How much to charge shipping for a free CD

by troy23
21 replies
I understand you can make a small profit off the shipping price of a free CD/DVD.

I was going to put this through Kunaki as it is the only CD delivery service I am familiar with right now.

I wondered what was a good price to cover shipping and make a little extra, without putting potential buyers off.
#charge #free #shipping
  • Profile picture of the author jasondinner
    Originally Posted by troy23 View Post

    I understand you can make a small profit off the shipping price of a free CD/DVD.

    I was going to put this through Kunaki as it is the only CD delivery service I am familiar with right now.

    I wondered what was a good price to cover shipping and make a little extra, without putting potential buyers off.
    Maybe the best thing to do in this stage of the game with all the new regulation going on with FTC and Visa/Mastercard cracking down on certain merchant providers, I think it would
    be best if you do everything in your power to NOT put potential buyers off.

    Especially with something as trivial as charging a little "extra" for shipping on a free CD.

    Cover your costs to produce and ship the CD on the front end, then make your profits
    on the back end.

    You will be glad you did this.

    - Jason
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  • Profile picture of the author seasoned
    Technically, it is illegal to charge "shipping" with the intent to make a profit, at least in the US. If that i your goal, say "shipping AND HANDLING". Of course, everyone realizes that shipping requires a third party, so you have to charge a LITTLE more, and some want to fix shipping, so you have to charge even MORE BUT, if you charge $50 to ship just a cd, someone complains, and you can't justify it, you COULD end up across the table from the FTC.

    Handling DOES imply a small amount, but it is for OTHER processing, outside of shipping.

    Steve
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    • Profile picture of the author JohnMcCabe
      Here's a formula I dug up awhile back...

      Start with your real cost of fulfillment, say $3.50 just for the sake of having some numbers to play with.

      Add your advertising cost per lead, say another $2.00.

      Add your "handling charge", say 10%-15% - in this example, you could round that up to another $1.00.

      So your shipping and handling fee would be $3.50 + $2.00 + $1.00 = $6.50

      Plug in your own numbers and see if they make sense...
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  • Profile picture of the author Scott Ames
    For sure don't do what I see many eBay sellers doing. They offer something at a good price then charge a large fee for shipping.

    I have seen listings with a Buy It Now price of $5 and a shipping fee of $35 . I'm surprised eBay lets people do that.

    If people feel ripped off there goes your business. Just charge enough to get it to them and make money on the backend. That's what I would do.
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    • Profile picture of the author Loren Woirhaye
      Originally Posted by Scott Ames View Post

      For sure don't do what I see many eBay sellers doing. They offer something at a good price then charge a large fee for shipping.

      I have seen listings with a Buy It Now price of $5 and a shipping fee of $35 . I'm surprised eBay lets people do that.
      Ebay has changed their policy. It now assigns maximum shipping
      charges to media and common commodity items. I'm not sure how
      it all works, but the maximum allowed is actually a little too low
      to cover real shipping costs in some cases, as with books, which
      vary considerably in weight.

      The intent is to shift the real price into the "price" column and
      suppress the shenanigans with inflated shipping charges.

      I'm not sure how widespread this new policy is.
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  • Profile picture of the author Michael Oksa
    I believe it looks incredibly suspicious when the S&H is more than the listed cost of the item. My guess is that I am not alone in this regard.

    Here's a wild idea!

    Instead of charging $5 (as an example) for S&H on a "free" CD, why not charge $5 for the CD and point out that shipping is free? You still make the same profit, but not at the sake of alienating distrustful prospects.

    All the best,
    Michael
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    • Profile picture of the author dualdtmz
      Originally Posted by Michael Oksa View Post

      I believe it looks incredibly suspicious when the S&H is more than the listed cost of the item. My guess is that I am not alone in this regard.

      Here's a wild idea!

      Instead of charging $5 (as an example) for S&H on a "free" CD, why not charge $5 for the CD and point out that shipping is free? You still make the same profit, but not at the sake of alienating distrustful prospects.

      All the best,
      Michael
      Good idea! If you say "free cd" just pay shipping costs it makes it sound like the product is too cheap to sell. But if its $5 with free shipping then it shows more value. just my 2 cents, well 5 cents now due to inflation, ha
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      you're supposed to put a link here to sell something

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  • Profile picture of the author troy23
    Have to say I did not plan on ripping anyone off by adding something huge.
    Was thinking of maybe $1 on top of the Kunaki fee.

    Sure I could charge $5 for the CD and say shipping is free, but was advised people like getting something for Free.
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    • Profile picture of the author Michael Oksa
      Originally Posted by troy23 View Post

      Have to say I did not plan on ripping anyone off by adding something huge.
      Was thinking of maybe $1 on top of the Kunaki fee.

      Sure I could charge $5 for the CD and say shipping is free, but was advised people like getting something for Free.
      You mean like shipping???



      ~M~
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      • Profile picture of the author Silas Hart
        Free CD + $5.00 Shipping is more enticing than $5.00 CD and Free Shipping.
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        • Profile picture of the author Michael Oksa
          Originally Posted by FaJeeb View Post

          Free CD + $5.00 Shipping is more enticing than $5.00 CD and Free Shipping.
          Not to me it isn't. Not even close. I wouldn't buy the first offer, but would consider the second.

