If you’re selling items online, you have to make sure that you can compete with brick and mortar stores on every level. People do love to shop on the Internet, but one of the huge drawbacks is that they have to have everything shipped to them. If this is going to cost them a lot of extra money, they just factor it into the overall price for the purchase. When this puts them up over what they would spend at a local store, they may decide to shop elsewhere, even if the price you are offering is less than what that store can offer.
These days, what people expect is free shipping, even if they have to wait a bit longer to get their items. If they do need to get the items quickly, that desire often trumps getting the best price, and they may be willing to pay more for expedited shipping options. But, if there are no time constraints, they do want to make sure that they get the lowest price that they can.
This may need to change your business model a bit, in some cases. For example, many online booksellers have made money on shipping alone. They will sell used books for just a penny, and then they’ll charge $3.99 for shipping. People will pay it, not knowing that it really only costs about $2.50 to send the book to them. The sellers make absolutely nothing – and even lose money – on the books themselves, but they make their money from pocketing what is left from that shipping charge.
If you wanted to use this type of a business model, it may still be possible, but you will have to keep your prices low enough that the total does not exceed what people could get at a brick and mortar store. This could mean pricing things at cost, or even below, depending on the base prices. In many cases, it will work better to have higher prices – as long as they’re roughly what people would expect – and then you can offer free shipping as a deal that draws customers in and gets their attention.
Remember, this is something that is almost expected with online sales these days; that is how prevalent it has become in the industry. To start driving sales today, you must give customers what they desire, counting on the increased number of sales to make up the difference.
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