As competition grows and advertisement costs increase, dropshippers need to figure out effective ways to control their expenses. Besides getting a reliable supplier for a reasonable price of products, shipping is also an important part.
Many things are out of dropshippers’ hands – dropshippers don’t need to put their hands on products, since the supplier ships products directly to customers.
However, there are a few ways for dropshippers to control their shipping costs.
1. Increase Product Price To Cover Shipping Cost
There are many different ways to tackle the idea of increasing your product price to save your shipping cost over time. You can charge what you pay, use a straightforward flat-rate price, or use a tiered shipping strategy.
Charge What You Pay
The most straightforward answer towards saving shipping cost would be to pass the cost to your customers.
This can be a challenge if you are selling different products with different shipping costs because a customer can be deterred by paying a different shipping price for each item. So with this strategy, constantly monitor your traffic to see how your audience is reacting.
Flat Rate
Giving a flat rate to your customers is a very straightforward strategy to lower your shipping costs as a dropshipper. This works best for Shopify sellers since it can be easily implemented and gives you a calculated way of managing your costs.
Now to decide on your flat rate, it would be best to take the average of all the shipping costs of the products you are selling. For HyperSKU users, they can easily view all shipping costs in account.
Take all the products you sell into account, rank them by price range or weight, and then add in all the shipping costs. Once you’ve done that, take the average shipping cost and make that your flat rate all across the board.
Shopify users can do the same, but you would have to use weight-based or price-based rates in your shipping section.
Now sometimes flat rate shipping will cause you to pay less or even more, but with the right calculations you will likely break even in the end.
To deal with these fluctuations, you can adjust prices for popular or less popular products to make sure that you continue to break even or make a profit.
Tiered Shipping
Tiered shipping prices are a great combination of those strategies. This approach will only work though if you have sufficient data and analytics to understand what works.
Tiered shipping allows you to save shipping cost for dropshipping while also possibly increasing sales. This can mean giving promotions to your best customers whether it’s through pop-ups or newsletters. A simple example is a promotion of free shipping for order over $175.
2. Reduce Weight Of Packages
A sure-fire way to save money on shipping costs is the size and weight of your product. The goal is to get your product as small and weightless as possible.
The bigger and heavier your product, the more it costs to ship it out to your customers. Having large products can sometimes cause them to take longer to get to customers, making them less likely to make a recurring purchase on other products.
Now, controlling the weight of a product can be difficult, but one thing you can control is the packaging you use. Many dropshipping newbies assume that they should go for customized carton box at beginning of the journey, but it requires MOQ (usually 500) and ends up with
Boxing up products can cost money too! Luckily dropshipping suppliers provides simple free packaging. For dropshipping beginners, it is practical to use white label packaging provided by suppliers, until you are well funded for customization.
Take every avenue to save money. Now that you have a way to get free boxing, you can focus on reducing its weight and size to save money on shipping costs for dropshipping.
3. Choose The Shipping Carrier That Fits
Choosing the carrier can be the difference between breaking even and making a profit.
If you are dropshipping with Chinese suppliers, then there are several top-rated shipping companies to work with. Usually dropshipping suppliers work with several shipping companies to provide different combinations of pricing and shipping efficiency. To name a few:
- YunExpress
- CNE
- Yanwen
So as a dropshipper, you can compare all the different rates between those companies and choose the best option for you.
4. Anticipate Shipping Fee Changes
Shipping fees routinely change throughout the year. During holidays they can even increase from 10-30%. Every year all carriers adjust their shipping fees before and during holiday seasons for labor and fuel costs.
Make sure to look out for messages from your dropshipping suppliers or shipping companies you work with, to keep track of shipping rates change.
5. Manage Customers’ Expectations
Customers are the number one priority for your dropshipping business. To keep them wanting to come back you have to be transparent about your shipping times.
Always give the tracking number to your customers so they can have the comfort of being able to see when it’s coming.
To add on to that, be transparent about the shipping time even if it is a longer wait than most might be comfortable with. It’s better than them believing their product didn’t arrive in time.
6. Correct Shipping Fees Per Different Countries
Shipping to different countries can change the shipping costs vastly. Another thing to consider is many international shipping carriers do not ship to outlying islands.
So to combat that, set up different shipping zones for all the countries you want to ship to. Take the time out to research the varying shipping costs for these different countries. Once you’ve done that, adjust the shipping cost for customers depending on their location.
For customers that live in countries where it’s less costly to ship to, you can give them free shipping, allowing them to have more incentive to complete their purchases.
With that said, you have to be transparent with your customers about these shipping costs. Do not advertise “free shipping” and then let the customer get to checkout and find out they have to pay to ship. Let them know upfront that shipping is only free in certain countries.
Saving On Shipping – In Conclusion
Shipping costs are something every dropshipper has to deal with. It can cut into your bottom line and become a pesky expense. But with a little research, time, and legwork, you can find a way to save money on shipping costs and put more of that saved money back into growing your business.