          But...that doesn't mean either of us are correct. We don't know what niche it is, the target market, etc. Therefore, the logical answer is for troy23 to do a split test and see which works one gets better results.

          All the best,
          Michael
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          "Ich bin en fuego!"
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          • Profile picture of the author rosetrees
            If you have to pay for it, it isn't free!
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            • Profile picture of the author DogScout
              Originally Posted by rosetrees View Post

              If you have to pay for it, it isn't free!
              I am surprised that wasn't addressed in the new FTC guidelines (although maybe it is)

              There are niches that depending on the state, you cannot use that word, even if both the item and the shipping is free. I'd certainly check with a state attorney before proceeding.
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              • Profile picture of the author rosetrees
                @DogScout - especially, as the OP clearly stated that he intended making a profit on the shipping and handling - ie charging the customer for the CD.

                Edit : I just found this in the FTC "Guidlines Against Deceptive Pricing"

                They should not offer an advance sale under circumstances where they do not in good faith expect to increase the price at a later date, or make a ``limited'' offer which, in fact, is not limited. In all of these situations, as well as in others too numerous to mention, advertisers should make certain that the bargain offer is genuine and truthful. Doing so will serve their own interest as well as that of the public
                and this isn "FTC GUIDE CONCERNING USE OF THE WORD ``FREE''
                AND SIMILAR REPRESENTATIONS"
                Thus, a purchaser has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise or service by marking up the price of the article which must be purchased, by the substitution of inferior merchandise or service, or otherwise.
                (I added the emboldening)
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          • Profile picture of the author Silas Hart
            Originally Posted by Michael Oksa View Post

            Not to me it isn't. Not even close. I wouldn't buy the first offer, but would consider the second.

            But...that doesn't mean either of us are correct. We don't know what niche it is, the target market, etc. Therefore, the logical answer is for troy23 to do a split test and see which works one gets better results.

            All the best,
            Michael
            In all respect, I've split tested both with informational products and physical products and Free Item + Shipping is the most chosen method.

            What's happened is what always happens in instances where someone no longer becomes a consumer but more of a provider. We judge others methods by their tactics to consume a profit, as opposed to seeing things only through the mind of an everyday average consumer.

            Like you, I wouldn't choose Free + Shipping either. Thats because we are both educated consumers or providers who see that the profit is found in shipping which may make us feel is unethical and unworthy of our purchase.
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            • Profile picture of the author Nu
              Well, this might seem like a strange recommendation. However, maybe you should copy the Video Professor. Doesn't he give you a "free" CD and then charge $9.99 or thereabout for the shipping and handling?

              It seems to work for him.
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            • Profile picture of the author Michael Oksa
              Originally Posted by FaJeeb View Post

              In all respect, I've split tested both with informational products and physical products and Free Item + Shipping is the most chosen method.

              What's happened is what always happens in instances where someone no longer becomes a consumer but more of a provider. We judge others methods by their tactics to consume a profit, as opposed to seeing things only through the mind of an everyday average consumer.

              Like you, I wouldn't choose Free + Shipping either. Thats because we are both educated consumers or providers who see that the profit is found in shipping which may make us feel is unethical and unworthy of our purchase.
              I think that's great you were able to test that. However, your results are just that, your results. If we all relied on other people's testing, then none of us would ever have to test again.

              I'm not arguing with your results at all. It's just that different target audiences will yield different results.

              For example, what if troy23's niche just so happens to be "educated consumers"? If you follow.

              He has to do his own testing to know for sure.

              All the best,
              Michael
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              "Ich bin en fuego!"
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              • Profile picture of the author Silas Hart
                Originally Posted by Michael Oksa View Post

                I think that's great you were able to test that. However, your results are just that, your results. If we all relied on other people's testing, then none of us would ever have to test again.

                I'm not arguing with your results at all. It's just that different target audiences will yield different results.

                For example, what if troy23's niche just so happens to be "educated consumers"? If you follow.

                He has to do his own testing to know for sure.

                All the best,
                Michael
                Very good point.
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  • Profile picture of the author Lloyd Buchinski
    Shipping and handling charges get to me. (btw I didn't adjust the first line in my sig for this thread).

    One software company I have ordered from charges $65 to ship to Canada. Even with that it was still the cheapest last time I ordered something from them quite a few years ago. They substituted the item I ordered which got me grouchy and they agreed to take it back and send the right one now that it was in stock. In the process of doing all that I happened to notice that their actual shipping charges by the company that was doing the delivery were $6.

    This time I emailed them, asked if they could send something by regular post and drop the shipping charges a bit. They replied that no, sorry, they couldn't do that. It was technically and humanly impossible. (or something like that) This time I found a company that did come out quite a bit cheaper when you added in s & h, and went with them.

    But of course most customers aren't going to do the checking around.
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  • Profile picture of the author rajput441
    I agree with Mr. Michael Oksa, for me $5 + free shipping is more attractive, but that is just me. However the best way to do do it is make a test. Good luck
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