Should I Profit On Shipping?

Today’s online shopper is very savvy and will catch on to most things pretty quickly. Gone are the days where you can make a low margin on your products, then add on high shipping and handling fees to make it up. Your customer will notice and will move on to another store. In my opinion, shipping and handling should not be a profit center for your business. Most customers understand that S&H is a cost that they cover in order to receive their product. So you need to make it as fair as possible for them.

This starts with having a good understanding of what you will pay for shipping. Your drop ship vendor should give you full information as to how they calculate shipping to you so you can act accordingly. Your estimates will sometimes be good, and sometimes not. Some customers will overpay for shipping; some underpay. Your goal should be to get it as close as possible.

 With that being said, I do consider it alright to make a little profit on shipping. After all, you are in business to make money, and S&H is a service you are providing. As I mentioned before, just be sure to keep it fair. Maybe try to make 10-20% on shipping, not 50-60%. And remember, any shipping charges you take in over and above what you pay in shipping needs to be reported as income, and you will be taxed. So it’s not free money.

How do you feel about shipping and handling charges?

Tags: drop ship, business, retail, ecommerce

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