How to Deal with those Dreaded Shipping Costs

by Carolyn Edlund

Do you hate the thought of paying for shipping? If so, join a group that includes everyone you know. Overcome these charges by thinking a bit differently and taking a new approach.

 

Dread those shipping costs? Here's how to work around them.

 

A few years back, when I was working as a sales rep for art publishers and giftware manufacturers, I assisted a young business owner in her booth at the New York Gift Show. She set up her display of handmade journals and leather goods, and placed a large sign announcing a special offer of “10% discount on all orders placed at the show.” As the day progressed, response to her special was lukewarm at best.

I asked her to tell me about the shipping costs involved with her products. She did some calculations, and determined that shipping came to about 8% of the average order placed. We changed our strategy and the show special to “all orders placed at the show would get free shipping.”

Buyers listened – and they wrote orders. Saving on the perceived cost of shipping was a greater incentive than a discount on the order itself. Those who placed orders didn’t ask the dollar amount of the savings, and we were actually offering less than a 10% discount. But that didn’t matter, because the idea of free shipping trumped all.

Shipping costs can set up a psychological barrier for many customers, and may even kill a sale. Have you experienced this in your own business? It happens especially with large or heavy items, but can affect any purchase.

Here are a few ideas to overcome that resistance, and even lower your own costs:

1. Reduce shipping (or offer it free) by increasing the price of your goods. Build value into your work and increase the price, given that you are now including shipping in your pricing formula. This strategy is used by retailers of all types to reduce or eliminate the “shipping cost” line item from their invoices, and it can work very well.

2. Encourage a price level purchase to get free shipping, and bump up your sale. You’ll see this strategy on Amazon and many other sites which set an order total threshold for free shipping. I’ve added a purchase to my Amazon orders to total over $25 for free shipping before. Have you?

3. Offer local customers free delivery of large pieces, and free installation. This can solve a couple of problems for the purchaser, and help to close the sale. Unwieldy pieces can be hard to transport, and this policy removes that concern. If your art needs to be installed carefully, you can make sure it’s done right (and give great customer service.) Plus, as you visit their home or office, you get to know the customer better. You may have the opportunity to discuss other pieces that might work for their space – and you can bet that you’ll be remembered.

4. Offer free shipping on subsequent orders. This is a great strategy to drive repeat sales. If you ship out an order to a customer, include a coupon for free freight on their next purchase. And, you can encourage referral sales by also including another coupon for a friend to get free shipping on a purchase, too.

5. Negotiate for a better deal. If you ship your work frequently, consider approaching carriers for a volume discount. Do your homework and have competitors’ rates in front of you when you call.

6. Realize your own discounts. Some carriers provide free shipping boxes, which help reduce your costs. And, if you ship similar packages all the time, you might qualify for prepaid shipping with Fedex and UPS, which provides a discount. Some professional associations offer shipping discounts to their members, or you could work with a third party business such as Siriani to reduce overall freight costs.

 

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Comments

  1. I like the idea of increasing the price and offering free shipping or a low flat rate for shipping. That’s something I may work on. Even though most of my items are smaller and ship for $6 – $10, many customers do buy several items at a time and I’d be happy to give them a deal on postage for their business. I do take advantage of free priority boxes, though you’re limited in the size, and I do print most shipping labels online which is somewhat cheaper than paying for shipping at the counter. Thanks for all the tips!

    • Lana, Lower-end items are actually perfect for a free shipping threshold. You get a break on shipping just one package, and they will enjoy the benefits, too!

  2. Great article! I offer free shipping within Canada and the USA. (I’m a little nervous to branch it out to the rest of the world since it can vary so much!) I have found that customers really like it and it feels great for me. .kind of like an extra thank you to them ☺

    • Yes, it’s like a gift to your customers. I’ll bet everyone can remember a time when they realized they would get free shipping, and it sealed the deal. Thanks, Nikol!

  3. So glad I read this!!!! Buy more, get free shipping… why, I have done this many many times myself with Amazon…like you mentioned, but it never occurred to me to use it for my products. Thanks Carolyn!!

    • Hi Lisa, Good to see you here! Many techniques that big companies use can work for entrepreneurs, too, and actually the public is used to seeing these deals. Try this tactic and let me know if it works!

  4. I offer a coupon code for free shipping for retail customers who sign up for my newsletter. I never thought about offering it to wholesale customers above a certain threshold, though!

    • Thanks for your comment, Tawny. Freight is, of course a major concern to retailers and free shipping works well with this group! It may even serve to reduce their markup and keep your prices a bit lower in their store, as they have to add shipping costs into any pricing formula.

  5. Thanks for this article – I really struggle with pricing and shipping costs are quite high as I post tracked and signed for. One set price, without the customer having to add in postage, sounds like a good idea.

    • If you can build the value to a specific price that includes your shipping costs, I think you will find it lifts a huge barrier to the sale. Good luck with this!

  6. I have yet to ship any paintings, but you’re so right about the effect free shipping has on sales. I have purposely waited to purchase items until a shipping offer came along. I’ll have to get a strategy worked out – thank you!

    • Actually, Lisa, that is another great point. People know that free shipping offers happen, and they wait to buy. But if your shipping policy always offers an incentive, there is no reason to wait!

  7. Carolyn, this is a great article. I owned a custom hand painted sign business over 5 years ago. I have learned what worked best for me was to include the shipping cost in the price and offer free shipping. The cost of the wood paintings would get expensive to ship depending on where its destination was. I took the lowest shipping cost in the US and the most I would pay in the US, added them together then divided that by 2. That gave me the price I added to the cost of the sale. This worked well for me and now I am applying that concept to my graphite art business. I also have always had good luck with USPS Priority Mail.

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