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  1. #1
    Junior Member
    Join Date
    Apr 2020
    Posts
    4

    Any ideas to cut the cost of shipping

    Aloha,

    I'm moving into online sales for my roasted coffee. I'm located in Hawaii near Honolulu and we will be shipping anywhere from 6 oz. to 25lbs but most commonly (1) or (2) 12oz bags. I have not figured out a way to ship in a cost effective way for my growing customer base on the mainland. Does anyone have ideas to get this cost down? Asking customers to pay 10 or 15$ in shipping for a lb of coffee wouldn't make sense to anyone. I cannot see pushing more than 5$ of shipping cost to the customer.

    Help please!

  2. #2
    Senior Member
    Join Date
    Jan 2007
    Location
    Salt Lake City
    Posts
    1,045
    Aloha,

    There are a couple (few) of things that I've learned.

    1) Shipping costs money
    2) Customers know that shipping costs money
    2.3) At some dollar figure, it's not worth it

    Whatever that thing is, it's compounded by having a business in Hawaii.

    Short answer is: Only do larger ($60+) sales of coffee online.

    As a small coffee shop/roaster, I can't maintain the type of inventory to always have a great selection because I don't know from day to day what I will have in inventory, but I want the online sale too, so I only offer subscriptions or a larger "custom roast".
    What I do is I give up a bit of profit on the per bag for the larger sale. Shipping is FREE (included) - and "2. Customers know that shipping costs money" so I meet somewhere half way to defray the shipping cost.


    At our shop our coffee ranges from $22 to $26 per 12 oz bag.
    Shipping Priority is $8.40 up to 3 bags - cause it needs to get their fast and fresh. $15 Shipping for 4-6 bags.
    Our 3 month is $83, of which $25.20 is actual shipping cost so that puts the cost per coffee to the customer @ $19.26 per bag which is stunningly low for what we do.
    So I will give up an average of $4.75 per bag to guarantee the $83 "in the till".
    Also I do custom batches for a little under $100 (including shipping) for 4 bags of coffee. (you could do it as 5lb or 2 kilo or whatever works for you.
    So you really can't cut shipping costs, but if you only focus on things say $60+ (as an example) and shipping is $15-$25 dollars on that, no one will bat an eye.

    And once you wrap your head around how much people will pay locally for crap food delivered by Uber Eats then you won't worry about shipping.

    The other big key is to make sure you are offering a better product. Compete on quality, the price will take care of itself.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  3. #3
    Senior Member
    Join Date
    May 2014
    Location
    Kansas City
    Posts
    1,341
    It's all EXPENSIVE. One thing will help is using a shipping aggregator... check out shippingeasy.com, ship pirate or others similar. They will all give you Commerical Plus USPS rates which will be the lowest you can get without being a bulk customer.I

  4. #4
    Junior Member
    Join Date
    Apr 2020
    Posts
    4
    Quote Originally Posted by Musicphan View Post
    It's all EXPENSIVE. One thing will help is using a shipping aggregator... check out shippingeasy.com, ship pirate or others similar. They will all give you Commerical Plus USPS rates which will be the lowest you can get without being a bulk customer.I
    Thank you. I had not heard of ship pirate but I will compare them to shippingeasy.

  5. #5
    Junior Member
    Join Date
    Apr 2020
    Posts
    4
    Quote Originally Posted by John P View Post
    Aloha,

    There are a couple (few) of things that I've learned.

    1) Shipping costs money
    2) Customers know that shipping costs money
    2.3) At some dollar figure, it's not worth it

    Whatever that thing is, it's compounded by having a business in Hawaii.

    Short answer is: Only do larger ($60+) sales of coffee online.

    As a small coffee shop/roaster, I can't maintain the type of inventory to always have a great selection because I don't know from day to day what I will have in inventory, but I want the online sale too, so I only offer subscriptions or a larger "custom roast".
    What I do is I give up a bit of profit on the per bag for the larger sale. Shipping is FREE (included) - and "2. Customers know that shipping costs money" so I meet somewhere half way to defray the shipping cost.


    At our shop our coffee ranges from $22 to $26 per 12 oz bag.
    Shipping Priority is $8.40 up to 3 bags - cause it needs to get their fast and fresh. $15 Shipping for 4-6 bags.
    Our 3 month is $83, of which $25.20 is actual shipping cost so that puts the cost per coffee to the customer @ $19.26 per bag which is stunningly low for what we do.
    So I will give up an average of $4.75 per bag to guarantee the $83 "in the till".
    Also I do custom batches for a little under $100 (including shipping) for 4 bags of coffee. (you could do it as 5lb or 2 kilo or whatever works for you.
    So you really can't cut shipping costs, but if you only focus on things say $60+ (as an example) and shipping is $15-$25 dollars on that, no one will bat an eye.

