Tuesday, October 13, 2015

Shipping charges

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     But wait! We'll double the offer! And shipping is free!

     We've all heard the pitch on cable for kitchen items or cleaning products. These pitches come fast and furious. They must work, or they would not be so plentiful. 

     There is a clue here that can be useful in any small business. If you sell online (and why aren't you?), take heed of the free shipping ploy.

     Sellers have learned that people hate it when you low-ball the price of an item only to tack on a shipping charge when they go to checkout. It's annoying to get all the way to checkout and then face another charge. When it has happened to me, I simply abandon the shopping cart and go to another website. 

     The thing that cable advertisers have learned is to include shipping charges in the price of the product and make a big deal of free shipping. Some sellers add a "handling" charge which can cost as much as the item itself. But they still get to emphasize that shipping is free. 

     Small businesses that sell through a website can tackle this problem in another way--by raising item prices. This accomplishes two things at the same time: you weed out bargain seekers and eliminate that annoying shipping charge.

     Example: Wendy is an artist who hand paints silk scarves with colorful and original designs. She sells at high end gift shops, shows, and through her website. On her website, she priced her scarves at $75 and up in the past and at checkout a shipping charge was added. Wendy decided to make changes. Today, all orders are gift-wrapped, priced at $100 and up, and shipping charges have been eliminated. She is realizing more sales. 

     Example: Ellen sells dozens of different teas through her website and ships to customers far and near. On orders of $25 or more, shipping is free. Under $25, buyers pay for shipping. It has worked well for Ellen. 

     Example: Tom sells all sorts of games through his website. They run the gamut from board games to older computer games. Some are small and lightweight, while others are large and heavyweight. His customers don't seem to mind shipping charges.

     Adding shipping charges to your sale can affect customers in different ways. Some are turned off by shipping charges. Others don't seem to mind. It depends on your market and how you work with it. 

     If your sales involve shipping, it will pay to experiment with the shipping charge problem. In general, the heavier and bulkier the item, the less concerned with a shipping charge a customer will be.

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