Any seller, consignment or not, will tell you that shipping is one of the biggest expenses of e-commerce. Which begs the question…
Should your client pay the shipping costs on their consignment items?
There are several scenarios when it comes to shipping, but no matter how you’re shipping your items, someone’s got to pay for the shipping. Will it be you or your client? Or is there a third option?
Most of us are already charging our buyers directly for the shipping costs when they purchase something from us. As long as what the buyer pays covers everything, and that’s usually the case when you’re talking about calculated shipping using the actual item weights, couldn’t we just leave shipping out of the SA equation entirely since the buyer has already paid it? Or course, if you did still bill the client for those shipping costs, you could turn that into a source of profit instead of a breakeven point.
If your shipping costs don’t cover the cost of shipping or if they only cover it some of the time, it might make sense to have your client shoulder some of that burden. If you offer free shipping on all your items—free shipping can be very attractive for buyers, thus increasing your sales—shouldering these costs yourself can eat up your profits very quickly, so you may want to bill the client for them. But shipping costs, especially international costs or overnight, can be very high and your clients may not like the sticker shock.
If you’re charging a flat-rate shipping cost and you lose money on some shipments, you may also want your clients to cover all or some of this burden. But would you charge the clients for the actual shipping or the flat rate the buyer paid? The whole shipping costs or just the difference between actual and charged shipping? Would you pass the loss from each shipment on to them directly? Would you do the same if there was a profit?
If you do decide to pass shipping charges, either whole or in part, on to your clients, there are a few more things to consider.
- If you charge a handling fee in addition to the shipping costs, would you pass that on to the client?
- Where do shipping upgrades such as insurance, signature or delivery confirmation fit in? Will you require the client to pay for protection like insurance on certain items such as fragile or delicate items?
- What happens when an item is returned? Will your client have to shoulder return shipping costs?
How do you handle shipping costs with your clients?