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Who Pays for Shipping in Dropshipping in ?
Last modified: July 4, 2022
When a customer makes an order, who pays for shipping in dropshipping? This might seem like a simple question but it is more complicated.
Technically speaking, as the seller, you are responsible for paying for the shipping of any dropshipping orders. This will eat into your profits and can sometimes make an order completely unprofitable. That is why it is important to always consider the costs.
However, there are some options that you might want to consider.
1. Free Shipping
The first thing to do is to offer free shipping to your customers. This is when the costs of the shipping come directly out of your pocket regardless of the order. However, free shipping for the customer is never truly free. The customer still pays, the costs are added into the cost of the product. So if you were going to charge $8.99 for a product, you would be wise to add a $1 onto the final price.
Customers know this happens, by psychologically, they see free shipping as something
that is valuable. That is why when customers are faced with shipping costs, they’re more likely to abandon an order on your website.
You could make sure that all orders over a certain amount are free though. Then you can use free shipping bars as a way to add FOMO to your website and improve conversions.
2. Charge Customers Directly
Another option is to charge customers for the shipping directly. This is very transparent and you can have a shipping calculator added to your Shopify store that allows you to offer this to the customer. This can be a way that protects your profits, but at the same time, it does give more risk that the customer will abandon their cart.
However, you can combine this with a free shipping offer where you offer this if the customer spends over a certain amount if they’ve abandoned the store in the past. It is a risky option, as the customer might go somewhere else. But it might bring back about 20% of your customers who have abandoned a cart. On the average eCommerce site that can be enough to almost double revenues.
3. Flat Rate
Another option is to use a flat rate for your website. This is where all customers will pay a certain amount regardless of the order. For example, they will pay $3.75 for all shipped orders. There are benefits to this, this has a lesser impact on the conversion rate, especially if you advertise the rate upfront. It can also make calculating the final basket amounts really easy for the customer.
However, there is a negative and that is that you might need to pay more for some shipping when the cost is higher than what you’re charging. Therefore, you have to ensure that you’re covering the rest of the shipping from the profits of the products that you’re selling. Otherwise, you’re going to be making a loss on any order that is placed.
Final Word: Who Pays for Shipping in Dropshipping
So why pay for shipping in dropshipping? Technically as the seller, you pay for all shipping, but in the end, it is actually the customer, it is just how you get that money from the customer for shipping that is important. Above are three options that you can do for paying for shipping. Which one will you choose?