Shopping online can be a lot of fun. Adding things that you love to your cart probably brings you much joy! You may notice that retailers often offer free shipping if you spend over a certain amount. You may notice others that offer a set shipping amount regardless of how much you spend. As a retailer yourself, you may be wondering how on earth other online retailers can afford to offer their customers free shipping or maybe you’re wondering how they determine a flat rate to charge their customers for shipping. If you’re wondering how much to charge for shipping then keep reading.
Offering Free Shipping
Offering your customers free shipping is probably one of the best incentives that you can offer them. Giving your customers free shipping works because essentially the shipping isn’t “free.” There are two methods that you can use in order to offer your customers free shipping.
The first method is to calculate shipping into the prices of your items. Some retailers overcomplicate this process. Essentially, all you have to do is determine how much it would cost you to ship that one item alone and add that amount into the price of the item. You can determine how much it would cost to ship that item by weighing it and determining the cost with USPS. By doing this essentially your customer is still paying for the shipping, they just don’t know it.
The second method you can use to offer your customers free shipping is only offer it to customers who spend over a certain amount. In this instance, you would technically have to pay for the shipping yourself. However, you would see a bigger transaction value up front because you have convinced your customers to spend more money and/or buy more items.
Often when you offer free shipping to all customers (having added the shipping into the price of the item) they have no reason to buy more than one item, essentially spending less money. But, if you can convince your customers to spend more money it’s worth it because you know that as long as their order weighs less than 70 LBS. you can ship it as a Flat Rate Priority Package. Plus, if you’re a master packer/folder (like me) and can fit the order into a smaller flat rate box you can pay less for shipping.
Offering Flat Rate Shipping
Ok, so maybe you’ve decided you’d prefer to charge your customers a flat shipping rate. Determining how much to charge doesn’t have to be a huge headache. Again, knowing how much it costs to ship different packages with different types of postage can help you decide how much to charge your customers for shipping. You can learn more about this buy reading our post, Shipping With USPS.
For example, I currently charge a $6 fee for shipping on all orders. I chose this amount because most of my orders are local so I know that I can send them using First Class postage and it will typically cost me no more than $5 as long as it weighs under a pound. Orders weighing more than a pound usually cost me between $6.95 and $8.50, but I know that I’ve added a couple extra dollars to the price of each item that should hopefully cover the extra shipping cost not covered by the $6 that they paid.
The downfall is that sometimes I have to come out of my pocket for shipping. So, my recommendation would be to ship Flat Rate Priority Mail and squeeze your orders into the smallest box possible if you’re going to charge a flat shipping weight and if the package weighs more than a pound.
So, you see, determining how much to charge for shipping really isn’t that complex. It’s easier to determine how much to charge for shipping if you know how much it costs to ship ad how much each type of postage costs. As always, if you have any questions, leave it in the comments!