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How should one set shipping charges?

This topic contains 2 replies, has 3 voices, and was last updated by  David Crabill 3 months ago.

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  • #84105

    Cottage Oven
    Moderator

    Although most states’ cottage-food laws do not allow shipping, some do. In particular, the new changes in Florida do allow shipping.

    That means I am now permitted to ship my products to customers without being restricted only to farmers markets, etc.

    How does one determine how to set up the shipping charges on a website? Do any of you have experience with this? Free shipping may be great for Amazon and similar giants, but would negate any profit a small, cottage-food operation would make, so that’s not an option. What are the pros and cons of flat-rate (perhaps tier-based) shipping versus actual shipping cost? Are there any other considerations?

    Thanks.

    #84158

    Jennifer
    Participant

    Following!

    #84477

    David Crabill
    Keymaster

    I don’t know a ton about it, but from what I have gathered from talking to people:

    • It’s not typically practical to offer free shipping
    • It might be more lucrative to split it into two fees. For instance, a shipping fee and a separate handling fees. Experiments have showed that customers are willing to pay more when the fees are split.
    • For many items, customers are not willing to pay the full cost that it takes to ship the items. Consider increasing the price of your products on your website relative to what you’d charge at a farmers market. In other words, partially build the shipping cost into the product prices.
    • Some products simply aren’t practical to ship. Particularly heat-sensitive and/or fragile and/or larger products.
    • People often think that shipping will revolutionize their business. Often it ends up being a small percentage of sales, and many of the people I’ve talked to, talk about eliminating the shipping option altogether. Some already have. The more tradition methods of distributing food — through local markets and stores — tend to be the most effective and lucrative.

    All that being said, I am personally interested in tested out shipping for my fudge business, and even initiated CA’s cottage food bill this year to try to enable it in my state. Hopefully that will pass and then I will get to experiment. I have some ideas I’d like to try out and if they work, you can be sure I’ll be sharing them through Forrager!

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