    And once you wrap your head around how much people will pay locally for crap food delivered by Uber Eats then you won't worry about shipping.

    The other big key is to make sure you are offering a better product. Compete on quality, the price will take care of itself.
    Thank you John,

    That makes a lot of sense with the shipping and I couldn't agree more with your outlook on quality. I really appreciate you sharing your thoughts and some of the basic numbers.

    It seems that many customers (Not all, but some) have gotten used to the "Amazon Prime" concept of free shipping . Admittedly, as a consumer I too dislike surprises at the check out with large shipping charges. I also understand that there is a cost to not walking into a store and buying local. I like the way you are upfront transparent with the pricing and then bundle it.

    Again, thank you for your response.

  6. #6
    Senior Member
    Join Date
    May 2014
    Location
    Kansas City
    Posts
    1,341
    Quote Originally Posted by BBRoast View Post
    Thank you. I had not heard of ship pirate but I will compare them to shippingeasy.
    Are you using anything yet? Shippineasy is free up to 50 packages a month and with this recent switch, I'm above that volume and having to pay. So, I'm doing a review of all of them right now. There is also ShipStation which seems to be popular. One thing to consider is what eCommerce platform you are using and if it integrates with a shipping aggregator. I currently use Shopify / Shippingeasy... the nice thing is the Shippingeasy pulls all of my order info into their tool / I create the shipping and once I pay and create the labels it updates my eCommerce platform. Hollar if you have questions.

    JOHN P - GOOD TO HEAR FROM YA. I sent a few friends to your shop back in November..

  7. #7
    Senior Member
    Join Date
    May 2014
    Location
    Kansas City
    Posts
    1,341
    I looked at a couple of the diff platforms... very little difference. This comparison shows shippingeasy at $29 but they have a free version for under 50 packages per month.

    https://www.capterra.com/shipping-so...Easy-vs-Shippo

  8. #8
    Junior Member
    Join Date
    May 2020
    Posts
    5
    Quote Originally Posted by John P View Post
    Aloha,

    There are a couple (few) of things that I've learned.

    1) Shipping costs money
    2) Customers know that shipping costs money
    2.3) At some dollar figure, it's not worth it

    Whatever that thing is, it's compounded by having a business in Hawaii.

    Short answer is: Only do larger ($60+) sales of coffee online.

    As a small coffee shop/roaster, I can't maintain the type of inventory to always have a great selection because I don't know from day to day what I will have in inventory, but I want the online sale too, so I only offer subscriptions or a larger "custom roast".
    What I do is I give up a bit of profit on the per bag for the larger sale. Shipping is FREE (included) - and "2. Customers know that shipping costs money" so I meet somewhere half way to defray the shipping cost.


    At our shop our coffee ranges from $22 to $26 per 12 oz bag.
    Shipping Priority is $8.40 up to 3 bags - cause it needs to get their fast and fresh. $15 Shipping for 4-6 bags.
    Our 3 month is $83, of which $25.20 is actual shipping cost so that puts the cost per coffee to the customer @ $19.26 per bag which is stunningly low for what we do.
    So I will give up an average of $4.75 per bag to guarantee the $83 "in the till".
    Also I do custom batches for a little under $100 (including shipping) for 4 bags of coffee. (you could do it as 5lb or 2 kilo or whatever works for you.
    So you really can't cut shipping costs, but if you only focus on things say $60+ (as an example) and shipping is $15-$25 dollars on that, no one will bat an eye.

    And once you wrap your head around how much people will pay locally for crap food delivered by Uber Eats then you won't worry about shipping.

    The other big key is to make sure you are offering a better product. Compete on quality, the price will take care of itself.
    Thank you, John! An amazing approach!

  9. #9
    Member
    Join Date
    May 2020
    Location
    Sarasota, FL USA
    Posts
    35
    What kind of volume do you expect to move initially? If you can establish a relationship in the mainland
    maybe you can do one shipment and they can separate and ship the individual orders

  10. #10
    Junior Member
    Join Date
    Aug 2019
    Posts
    8
    Very good idea here

 

 

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