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Sunday, January 6, 2008

Freight Costs

I was reading some posts about eBay's new DSR Feedback system and many of the posts were frustrated on the feedback on shipping costs and that customers don't understand shipping costs.

Shipping Costs:

1. Cost of actual shipping from UPS, FedEx, US Post Office, etc.
2. Cost of box (around 50 cents each), except if you use priority mail then it's free.
3. Cost of material (bubble wrap tracks the price of oil, so it's increased).
4. Costs vary depending on zones (how far it is from you) and weight.

Childbook offers free shipping as an incentive to customers and because it's expected (right or wrong) because the major book & music seller do. This cost is in addition to the cost of materials. If a customer opts for Priority Mail (2-3 days) of ships internationally, I charge the same amount for shipping a DVD that weighs 6 ounces, as the latest Harry Potter book. Even if the cost for shipping is considerably different. ChildBook also charges the shipping charge for a customer in California that is local, as one in New York.

What I have done to make this fairer is increase the price for items that are bundled on shipping (unless a customer chooses free shipping) with the goal of just covering the cost on shipping. The goal is to make shipping break even, and not be a profit or loss area. In practice, sometimes I make money on shipping on an order and other times lose money. It evens out.

EliteDresses.com Is a separate site (run by my wife) that sells Girl's Dresses including Girl's Chinese (Qipao) Dresses. She does charge a shipping charge because she ships out Priority Mail which costs. Plus she checks each dress before it ships to make sure all the flowers look great, zippers work, irons if needed, wraps it in tissue paper, then seals it in a plastic bag. This adds up to extra labor that a small charge is added in the shipping and handling cost.

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