The business era is now superior to e-commerce so that the buying and selling system is done online without face to face. That causes shipping of goods to be something important in the buying and selling chain in e-commerce . To make your business grow, it is necessary to have a strategy in determining the cost of shipping. Why is that? The buyer considers the amount of shipping costs in determining whether to buy an item or not. That way, you can not arbitrarily determine shipping costs.
Too high shipping costs will make your buyer compare with competitors’ products that can provide lower prices for shipping costs. While providing shipping costs that are too cheap can result in cutting profits too much, causing losses. This proves that the strategy to determine shipping costs is very necessary because it has a big influence on your business profit margins. The following will be reviewed tips and strategies for determining shipping costs so that it is profitable for the buyer and also for you as the seller.
Determinants of shipping costs
In determining the cost of shipping in your business, of course there are several factors that determine. Three things that determine the shipping costs are the weight of the item, additional costs, and shipping methods. By considering these factors, it is expected that the determination of shipping costs will be more solid and stable.
· Determine the weight of goods
The weight of the item is the first determining factor that needs to be considered in determining shipping costs. The weight of this item can be measured in two ways namely actual weight and dimensional weight. Actual weight is the weight of the package rounded up to the next kilogram. For example your item when weighed weighs 2.8 kg it will count 3 kg. Dimension weight is a measure of shipping density. How to calculate it is multiplying the length, width and height of the package size and then rounding it to the nearest cm. You can determine the shipping cost by considering the actual weight and dimensional weight of the package to be shipped. Make sure these weight measurements are actual and accurate so that buyers don’t feel cheated.
· Calculate additional costs
Additional costs required during the packaging process are also a factor influencing the determination of shipping costs. What are the additional costs? Typically, the type of material used for packaging goods has an added effect. For example, if you sell paintings and the shipment must use wood, of course, this will require an additional fee. Provide an explanation of these additional costs so that buyers are not confused and can understand shipping costs that have increased than usual. In addition, by calculating these additional costs, you have minimized losses because shipping costs are too small.
· Shipping method options
Another factor that determines shipping costs is the method used. There are four methods to choose from namely by land, sea, air and atarmode. Shipping by land is usually the cheapest form. Shipping via sea costs more than land and is usually used for international shipping as well as inland. Shipping by air is the most expensive because the travel time is also the fastest compared to the others. Shipping via air using cargo aircraft and passenger aircraft luggage compartment. The last is intermodal delivery. This shipment combines several shipping methods and refers to special containers that can be efficiently transferred between ships, trains and trucks.
Strategies for determining shipping costs
After knowing what factors influence the determination of shipping costs, now is the time for you to do the calculation correctly. There are several strategies that can be applied in determining shipping costs. Three things you should do are compare with your business competitors, map customer locations, and consider free shipping to buyers. If implemented properly and correctly, this strategy will certainly benefit your business.
· Do a comparison with business competitors
You need to do a survey of your business competitors so you can determine shipping costs that are not much different. If your shipping costs are too high then the buyer will choose a competing product. Therefore, before determining shipping costs, make sure you have compared with other shipping costs. This is very important to do because even though your goods are cheaper, if shipping costs differ greatly from competitors, the buyer will think twice about being loyal.
· Map the customer’s location
Another strategy that can be done is to map the location of your customers. Make a percentage, how many domestic customers and how many international. This will make you choose more carefully which shipping service to use on a regular basis. Certain customers are also willing to pay higher shipping fees as long as the goods arrive faster, but sometimes delivery locations are not possible such as remote locations. For that, you must carefully map the location of the customer so that there is no wrong choice of shipping service.
· Consider giving free shipping
If your business is in a very tight sector of competition, you might consider providing free shipping. This is very effective if the product you sell has high profit margins such as gold jewelry or gadgets. That way you can cut profits to cover shipping costs. However, if your profit margins are low such as only selling retail shirts, then the strategy is to make free shipping once in a while. You can do it once a month or when there are certain events .
