Before your first order, it is important to analyze how shipping affects your business costs and eventually how to charge your customers for it. You must choose the right strategy that will cover all your products and delivery location. 

 

One thing you must be able to do is to calculate the actual shipping costs of delivering your product. And a number of factors can influence the cost of shipping your product. The weight and dimensions, the destination, the value of the product(precious stones), delivery time. All of these are important considerations when calculating the cost of shipping. 

 

After you find a shipping service to use, calculate your shipping costs to make sure your margins can stay high. 

 

For example, 

If your product costs N50,000

shipping fee of N4000, 

packaging cost N2100, 

 

Total production cost is N56100, 

To make a profit of roughly 50% on your product, you need to sell it for roughly N90,000.

 

This is a rough analysis of the need to factor in the costs of shipping when listing your product online. 

 

Calculating shipping costs will help you choose a shipping strategy and decide at what price to sell the products. If your margin is high, you may want to absorb the costs of shipping domestic orders and offer free shipping to your local customers. To compensate for shipping expenses, you can slightly increase product prices in your online store. 

 

Alternatively, you can choose to charge your customers the exact amount that you pay for getting their order shipped.

 

After you have calculated your shipping costs and how it affects your business, you will need to choose a shipping strategy that will cover all of your products and destination zones. There are three popular shipping strategies

 

1. If you have a local offline store, you can offer an in-store pickup service for customers who want to pick up the product after ordering online. Customers that come in will also have access to more physical products and you can offer them discount coupons for picking up their item.  
2. Charging exact shipping costs from your customers. After paying for their product on your online store, on delivery, they would pay for shipping 
3. If you deliver products yourself or your products have a similar weight and size, you can offer flat rate shipping for delivering your products to the customer’s location. For example, you can charge N2000 for the local delivery of any order in your store.

 

Knowing how much money your business pays to logistics companies will help you determine how to compensate your profits. After all, you’re doing business to make profits.