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Shipping charges vs. Adding Shipping to Price
votrechien




msg:4503653
 8:32 pm on Oct 3, 2012 (gmt 0)

I've decided that this winter (which is our off-season) we'll begin offering $9.99 flat shipping on all orders and free shipping on all orders over $199, opposed to our current system of charging price + shipping. Our items are heavy and on average cost about $25 to ship. Subsequently, we'll simply be adding the shipping cost into the price. Our actual overall prices, will in effect, not change at all.

We're the price leader on most of our products. However, I'm worried that now we won't appear to be so economical, despite our prices not having changed. We also have at least one major competitor who prices shipping separately as we currently do.

Currently
US $99.99 + $35 shipping
COMPETITOR A $145 + $7.99 shipping
COMPETITOR B $110 + $37.99 shipping


New Format
US $125 + $9.99 shipping
COMPETITOR A $145 + $7.99 shipping
COMPETITOR B $110 + $37.99 shipping

I'm sure we'll compare more favorably to competitor A now. However, I'm worried that competitor B will now appear to be the price leader. At the same time, I think consumers may be more quick to dismiss companies with high shipping and therefore we'll compare more favorably to both companies.

What's your opinion?

 

jwolthuis




msg:4503740
 11:20 pm on Oct 3, 2012 (gmt 0)

How are you going to handle shipping to Hawaii, Alaska, and international destinations?

dpd1




msg:4503749
 11:34 pm on Oct 3, 2012 (gmt 0)

I would either continue doing it the way you are, or figure out a way to make the shipping "free". Because in-between kind of seems like it won't take full advantage of one or the other really. With $99, you by far seem like the cheapest. With free shipping you still seem like the best deal, because it's easier to promote free shipping and make an impact. With $125 and still paying shipping, it's sort of like... Meh, to me. But that's just my opinion.

oliondor




msg:4503886
 8:33 am on Oct 4, 2012 (gmt 0)

Shipping should be free on any shop even if it's included in the price !

piatkow




msg:4503905
 9:46 am on Oct 4, 2012 (gmt 0)


How are you going to handle shipping to Hawaii, Alaska, and international destinations?

Over here cheap shipping deals normally restricted to the mainland so I doubt if it would be unreasonable to confine the deal to the "Lower 48".

Nobody in their right mind would expect a domestic shipping deal to be extended to an export order. On the other hand, some customers that I have come across over the years .....

jwolthuis




msg:4504130
 5:45 pm on Oct 4, 2012 (gmt 0)

Shipping should be free on any shop even if it's included in the price !


In my experience, products with separate shipping convert much better than free-ship products (with shipping cost built into the price). I think that most customers look at out-the-door pricing, and are not fooled by free shipping offers where the cost is buried in the price. They want a fair shipping cost, that's all.

Or course, if you want to simply eat the shipping cost, you'll get plenty of orders. Lose money on every sale, but make it up in volume.


I doubt if it would be unreasonable to confine the deal to the "Lower 48"


Agree, but what I was wondering is if you have a separate deal for HI/AK customers, and another deal for Canada/Mexico and International customers. Something like $19.99 to HI/AK, $39.99 to Canada/Mexico and $59.99 everywhere else.

I'm aware that you already have $25 built into your new pricing. How do you make your higher priced products appeal to customers outside the lower 48?

mattb




msg:4504134
 5:56 pm on Oct 4, 2012 (gmt 0)

I think your test is a sound one. Our audience appears to accept a shipping charge as long as it is a fair one. And by fair, it has to be less than what it actually costs. Putting charges at or above actual cost can be perceived as a trust issue. The only way for you to find out is to try.

pdinis




msg:4514306
 6:45 pm on Oct 31, 2012 (gmt 0)

hello votrechien,

can you share you current e-fullfiment provider ? Shipwire or else?

Thanks

Paulo

ssgumby




msg:4514707
 3:20 pm on Nov 1, 2012 (gmt 0)

I would suggest keeping your site as-is, open a new site with your proposed business model and compete with yourself.

votrechien




msg:4516856
 7:28 pm on Nov 7, 2012 (gmt 0)

can you share you current e-fullfiment provider ? Shipwire or else?


We use a small local fulfillment company (of which there are tons in almost any city nowadays)

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