One of the most important parts of running an eCommerce dropshipping business is finding the best way to ship. Keeping shipping costs as low as possible is important for both your business and your customers. This article will show you how to pay for shipping costs in a dropshipping business.
Who pays for shipping costs in a dropshipping business?
The answer is that you, as the owner of the dropshipping business, will pay for the shipping costs.
Not everything is as easy as it seems. In a drop-shipping business, the shipping costs are taken out of your profit. But it is not something that happens right away. Instead, as a business owner, you can decide if you want to charge each customer separately for shipping or add the cost of shipping to the price of the product.
Since there are so many ways to pay for shipping, it’s easy to see why it’s important for your business to come up with a shipping plan that works. How much your products cost to ship has a big effect on how much people are willing to pay for them.
But you can only change the price you charge the customer. You can’t change how much it costs to ship the goods. Depending on how big your business is, you might have to deal with a lot of different carriers, each of which charges a different fee for their service. This can make things very complicated.
How to figure out how much shipping will cost when dropshipping
It’s best to figure out how to figure out your shipping costs before you need to. You want to find a model that works well for both you and your client. Let’s look at some of the most common ways to figure out how much shipping will cost when dropshipping.
The real cost to ship
The real shipping cost will be worked out so that customers can decide for themselves how much shipping will cost. You just have to find out how much shipping will cost from your suppliers and tell your customers on your online store.
When a customer buys a lot of things from different places, it’s harder to figure out how much shipping will really cost. This could easily become too expensive for the people you want to buy it. Don’t forget that your clients don’t know that you dropship. If they have to pay for shipping for each item separately, more carts may be left empty.
If you want to base your shipping plan on real shipping costs, keep an eye on how many buyers abandon their carts to see how they react to the costs.
Costs of shipping on average
A flat-rate or average shipping fee is another fee that can help you plan your delivery better. Since every customer pays the same shipping rate, it’s easy to figure out how much shipping will cost. Adding up all of your shipping costs is the easiest way to figure out your flat-rate price.
If you sell a lot of different products with different sizes and weights, put them into groups and charge a different flat fee for each group.
When you carefully figure out the flat rate shipping, you will lose money on some transactions and make money on others, depending on the products you order. The long-term goal of this plan is to get back to even.
Shipping is free.
Online stores are under a lot of pressure to offer free shipping these days. On the other hand, shipping that is “free” is not really free. It’s a way of marketing that tries to get people to spend more money and feel like they’re getting a great deal. In reality, most merchants, including drop shippers, add shipping costs to their final prices so they don’t lose money.
Include the cost of shipping in the price of the product and offer “free shipping” to get people to buy from you while still making a good profit.
Promotion / Shipping in Steps
This method combines all three of the other ways to figure out shipping costs. It’s a great way to keep customers happy and keep your business from losing money because of shipping costs. But it’s only useful if you have a lot of data and analytics to figure out which method is best for each situation.
Shipping Fees for Items Being Sent Back
One of the ways your suppliers can help you is in this area. In this situation, different suppliers have different rules about who has to pay for shipping costs. If the item is broken or doesn’t work, it is usually taken out of the supplier’s pocket. In this case, however, you are not at all responsible. The item would be sent back to the supplier without any return shipping costs.
If the customer decides they don’t want the product after it has already been shipped, you can make them pay for the return shipping. But if you’re willing to let people return items for free, they may be impressed and more likely to buy from you.
This is one of those times when you might have to give up some income for now in order to boost sales. After you learn more about the costs of running an online dropshipping business, you might be able to find the right balance.
Different Ways to Pay for Shipping When Dropshipping
Once you know how to figure out shipping costs for your dropshipping business, keep reading to find out which of the most popular dropshipping options will work best for your online store.
Raise the price of a product to cover the cost of shipping it.
Based on the above shipping calculation, there are several ways to raise the price of your product to lower your shipping costs over time. You can charge what you spend, use a flat-rate fee, or use the tiered shipping system that was explained in the last section.
Expect changes in shipping fees from your suppliers.
The cost of shipping changes throughout the year. Around the holidays, they can go up by 10% to 30%. Before and during the Christmas season, all shipping companies change their prices for labor and fuel costs.
Keep an eye out for emails from your dropshipping suppliers or shipping companies if you want to know when shipping prices change.
Know what your customers want when it comes to shipping.
The most important thing about a dropshipping business is its customers. Customers will want to come back if you are honest about how long it takes to ship their orders. Always give your customers a tracking number so they can follow the progress of their package.
Also, be honest about how long it will take to ship, even if it’s longer than most people are willing to wait. It’s better than having them think their stuff came late.
Size down the packages
Your package’s size and weight are a surefire way to save money on shipping costs. Your goal is to make your item as small and light as possible.
The bigger and heavier the box, the more it costs to ship your product to your customers. Larger items can take longer to ship, which makes buyers less likely to buy other things from the same store again.
It’s hard to keep a product’s weight in check, but you can change the way you package it. Many people who are new to drop shipping think that they should start with a bespoke carton box, but this requires a minimum order quantity (usually 500) and lowers the profit margin.
Putting things in boxes may cost money. Luckily, dropshipping vendors offer packing for free. Until you have enough money to customize your own packaging, it’s a good idea for people who are new to drop shipping to use the packaging that their suppliers offer.
Use every way you can think of to save money. Now that you know how to get free boxes, you can focus on making them as small and light as possible to save money on dropshipping shipping costs.
Pick a good shipping company.
Depending on which carrier you choose, you might either break even or make money. If you’re dropshipping, you can work with a number of well-known shipping companies. Most dropshipping companies work with more than one shipping company to offer a range of prices and shipping options.
So, as a drop shipper, you can compare the different prices that these companies offer and choose the best option for you.
Compare how much it costs to ship in different countries
Shipping to different countries can have a big effect on how much it costs to ship. Another thing to think about is the fact that many international shipping companies won’t go to remote islands.
To avoid this, set up separate shipping zones for each country you want to send to. Take the time to find out how much it costs to ship to these different countries. After that, change the shipping cost for each customer based on where they live.
Customers who live in countries where shipping is cheaper can get their orders shipped for free. This gives them an extra reason to finish their orders.
So, you need to be clear and honest with your customers about shipping costs. Don’t say “free shipping” and then make the buyer pay to ship when they check out. Make it clear that only a few countries offer free shipping.
Shipping costs are something that every drop shipper has to deal with. It could cut into your profits and be a hassle to pay for. But with some research, time, and effort, you might find a way to cut shipping costs and use the money you save to grow your business.