Managing Shipping Costs for Profitability

Managing Shipping Costs for Profitability

Envisioning a Scenario:

You (Store A) procure a $40 product from Supplier Brand (Store B) with a 25% discount rate. Store B has a fixed shipping rate of $5, and your store has an $8 shipping fee.

Scenario A: Your customer pays $40 + $8 (your shipping fee) = $48.You purchase the product from Store B for $30 + $5 (Store B's shipping fee) = $35.You profit $438 - $35 = $13.

Scenario B: You sell 1 product from Store B and 1 of your own products (priced at $20). If you offer free shipping above $45 and don’t have a separate shipping profile for Buddify products, your customer pays $40 + $20 = $60. Your total cost: ($30 + $5 to Store B) + $8 (your shipping for your product) = $43. Your profit: $60 - $43 = $17.
Note: Multiple purchases or low product prices might slim down your profits in some situations.

Tips and Strategies:

Marketing Costs: Selling multiple items in one order not only increases your Average Order Value but also saves on customer acquisition costs that would otherwise be incurred per item.

Shipping Cost Evaluation: Inspect each product and its corresponding shipping cost distinctly. While uncommon, some imported products might carry high shipping fees, especially when ordering more than one item. Usually, adding more items to the cart does not significantly increase shipping fees.

Utilize Shipping & Customs Calculations: Employ the "Calculate Shipping & Customs" feature on each product card and review all your Suppliers’ Shipping Policies to astutely decide your pricing and avert unforeseen costs.

Create Individual Shipping Profiles for Each Brand's Products Imported Through Buddify: If you select 10 products from 5 different brands, consider establishing 5 separate shipping profiles, one for each brand. By doing so, you can maintain steady oversight of your shipping costs and profitability, ensuring that you remain profitable when selling one or more partner products in conjunction with your own items.

Shipping Settings: Remember that when selling a Partner Product, your shipping settings apply, enabling you to charge shipping twice in cases where you sell a Partner Product and your own product.

Product Bundling: Explore creating bundles with your products and partner products, establishing a new shipping profile to optimize low shipping fee products with high profit margin supplier products, enhancing overall profits.