Selling a lot of products and even setting high prices with a lot of profit margin also may result in business loss. How? One mistake in calculating shipping cost and in extreme case you can fall as victim of your own eCommerce shipping blunder, wasting your time, effort and investment.
And set the shipping right, it can boost your conversions like anything else. Set a free shipping to encourage customers buy from you. This is one of the most well known conversion optimization tips. However, there needs to be an intense calculation based on your cost of products acquisition, advertisement cost and other factors.
Needless to mention but we’ll pin it here “Dropshipping is a growing business trend. However, you can’t ignore the original eCommerce model.”
What many people realize late is the complications while running your Dropshipping business–
You list some product from some manufacturer in your site and advertise it well, but then the product supplier increases the price and that is the same time when you have accepted a bulk order.
This is not an uncommon scenario if you regularly visit the dropshipping forums. Apart from that, you will also find some other problems of dropshipping such as
- Poor or roughly branded product, if you have tried white-labeling the products that you are trying to sell.
- Damaged product due to the manufacturers’ or shipping company’s negligence, which costs you your goodwill.
- Late delivery of the product to the buyer. Though the manufacturer may have processed the order as soon as they found it, it may be due to the improper filing of the customs document.
- Due to the lack of knowledge of the manufacturer for shipping on the international market and specific countries and states that you might need to dropship.
For these and many other reasons, the professionals involved full time in selling products online are cautious and apply some tricks to avoid these scenarios, such as:
- Check the reputation of the manufacturer for white-labeling or sometimes even purchase to drop ship at their location to cross-check.
- Offer 100% return policy to the customers in case of dissatisfaction to avoid bad reviews. (Obviously increases shipping costs but saves your effort on eCommerce marketing )
- The dropshippers are well informed about the customs and duties about the country or state and the product needs to be delivered. (Sellers even provide these information before-hand)
- Work with dropshippers who are well known about the territory where most of your customers are from. (You are actively advertising when you are dropshipping so you can make a guess)
But these problems don’t just arise when you are dropshipping and if you have been into selling business for some time – you may already know about it!
How do you avoid these when your business model is not only dropshipping?
Let’s first work on setting an appropriate pricing for your product. But you need to keep thoughts about these points regarding shipping that affects your profit margins.
- Package size & weight
- Departing & Destination Country
- Tracking and Insurance
Apart from these, as a seller, it is important that you take into consideration about
- Cost of product acquisition (if possible from multiple merchants)
- Packaging (the type of packaging recommended for product – economy and security wise)
- Shipping Costs (which shipping company offers cheap, fast and reliable service?)
- Custom & Duties (Are there any declaration documents that need to be made?)
- And finally your profit margin calculation – How much can you make by selling a unit?
Becoming a penny-pincher while packaging – there’s no shame in it if you’re not losing goodwill!
Depending on the product that you are selling, there may be a predefined standard for packaging. You can either stick to that standard or be a bit more innovative while saving cost on packaging. However, the most popular packaging methods are corrugated boxes, paper or cardboard boxes and paper bags.
Too much information can’t harm – Especially when it’s about the product or country you’re shipping to!
Make sure that you know about the regulation of the country where you are shipping your products. There are some weird product laws when you try to sell around. Furthermore, knowing about the customs and duties will help you educate your customers and dropshippers. It will become useful when you are trying to provide a flawless buying experience to your customers.
Installing a few apps may be additional baggage but you won’t think so when you compare the price!
There are a few apps that connect to most of the major shipping service providers. And there are also some apps which meet specific purpose for a specific shopping service provider. If you look at the Shopify app store, you’ll find apps such as ShipStation which will integrate your shop with multiple shipping companies. And if you look at WordPress plugins directory, you’ll find those along with plugins like USPS WooCommerce Shipping Method and others. Installing these will only help you cut your shipping cost.
Here are some of the popular shipping company names that you should definitely try comparing costs with, whenever applicable:
- USPS Business Gateway
- Canada Post Solutions for Small Business
- UK Royal Mail Online Business Account
- Australia Post Business Credit Account
- UPS Business Solutions
- FedEx Business Center
- DHL Express
If you are shipping within a country or territory, there could be many other logistics providers which will be worth checking. And if you are not able to offer flat rate or free shipping to your customers, we recommend that you display live shipping rates based on shipping address and shopping cart content.