What is the best way to define shipping costs in e-commerce?

What is the best way to define shipping costs in e-commerce? | tinobusiness.com
What is the best way to define shipping costs in e-commerce? | tinobusiness.com

I’m doing different tests to find the perfect combination between the sale price and shipping costs.

The following posts on the guide of how to sell on Amazon know that at this time we are selling two products in the store of Spain and also can be used in any other countries.

To analyze sales conversion ratios are comparing into two scenarios:

  1. Shipping and logistics management through Amazon : has the advantage that products shipped by Amazon are marked with “Premium” what makes them stand out from the rest. This label indicates that for customers of “Amazon Premium” Free shipping is what is supposed to increase the conversion rate.
  2. Shipping product through our office : our suitcases occupies scale compared with hairdryer little space so we have a box with 50 units. It has the advantage that saved the shipping cost management by Amazon.

The scale is a product that leaves very little room (1-2 euros) but as I have indicated in previous posts; this allows us to perform experiments at low cost. Now it may even be that we have incorrectly calculated commissions. I am in contact with the customer service Amazon seller to find out if it is really so or there is something that escapes me.

Despite being such a large company where supposedly calculate a 15% commission should not be a major problem, it is advisable to check all invoices. Amazon even make mistakes because in the end there are people behind these well-known logos.




Why I’m releasing as much advance information?


I will not tell you anything new when I say that both the sale price and shipping costs influence the conversion. I mention my observations on the sales of the scale for luggage.



Sale price below 10 euros and shipments costs low

This scenario is the best has become. No wonder that 50% of competitors in the same keyword are above the psychological barrier of 10 euros.

Since we already have 7 positive assessments of the product; the price-quality ratio estimated by a potential buyer appears to be high compared to other products that are more economical. We must not be the cheapest but you better have a good balance between price and reviews.



Selling price above 10 euros and shipments costs low

Selling below 10 euros we were not making money. With Amazon error we were even losing a little with each sale which did not worry us too much as I mentioned above.

This scenario has been the worst-performing level conversion has generated since 1 sale was achieved only through internal announcements Amazon. It seems that if the selling price of a product is around $ 10 and are above you might have a problem. Although it is not essential to have a brand to generate sales in these special cases justifies a higher price.



Sale price below 10 euros and shipments of higher cost

Playing with the shipping cost on Amazon can make sense. Since yesterday you can create templates to differentiate products and regions but this still did not have it under control at 100% so we can not give any recommendation.

Early results from a change to lower sale price and increased shipping cost seems to work. It is true that not yet have enough data to reach a final conclusion.

I leave the answer to the title question open post. My intuition tells me that when we have a market price of around a psychological price (eg 10 euros, 100 euros, etc.) should design this scenario:

selling price below the barrier and compensate with a higher shipping price.

In the case of Amazon should be borne in mind that the commission is calculated on the selling price adding shipping costs.

Now it’s your turn. Would you rather put a low shipping cost or reduce the sales price? Which of the three scenarios presented is what has worked best you (or that you sense is the one that should have better conversion rate?




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