On LoobaLee, we have a policy of charging actual shipping, or less, and not surprising buyers with outrageous shipping charges during checkout. The cost of actual shipping is outrageous enough, these days!. You can see our ethical approach to shipping in our Community Code here.
And, we make it straightforward to do. Learn how here — this is the “Science” part
While it seems straightforward, but pricing shipping charges is actually something you’ll want to put a little thought into — the “Art” part.
A high cost of shipping, even if it’s the true cost, can turn away a buyer faster than anything else.
The retail industry has taught us all, as buyers, to have a lot of psychology around shipping charges! Shipping charges are the number one reason buyers abandon their cart during online checkout.
“Artfully” Pricing Shipping to Motivate Purchasers
The last thing you want to happen is to offer a shipping charge on your listing that is inconsistent with what you’re selling and the price you’re asking.
When to use Actual Shipping
Actual shipping works best in these two scenarios:
1) Your item or outfit is priced ~$15 or higher. For lower cost items, the actual cost of shipping will result into too high a percentage of the buyer’s total charges, and may psychologically turn the buyer away (unless they really, really want the item).
For example, if you have a $10 item and enter a Weight Class of 2, which is only a 6-13 oz package weight, the actual shipping rate and what the buyer will pay is about $5 (~ 1/2 the cost of the item).
2) Your item (packaged for shipping) weighs under 6 oz. In this case, the first class postal rate is still quite low, e.g. ~$3.50 or less.
When to Use Free Shipping
I love free shipping! (doesn’t everybody?) Whenever you can offer free shipping, my recommendation is do it. Free Shipping is the number one motivator for buyer’s to checkout and not abandon their purchases.
The question isn’t necessarily “when”, but “how”?
A sure thing: If your item will fit in a USPS flat rate box, you can safely offer free shipping (how to). Just build the cost of shipping into your item. Your cost to ship won’t vary whether your package has to cross just 2 shipping zones or 6.
Be realistic with your item pricing. If including the full cost of shipping drives your item price up too high, you may be trying to get too much for your item in the first place. Learn more about pricing here.
Single items and small outfits usually fit in a $4.85* flat rate box. Larger outfits and lots often fit in a $10.95 flat rate box.
If you aren’t sure, weigh your packaged items. Anything over 13 ounces will cost you less to ship if you can fit it in a flat rate box.
Lots and multi-piece outfits are one of the best opportunities to use free shipping, because it’s easier to include shipping in the total price. If you can’t fit your lot in a flat rate box, you should definitely get an actual or estimated weight and figure out potential shipping charges on the USPS site before you price the lot.
*USPS Priority Flat Rates at time of this writing; highly subject to be increased by USPS in the future.
When to use a Lower Shipping Rate
Using a lower Weight Class can help sell your item. For example, if you have a packaged item that is 10 oz (which falls in the Weight Class ’2′ range), you may want to use a Weight Class of ’1′ on your item instead.
You will then need to cover about $2 to make up for the actual shipping charges when you mail the item. So, what to do? Price your item accordingly, assuming. A slightly higher priced item with a lower shipping is a better combination for motivating a buyer. (After all, this is the norm we experience with online shopping at retail stores who offer free shipping.
With today’s shipping rates, a Weight Class of ’2′ approximately covers USPS Priority Shipping on a $4.85 flat rate box. If your item weighs more than 13 oz (such as a pair of jeans), but will fit in a flat rate box, using a Weight Class of ’2′ is a good idea — fair for both you and the buyer.
Flat rate priority shipping has become so mainstream, that buyers are smart enough to know they are paying unnecessary shipping charges when the item they purchased fits in USPS boxes.
When to use a Higher Shipping Rate
This technique be very, very rarely used. If ever used, you should always provide an explanation in your description of the item.
A valid reason for charging more for shipping than actual is if you want to insure the package. Insurance is not included in LoobaLee’s standard shipping calculation.
But, then again, you’re toying with a potential buyer’s psychology, and if the item you are sending is valuable enough to purchase insurance, you will likely have more success with including the cost of insurance directly in the price of your item.
Some scenarios where insurance may apply? Expensive gown (e.g. 1st Communion gown) or suit, couture designer items (e.g. Burberry), etc.
A Note on Delivery Confirmation
A Delivery Confirmation charge of 85 cents is included on every LoobaLee order that has a shipping charge. You do not need to factor this in. We do it for you!
The only time a Delivery Confirmation is not added to an order is if every item purchased on the order has FREE SHIPPING.
Delivery Confirmation charges are added at the order level – not for every item. If buyers purchase more than one item from the same seller in a single checkout, we will only apply one Delivery Confirmation charge.
Do you have tactics, opinions, and/or experiences with shipping charges? Please leave your questions or comments below, and let’s discuss. We’re always open to improving these suggestions!