Online retailers are most concerned about what, or how, should I charge for any shipping category? Should the online retailer calculate shipping based on the product weight or add something for packaging? What does my customer expect?
UPS does not normally give advice but it’s understandable that online retailers think of UPS when pondering these “what/how should I charge” questions.
Definitely online retailers should be charging the cost of the package shipping not the product shipping. Consumers understand that packaging materials add weight and they’re fully expecting that total weight to be what the shipping cost is based on. If you’re in a drop ship scenario you need to make sure that the shipping costs quoted by the supplier are the actual shipping costs not based on the product weight.
If you’ll be housing your own inventory and packing yourself then you’ll learn over time what percentage over the base product weight to use in order to calculate an accurate shipping weight. If you’re just getting started make sure to give yourself a generous cushion in order to protect yourself from taking losses early on. Remember in the case of sites like Amazon.com to use the shipping rates they allow.
Some cardboard boxes can weigh anywhere from half a pound to four pounds. Another item to keep in mind is the actual cost of the materials themselves. Some shippers take that cost into account in pricing the product while others add as separate handling fee to cover those costs. Which is better? The general rule is that simpler is better. While it’s nice to have lower purchase price, consumers don’t like to see additional charges they’re not expecting. While they’re certainly expecting a shipping charge they may be turned off by a handling fee, perceiving it to be your means of generating additional profit. If you’re drop shipping you’ll need to understand what your supplier’s practices are and determine whether or not they help you.