Managing Online Store Shipping Charges
Decide whether the shipping charge is a flat fee per order or item or varies by price or weight. If you decide on weight, you must enter the weight of every product in your product database. After you have an estimate of shipping volume, you might be able to schedule pickups and negotiate a discount rate with a carrier.
Handling isn’t free either. You incur costs for packaging materials and wrapping, picking products out of inventory, packing cartons, and labeling.
If you’re new to this business, test your packaging, shipping, and carrier selection, especially for fragile or perishable goods. Simply ship samples to yourself or friends.
Your store software should separately report revenues from product sales, taxes, and shipping charges. If you’re careful with financial records, you can track shipping and handling costs against shipping revenues to ensure that you aren’t losing money on shipping. If you incorporate a portion of shipping and handling costs in the product price, adjust this calculation accordingly.
In many cases, it’s better to bury some of the cost of shipping and handling in the online product price and reduce the published shipping price. This strategy reduces customer resistance to shipping charges perceived as high relative to product price. People balk at paying $10 to ship a $30 item but are more willing to pay $5 shipping for the same item priced at $35.