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  • #982313
    Anonymous
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    how does everyone decide what postage rates to use? ie. flat rate vs incremental based on sales or even based on quantity and weight?

    I’ll be selling kids toys and clothes so the ‘average’ parcel will vary a lot.

    Ideally I’d like to stick with one approach, but is it best to perhaps start off with staged or based on sales and then potentially work out an average after a few months (I am just launching now) and go with flat rate?

    as a consumer I prefer to have flat rate as I hate adding and deleting stuff from my cart and postage changing, but I guess everyone is different.

    #1136152
    ozcart
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    Determining how you charge for your shipping prices will depend on a number of things:
    – how you will be sending out the items (what postage company you will use e.g. Australia Post, Fastway, TransDirect etc)
    – the size of your products and how they will be packaged
    – the options available to you in your shopping cart package
    – what your competitors do

    You’ll want to get a good balance between making things as simple as possible for your customers and ensuring you’re not out of pocket when it comes to sending the items out. Shipping costs are proven to be a major cause of shopping cart abandonment so you don’t want to make things too complex and discourage potential buyers.

    If you’re going to use Australia Post, you’ll want to make sure you have a shopping cart that lets you set your product dimensions up so that the cart can more accurately estimate the size of each package and send appropriate quotes to Australia Post for calculation. You said that you’re selling kids toys and clothes that can be big and small, so this will be an important consideration for you when choosing your cart provider. Not all carts on the market allow you to set dimensions for your products which is not an issue if all of your products are of similar size, but a major issue if you have products of various sizes. You don’t want your cart allowing bulky items that are light to be quoted on a satchel when they have to go in a box for example.

    There are no hard and fast rules about how you should set up your shipping but make sure that the cart you choose gives you the flexibility to set up your shipping the way you want it to.

    I personally prefer flat rate shipping or building shipping in to your product prices and offering free shipping (as this reduces the “stress” of working out shipping) but you have to look at what your competitors are doing and what your customers are likely to prefer. Flat rates are often chosen for clothing sellers as they are having to compete with flat rate shipping offers from overseas sellers.

    Good luck with your venture!

    Brooke

    #1136153
    John Debrincat
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    KAK, post: 155052 wrote:
    how does everyone decide what postage rates to use? ie. flat rate vs incremental based on sales or even based on quantity and weight?

    I’ll be selling kids toys and clothes so the ‘average’ parcel will vary a lot.

    Ideally I’d like to stick with one approach, but is it best to perhaps start off with staged or based on sales and then potentially work out an average after a few months (I am just launching now) and go with flat rate?

    as a consumer I prefer to have flat rate as I hate adding and deleting stuff from my cart and postage changing, but I guess everyone is different.


    @Ozcart
    has given you great advice. Shipping can be a marketing tool but if used badly can stop sales, dead in the water. You might consider looking at a shipping aggregator like Temando who will offer more flexibility in shipping providers.

    You can also increase the value of your basket by offering exception based shipping that mean “free over a certain basket value” it can be a great way to get added value.

    If you have lots of return customers think about offering your loyal customers a different shipping cost or even free shipping, this is great for retaining customers.

    If you use Australia Post explain the process to the customers and don’t add a margin to the Australia Post pricing. Most people who buy online understand how Australia Post charge. By introducing a shipping estimator tool you can also make the process more visible. If you can’t have such a tool then just provide a page that has the standard costs to different regions as content and have a link to that page in each product description.

    Just remember to explain the process, make it as transparent as possible and consider customer loyalty.

    #1136154
    Kaylo
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    • Total posts: 27
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    We had so many issues trying to setup our courier system at the start.

    We have adjusted it now, and it came down to weight per item.

    The large items had true weights calculated and small items that could be express posted were all set at the same weight (we have 3kg & 5kg Aust. Post express bags).

    Any small items that go through express post we pay 5c for the customer and we lose a part of our margins on our larger couriered items also.

    Competitive and exciting world out there! :)

    #1136155
    Richard Brock
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    KAK, post: 155052 wrote:
    how does everyone decide what postage rates to use? ie. flat rate vs incremental based on sales or even based on quantity and weight?

    I’ll be selling kids toys and clothes so the ‘average’ parcel will vary a lot.

    Ideally I’d like to stick with one approach, but is it best to perhaps start off with staged or based on sales and then potentially work out an average after a few months (I am just launching now) and go with flat rate?

    as a consumer I prefer to have flat rate as I hate adding and deleting stuff from my cart and postage changing, but I guess everyone is different.

    Hello

    I thin you need to build in flexibility into your pricing model and most shopping cart solutions allow you to do this.

    You need to take into account the size and weight of the item, but more importantly in Australia where you are sending the item. It is cheap to send items across town or to other capital cities, as soon as you start sending to regional areas costs go up.

    eBay has always pushed to offer free shipping, mostly because most people hate paying shipping costs. Even if they are getting the item cheaper through your site.

    Shipping can also be used as a value add service, there are people willing to pay a premium for faster delivery time. I think you never want to see shipping as a “profit centre” for your business.

    What are your competitors doing. Can you use shipping as a point of difference, like the Iconic does with their 3 hour delivery times. It is an area you don’t won’t to be more expensive than your main competitors.

    Good luck.

