working with different carriers who have different rates.
Say you want to figure out your shipping costs in advance. It is good practice to find a model that suits you and your customer. Let’s take a look at some of the most commonly used approaches in dropshipping.
1 . Worldwide Free Shipping
Running a dropship business might mean you’ll offer free shipping in an attempt to get more customers. However, in reality – there are never any free shipping deals. It’s just a common psychological trick that tricks your customers into only paying for the item they purchase.
In this case, it looks like the item cost a lot more than it really does. This is because when you shop with an online dropshipper, you’re paying the shipping price separately upfront.
Some dropshippers provide a ‘free shipping’ option, which can be seen as a way of taking advantage of the customer. But don’t be fooled – free shipping is still very expensive for big companies. This is because it means they’re sharing the fee with the products instead of throwing it all on one product.
Instead of offering different items at various prices, you may want to promote a certain item and offer free international shipping for a month. You can also join Dropshipiness to find winning products for your store with suppliers who provide Free Shipping & other shipping methods.
2. Make Your Customers Pay Directly at Checkout
This is the simplest way to do it. You’ll be more in control of the pricing because you know what they’re paying for shipping ahead of time.
But this is one of those strategies where the chances are higher that customers will be unhappy with the outcome. You should check up on how your potential customers are reacting before you put it into place.
If you find out that a lot of people leave your cart before checking out, then you should know that they’re concerned about paying for shipping. Generally speaking, customers who see value in luxury products are more willing to pay for shipping…
3. Fixed Shipping Rate
You list all of the items in your store with their respective ship rates, and find the average ship rate for your entire product line.
This shipping charge is a flat rate that is charged for your customer regardless of the number of items they buy on your site or what kind of items they are buying.
This method could lead you to overpay for shipping from time to time, but in the end, you’re odds of getting a fair amount back are likely.
If that’s not enough to persuade you, once your sales are consistent, it might be worth trying the different rates and reporting back on which ones have worked best for you.
4.Returned Items Shipping Charge
When it comes to shipping, different suppliers have different policies. For example, let’s say the item is damaged or defective in some way. In that case you would normally enlist the supplier to cover the cost, but if your material wasn’t up to standard, then it would be your responsibility. The product will be sent back to the supplier and no return shipping would be necessary.
Customers should always feel welcome to change their mind and cancel an order as they please, especially if they don’t have to pay for return shipping costs. However, if you offer free returns, customers might be more inclined to buy from you because they would feel more assured of the quality of their purchase.
This tip is really important and it might be worth a bit of sacrifice when you start a new business. It can be tempting to keep on looking for ways of cutting costs at the expense of your bottom line, but sometimes if you want to make your business work in the long term, you might need to take some more short-term losses.
You pride yourself in providing great customer service. As a dropshipping merchant, it’s important to take a deep breath every once in a while and not get stressed over every little thing going wrong – because there are plenty of ways to increase sales.
If you want your business to do well in the long run, you need to focus on sales and make sure the customer is happy.
It’s important to create a quality customer experience from the very beginning. Initially, there may be a cost but everything else will magically fall into place.
Remember to keep an eye on your competition. Analyze what they do with shipping and it might give you some ideas of how to charge for shipping. Your competition has modeled their strategy in this area, so take a look at why they did that and if it works with your business too.
Studying your dropshipping competition in depth can help you understand their strategies better and learn what may work for your own business too.
Before beginning the shipping process, do your research. Research will provide you all the information you need on how to price your items, which shipping strategy works best for you, and when it may be time to switch.