As discussed in previous posts, one of the main differences between dropshipping and wholesaling is that dropshippers will ship products for you, while wholesaling usually requires you to carry and inventory and ship products yourself.  Whichever method you’re using, you may have noticed that shipping costs take a hefty bite out of your profit margin.  So how can you conquer shipping costs?
#1: Use A Cheaper Method. When dropshipping, you don’t always have options as to how the product will be shipped.  If you do have that option, or if you are controlling the shipping process yourself, than you can send your product the cheapest way possible.  The caveat with this tack is that the products will likely not arrive as quickly, and you probably won’t be able to track them.  You have to consider the profit you’ll lose when you have to replace lost product.  You are also more susceptible to customer theft when customers do not have to sign for receipt of their product.  Using UPS or FedEx may actually save you money in the long run in security of product and customer satisfaction.

photo credit: cliff1066
#2: Sell In Bundles. Bundling products together can be a great way to sell multiple items and also attract and impress customers.  People love to buy gift baskets and value packs, and if they feel that the price of the pack is acceptable, they are not likely to actually calculate what each item is being sold for.  You can make a gift basket for almost any kind of product.  Camping accessories (freeze-dried dinners, a Coleman lantern, a pocket knife, army blanket, mosquito repellant, and fishing lures – sell it for Father’s Day!), baby shower baskets, pamper-yourself packages, the super nerd’s gift bag, gift basket for the Mother-in-law who has everything… the possibilities are endless.  Bundling is especially important with small items that usually are unsellable due to high shipping costs.

photo credit: swanksalot
photo credit: mothernaturebeauty
#3: Evaluate Your Free Shipping Carefully. Shipping costs are the #1 concern of online shoppers, so keeping your shipping low or incorporating it into the price of your products is important.  Offering “free shipping” and simply raising the price of your product to cover it is a viable option, though it may lose you customers who simply compare prices without considering shipping costs.  However, if you do decide to go the “free shipping” route, make sure you have a minimum purchase volume to qualify, or only offer free shipping on items with a profit margin to justify it.  For example, don’t offer free shipping on a pack of napkins if you’re selling them for $1.25 and shipping is going to run you $3.50.  If you want all shipping to be free on your dropshipping website, you can also set it up so that small, cheap items are only offered as an add-on with more expensive purchases.  Or you can have these small items show up as a bonus.  People love free stuff, even if it’s only a stupid little rattle with their purchase of a crib, stroller, and carseat.  Bonus items can be a great promotional tool, and usually add little or no shipping costs.

photo credit: SDCDeaCerte
photo credit: kona99
#4: Consider Shipping When Choosing Between Dropshipping and Wholesaling. The choice between dropshipping and wholesaling may end up depending almost entirely on the shipping costs of your desired product.  Before you jump into bed with a particular dropshipper, the very first thing you should check is their shipping costs.  Shipping charges are often the way that suppliers who offer dropshipping pad their profit margin and make the extra hassle worth their while.  But that extra profit is coming out of your pocket, so try to negotiate for a better rate or go somewhere else if the price is unreasonable.  You could also consider dropshipping most of your products, but carrying an inventory of certain small items that would be too expensive to ship otherwise.

dropshipping, pricing and profits, selling products online, wholesale