IF you choose not pass the cost on to the customer, then "YOUR" postage fees
may have just doubled. But you really need to evaluate options here. You can
pass this through to the customer OR work on getting more multiple orders so
that your postal increase percentage gets reduced since your per order price
went up.
We did 2 things to prepare for this change. I heard about the
increase as we all did back in December 2006. It was up for "initial review".
There were no particulars at the time on what the increase would be at all, but
just knowing there was a review for consideration set off the bells. You know if
they are thinking about it, they are going to do it.
Of course the
approved changes were FAR WORSE than I could have anticipated. Now that the
change is here it is time to analyze how to navigate the change without it
hitting you in the wallet.
If you don't want to raise fees any more,
start reviewing several options some of which includes increasing order volume,
reducing shipping costs and elimination of DC on small items. These strategies
should net zero increase overall or a small marginal increase for most items.
It is the low to mid tear fees that have increased the most. If we get
those 3 oz orders up to 1 lb orders, the increase is a whole lot less percentage
wise:
An old 3 oz flat package cost $ .87 cents, then new cost is $1.14
BUT if it has to go parcel level it is a whopping $1.65 (with delivery
confirmation) that is nearly doubled at 89.66%. But if you get the same person
to order 1 lb you pay only about 16% more in postage fees than before. So here
are some suggestions for aiding in deflating some of the increases.
- Immediately start cross-promotion of like items in ads. If you have been allowing eBay's auto technology to do it for you, now is the time to take control of your best cross promotion strategies.
- Up-sale at check out is very important now more than ever.
- Bundle like items to get special package "Deals" for customers. This is really a good one because you could actually sell a ring and a necklace together and reduce the margins to offer the customer a hella good deal, while you make 2 sales instead of one and save on shipping.
- Offer "Free Shipping" specials on bundles or multiple orders. I think free shipping as a business model does not work 1/2 as well as Free shipping on say ... $25 or more. It makes the customer order just one more thing to take advantage of the free shipping savings.
- Investigate a flat shipping business model by order value or quantity size.
- ... more to come...
)
