Shipping Cost / Shipping Charges for Inexpensive Products

[delcorsets]

For quite a while we've wrestled with how best to handle shipping charges for inexpensive products.

We have a lot of fairly inexpensive "widgets" that we sell by the piece, dozen, or gross. Some of them are small and will fit into a padded envelope, other are larger or more rigid and need to be packed into a box or a flat. Some items are plastic so are fairly light weight, other items are steel, so they are heavier, especially when purchased in dozens or by the gross.

We currently offer both USPS (Flat Rate, Priority, Express) and UPS (Ground, 3-Day, 2-Day, Next Day) shipping options, but as all merchants probably know, there is no inexpensive way to send a trackable package.

We receive a lot of feedback from customers who are unhappy that their shipping costs are sometimes more than the cost of the product itself, but I am really not sure how best to approach this problem. We cannot really offer free or discounted shipping, since for example discounting the shipping charge by $2.00 on an order where the total might only be $6.00 would basically remove all profit margin.

Many of our customers' orders are in the $10 - $15 range, so understandably it hurts to pay $6 - $8 in shipping. We considered trying to increase the cost of products to allow us to take a hit on the shipping, but because so many of our items are currently priced under a dollar, it becomes hard to do this without completely overpricing product to a point where shoppers will simply turn away.

Does anyone else have experience or ideas about shipping low cost items? I would love to hear from others who have similar issues.

[Ron Frigon]

Look into U.S.P.S. First-Class MailŪ Package Service. I ship small/lightweight stuff all the time. Cost is $3 - $4 and includes tracking. Really fast too, comparable to priority.

[lesliekirk]

Look into U.S.P.S. First-Class MailŪ Package Service. I ship small/lightweight stuff all the time. Cost is $3 - $4 and includes tracking. Really fast too, comparable to priority.

Good to know!

[delcorsets]

Thanks Ron... It looks like that might work for our packages under a pound... it's a shame the restrictions on weight and size are so tight.

[oliverands]

We face exactly the same issue, and it's a killer.

In terms of shipping services, USPS first class parcel is good as is DHL Smartmail. DHL typical comes in a little bit under USPS first class rates, but on delivery time and reliability DHL performs slightly worse than USPS. (They carry the package to the closest USPS regional sorting facility and hand off to USPS for last mile delivery.) Most of our customers are happy with the service, though.

Miva gives you the option of setting a minimum order. You could look into establishing a minimum order of, say, $12 or $15. This will keep some people from ordering just that $4 widget, but it will encourage others to add more items to their basket to hit the threshold at which it's profitable for you to ship. We used to do this when we had very low cost items in our store.

[Bruce - PhosphorMedia]

Miva gives you the option of setting a minimum order. You could look into establishing a minimum order of, say, $12 or $15. This will keep some people from ordering just that $4 widget, but it will encourage others to add more items to their basket to hit the threshold at which it's profitable for you to ship. We used to do this when we had very low cost items in our store.

I think your eventual success will be, as Todd brings up, about effective up-selling. The Dollar store aint making money by selling you something for a dollar :). Are there products that your customers ALL want/need? Can you get a good deal on them? For example, some craft/building tool? Or just promote more volume buying?

[delcorsets]

Thanks Todd and Bruce - I actually used to use the Minimum Order setting, but we decided to remove it years ago because of the all the people who would contact us with the nasty "well I guess you don't need my business" emails when they couldn't check out with a small order. Of course back then USPS flat rate shipping envelopes were under $4. so maybe people were more willing to pay that shipping amount for small orders.

In your opinion, do you think giving shoppers an option to "override" a Minimum Order amount would help? Something like.. "Your order of $8.00 does not meet our Minimum Order amount. You may override this minimum and place your order, however shipping costs may not be as economical." I suppose it could be a simple conditional message that displays any time an order total is under $15., and would simply require the shopper to continue through checkout to "override."

The other idea I've been toying with is offering a shipping discount as total order value increases to incentivize larger orders. But, that still doesn't really help the customer who just needs that one very specific widget that we offer and nothing else. The incredibly low shipping rates that are available to sellers in China have really skewed everyone's opinions about how much shipping should cost.

Bruce, you're absolutely right.. I agree that ultimately I need to swing our business to focus on larger B2B sales, but until that happens we definitely still need to be concerned with our home sewers and crafters. We've been feeling a crunch this year, and I think it's due to many of our supplies now being available to the public from factories via Alibaba, or from hobbyist sellers offering their overstock on eBay and Etsy. We have used Miva's Marketplaces features to offer our main product lines on Amazon, Etsy, and eBay, but even with our sales from those Marketplaces, orders are still down from last year.

[oliverands]

You know Amazon marks low cost items as "add on" items or something similar that does not allow them to receive Amazon Prime free shipping unless the order value reaches a certain point. I think customers get that it costs to ship an order and if the price of the item is very low it's not cost effective to ship just that one item.

You could take a similar approach and either use the minimum order value (along with a note saying because there is a cost involved in packing and shipping items, a minimum order value must be met) or simply charging a higher base shipping amount for low dollar orders along with a note like the one you mention. The latter approach, actually, might be able to be used to your advantage for upsell purposes if you use language that says "add $x more to your order and shipping will decrease by $y" along with a recommended additional low cost product.