Question

Topic: Other

Pricing / Shipping Strategy

Posted by Anonymous on 5/21/2008 at 1:51 PM ET 125 Points
We are currently manufacturing and selling outdoor products direct in the US, B2B & B2C. Our orders always have to ship common carrier and we ship from the south east. West coast orders have high shipping cost. Our average order size is around $5,000. Average shipping close to us is about 10% but can easily be 25% on the west. We tend to scare off those customers with the shipping. Surprisingly alot california customers pay with no problem of the shipping cost due to things already being so expensive there. Usually the opposite for washington! I am considering uping the product price by 10% and also doing a fixed 10% shipping cost. I would also be able to offer some discounts to local customers. Our pricing is based off per unit so a 10% increase would be shown as $8.25 vs. $7.50. I think that would be better than a $1000 vs. $500 shipping charge. Our products are on the higher end of our market also. Distribution and warehousing in the west are really not options now. Let me know if anyone has feedback, alternatives? Also if you need any other info.
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RESPONSES

  • Posted by jcasalou on 5/21/2008 at 3:36 PM Accepted
    Is there a way you can find an outlet to partner with out west? They would act as an authorized dealer. You can set a minimum purchase requirement in order for them to become a dealer/distributor. This would make it worth your while to pay for the shipping out there.

    Or if the bulk purchase price is low enough they wouldn't mind eating/sharing the shipping costs with you. I suppose this all depends on the volume of units you sell on the west coast.

    This would alleviate the shipping woes and possibly increase sales by the ability to do more volume.

    Jonathon Casalou
    Business Development & Marketing
  • Posted on 5/21/2008 at 4:15 PM Author
    Our products are a little complicated. All orders are custom for each customer. There is also a lot of different product options. I really have to ship each order seperate. The only way to setup there is to start another operation.
  • Posted by Jay Hamilton-Roth on 5/21/2008 at 10:43 PM Accepted
    Ideally, find a low-cost shipping option - teaming up with another service that delivers to the Southeast from the West coast (so their trucks can return full of your goods).

    Increasing your pricing to hide your shipping charge may be fine, but may cause problems with your more local clients.

    It sounds like the California market isn't the problem - it's the Northwest. From their perspective, what other vendors could they choose that offer similar services to yours, and how much would it cost for similar quality? That's the bottom line.
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