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Need Return Shipping Advice For Potential Ecommerce Business

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Scuur

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Hey everyone!

Been awhile since I've last posted. I've been working on an idea on my head for the past couple of weeks, I've finally decided to put pen to paper. My issue has been finding concise information on return shipping fees. The idea will have a near 90% return rate. Think old school Netflix with the ability to buy DVDs. Similar idea to old-school Netflix in a different business area. With the rates I was looking at it looks like the cost of free shipping would kill the margins if they ordered more than 2 products a month. Customers ordering more than two products a month would be highly likely. I'm sure a few of you have experience with this. Can anyone recommend companies like endicia that would help me get rates as low as possible? My average packing weight for reference would be about 10 ounces or little over half an lb.

Any thoughts ideas, I could charge more for services. Although I think about 10% the cost or $15 dollars is a good price to try out the products because there are so many options. Also bracketed tiers if you want to try more than one at a time.

Thanks
Mack
 

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Are there business bulk rates available from the shipping companies that you could use?
 

ShamanKing

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So your avg packaging w/ item is 10oz to 8oz? What system or carrier are you currently using or looking at?
 

biophase

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Assuming you are in the US, anything under a pound can ship first class mail which would cost you between $2.50 and four dollars.
 

Scuur

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Are there business bulk rates available from the shipping companies that you could use?
I looked it about .35 to $.40 cents off.

So your avg packaging w/ item is 10oz to 8oz? What system or carrier are you currently using or looking at?
I'm looking at Endicia for the shipping system going through USPS.

Assuming you are in the US, anything under a pound can ship first class mail which would cost you between $2.50 and four dollars.
Yes, in the U.S. is it about $2 dollars both way? For the return as well.
 

biophase

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USPS doesn’t care if it’s a return or why you are sending something. They just charge based on weight and distance. It’s going to be at least $2.70 minimum each way.
 

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Just build it into your price, I suppose. It costs $2.70 each way, and you expect 90% of people to send it back.

So you have 100% * $2.70 + 90% * $2.70 = add $5.13 to your price. Otherwise, if you just want to buffer returns, add $2.43 to your price.
 

ShamanKing

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If you are scurr of returns make your policy: Returns accepted buyer responsible.
 

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Personally, it sounds to me like your business model might be skewed a bit for scaling unless you can sustain losses for a time until you meet some profitability.
Is this some form of subscription based business? Are you planning on automating or is this labor intensive? Can you give us an idea what your charging for a product that has such a high return rate?
With a 90% return rate, it sounds highly labor intensive besides your shipping costs.
Perhaps I'm not seeing the picture. ..
 

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