    Richard Brock

    #1136156
    Kaylo
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    • Total posts: 27
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    Sometimes having free shipping can be accomplished but costs to wear are far to great, unless your selling jewellery and very small items that can be in Australia Post Express bags then yes, but anything larger for a courier, can’t be done.

    Ebay advise free delivery so their are more buyers and more fees that goto ebay. Essentially your paying the ebay percentage and cost of postage.

    You can lift the price of your products to compensate, but then you will get another that will be cheaper than you and hurt your margins again.

    This is because people want cheap when they go online, I think business owners don’t realise how competitive it is owning a online store.

    You can just look at a competitor’s website, see what there charging and then adjust your own prices. Bricks and Mortar, you have to physically (unless online also) goto the store and check their pricing, plus you will be frowned upon if your recognised by the business owner, so people won’t do it anyway.

    #1136157
    macintosh_addict
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    KAK, post: 155052 wrote:
    how does everyone decide what postage rates to use? ie. flat rate vs incremental based on sales or even based on quantity and weight?

    I’ll be selling kids toys and clothes so the ‘average’ parcel will vary a lot.

    Ideally I’d like to stick with one approach, but is it best to perhaps start off with staged or based on sales and then potentially work out an average after a few months (I am just launching now) and go with flat rate?

    as a consumer I prefer to have flat rate as I hate adding and deleting stuff from my cart and postage changing, but I guess everyone is different.

    Hi there,

    If cost is your main concern at this stage I would suggest you to take different approaches rather than sticking one. And some times you also need to think outside the box. I know it sounds hard, however once you get your head around the system it’s really not.

    I use Australia Post as my primary courier. Simply because they are the cheapest and have the largest network.

    I would suggest you to look into Click and Send Flat Rate Boxes, eBay Flat Rate Satchels, Regular and Express Post Satchels, and also speak to them and see if you can get a PARCEL CONTRACT.

    Then what you need to do each time is to choose the most suitable service for the size, content, and weight of your parcel.

    Charging customers flat rate is fine as long as you know that what you actually pay for varies. So setting a price that allows you keep a healthy balance when the actual rate goes higher or lower is very important

    I hope that makes sense.

    Cheers!
    Johnny

    #1136158
    mjbi
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    • Total posts: 9
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    Kaylo, post: 155718 wrote:
    Sometimes having free shipping can be accomplished but costs to wear are far to great, unless your selling jewellery and very small items that can be in Australia Post Express bags then yes, but anything larger for a courier, can’t be done.

    That depends on your industry. We have found it’s easier to offer free shipping on larger items than smaller items, often because in our industry the smaller items are worth less than the cost to send them. Bigger items though we have negotiated good rates with Fastway, TNT and Australia Post which allows us to send bulky goods Australia wide and offer free shipping on them. Yes to some area’s it can be hugely expensive, but never to the point that it costs more than what we make. You just have to be willing to accept that some sales you may only make a minimal margin on while the majority will make a larger margin to make up for it. You also have to be willing to push the limit on size/weights. For example, we regularly put things that are 2.2cm high through Australia Post as large letters for $1.20 even though they should technically go through as a small parcel for $6.60 because they are 0.2cm too high. Same with larger parcels. Using Fastway we have 5kg satchels that offer national delivery for $11. We regularly send things in them up to 5.5kg with no problems as long as they still fit within the satchel size.

    Different couriers handle things differently though. For example TNT who use air freight a lot are much more meticulous on weight and dimensions. Fastway is road and rail though so weight is not as big of a deal as long as size is correct. Australia Post is more meticulous over the counter, so if you can stick something in a post box that would be just a little bit over (eg 550g in a 500g satchel) it will often still be accepted. We’ve never had anything back because of things like this, just don’t push it too much, the last thing you need is having to pay for postage twice because you pushed the limits too far. Bigger products you don’t have much choice, if they are outside of Fastway’s zone’s and too big for Australia Post you just have to go with a larger courier that has a national network like TNT or (if worst comes to worst, Star Track). This is when it start’s to get more expensive, but careful packing can make things smaller and still make it profitable.

    Basically, be creative and negotiate the best rates you can. It is definitely possible to offer free freight on bulky products with the right

    As a marketing tool you just have to decide whether or not your product margins and sales volumes allow you to accept a smaller percentage of sales that make minimal amounts. There are plenty of other marketing tactics out there that essentially do the same thing in different ways (eg combo discounts, cashbacks, % off vouchers, etc etc).

    #1136159
    Lahay
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    • Total posts: 34
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    Hi,

    We find offering free shipping over $75 works for us.

    Packing is really important. We were packing in boxes & then switched to satchels where possible & it is amazing how much this can save in postage.

    We use Australia Post for smaller parcels, although they have now increased their weight restrictions (up to 22kg?), more can go through Australia Post.

    And for larger parcels, we use Interparcel.com.au ( thanks to a recommendation through a post on Flying Solo!). This will find out the cheapest freight company for you.

    I prefer to use couriers when I can, as they pick up direct from your door, saving me time :)

    Jocelyn Serone
    http://www.lahay.com.au

    #1136160
    Toner Bee
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    • Total posts: 17
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    Our site calculate the shipping by value.
    We offer free shipping on order amount over $49.
    It increase people buy more, another word is profit will increase too.

    _____________________________________
    Toner Bee Team –
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    Easy, quality ink and toner cartridge with unbeatable prices, shop with us 24 hours a day, friendly customer care available 7 days a week.

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