How to Fix Shipping Cost Without Ripping Off Your Customer

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The process of determining the right shipping cost, including Australia post parcel costs, for your supplies, is very vital for the success of your business. A cheaper shipping cost will enhance customer retainership and win new customers for you.

 

There are many factors that determine the best shipping method for you. Some of these factors include the size of your company, your business model, lifecycle stage, among others. You need to balance things up in a way that will meet the needs of your business and those of your customers.

 

Also, you need to have a strategic product pricing policy that covers the shipping cost. You have many options that will lead to the creation of a perfect pricing strategy that will be a source of strength for a shipping price structure.

 

What are the Shipping Costs?

 

There are many variables that determine shipping costs such as package dimension, delivery speed and your average shipping cost. You need to put these variables into consideration so that you can arrive at the perfect cost.

 

Why is this process important?

 

When calculating the shipping cost, you need to consider your budget and the needs of your customers. You should understand how charging too much or too little will affect the behaviour of your customers towards your business. If you charge too much, you may lose customers to your competitors and if you charge too little, you may not be able to make enough profit that will sustain your business.

 

Types of Shipping Costs

 

There are three major types of shipping costs – calculated shipping, flat-rate shipping and free shipping.

 

Calculated Shipping

 

Before listing your product, you should measure its weight and dimension, which will be used to arrive at a calculated shipping cost. The measurement of the package and the location of the customer will trigger an automatic calculation of the shipping charge.

 

Flat-rate Shipping

 

Flat-rate shipping does not consider the weight and dimension of the product. It is a perfect option for the majority of small businesses because it is reliable and convenient. Big companies have many things to think about, and that is why a flat rate may not work for them.

 

Free Shipping

 

Many customers like free shipping, but is there anything free in today’s world? As a business owner, you can take advantage of free shipping to woo customers. You can absorb the shipping cost or build it into the listed price. Also, free shipping makes the checkout process less cumbersome.

 

Are you shipping globally?

 

If you are shipping globally, you need to consider the landed cost. The landed cost includes the purchase price, duties, currency conversion, transportation fees and other related costs. Determining the right landed cost can be challenging because there are different variables that come into the picture.

 

These variables determine the final sale price and profit. You must ensure that your final sale price is competitive enough so that you will not lose customers to your competitors. You can collaborate with other players in the industry, like Australia post couriers, the Japan Post, FedEx, post shops, etc. so that you will be able to come up with the right price.

 

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