If you own a business, you are probably aware of a concept known as shipping costs. When you receive goods from a supplier, you will often have to pay these. These tend to be a sunk cost, because you have no way to recover from them. However, could there be a way to make shipping profitable?
Develop a shipping strategy
You will need to spend some time researching what you are looking for with your shipping strategy. Look at what other well-known companies are doing, and compare your strategy against theirs. Perhaps you could start implementing some of their ideas. For example, major shipping vendors such as UPS carefully explain their plan on their website. They explain what they are offering, and how much it will cost. They want people to be pleased with their service, and not end up feeling angry.
Charge the customer for their shipping costs
When a customer places a custom order with you, it is likely that you will not have all the materials on hand. You will have to make a special order and procure extra materials for this client. This will cost you additional shipping costs. To avoid these, you could ask the customer to pay for the cost of shipping in addition to their order. Make sure that you let the customer know this before you place the order, so that there is no misunderstanding.
Do not charge customers excessive amounts for shipping
If you are sending items to your customers, they will typically be expected to pay for shipping. You have to right to create a shipping policy, and charge the customer a little extra for the additional work that you have put in. However, do not plan on making a big profit off of this. If the customer is not pleased with your pricing, they will likely not return as customers. They will try to source out local companies who can do the work without the cost of shipping. Play fair when deciding your pricing strategies, but be careful not to rip yourself off in the end.
Offer free shipping
On special occasions, you may be able to offer perks such as free shipping to your customers. This may be because you are having a promotional sale, or because you value someone as a loyal customer. This will end up making the customers extremely happy. In the end, you will have more returning customers, because you offered them something they value. This will increase your overall profits, even if it costs you a little extra at the time.
The cost of shipping is a topic that people do not like to think about. If they have already paid for their item, they do not want to be charged again to get it to them. However, it is possible to make shipping profitable as a retailer. You simply must rethink your current strategy, and try to focus on what the customer is looking for. This will make them want to become returning customers.