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How to Choose the Right Delivery Pricing Strategy for Your Online Furniture Business

Every online furniture business must set a price for delivering a purchased product to the customer. But when it comes to a delivery pricing strategy for your e-commerce furniture business, how do you choose the right one?

Here are three steps to help you zero in on the approach that’s right for your business:

1. Know the importance of a well-designed delivery pricing strategy.

Why does it matter if you have a strategy behind your shipping price?

The furniture and home furnishings market is one of the fastest growing segments of online retail due in large part to Americans’ increasing comfort with buying oversized items online. The uShip report, Realities in Oversized E-Commerce Delivery in the Amazon Era, found that 22 percent of Americans have bought an oversized item online in the past year. Of those people, 34 percent say they are more likely to buy large e-commerce items than they were five years ago.

At the same time, shipping costs now play a big role in the decision about when and where to buy. In the age of retail giants like Amazon, consumers have come to expect fast, cheap delivery — even when it comes to oversized items such as furniture.

To take advantage of today’s market while remaining competitive, it’s important to have a thoughtfully-designed delivery price strategy that you continue to adapt as your business evolves.

2. Understand the basic pricing approaches.

There are four basic deliver pricing approaches:

  1. Free shipping/shipping included — The seller offers free shipping by folding the delivery cost into the price of the product, by covering the entire cost of shipping, or by some combination of the two.
  2. Subsidized shipping — The seller offers a low, standard delivery price by subsidizing the shipping fee. In some cases, the seller may offer an additional “bulk discount” for customers who purchase multiple items.
  3. Breakeven shipping — The seller charges the customer for the actual cost of shipping.
  4. Revenue shipping — The seller charges the customer more than the actual shipping charge.

Each of these delivery pricing approaches has pros and cons, and you may find that it makes sense to have more than one approach depending on what product is being purchased.

3. Consider key aspects of your business.

The right pricing approach depends on your specific business. It requires you to think through factors such as your average sale price, your target market, the uniqueness of your product and your business goals.

You may decide that one of these aspects is more significant to your business than another, but they all should weigh into your strategy to some degree.

Once you land on the right strategy for your particular business, you’ll be well on your way to winning over buyers and competing in the Amazon era.

Learn more about delivery pricing strategies and how to choose the right approach for your e-commerce furniture business:

Download the paper, Four Shipping Price Strategies for Your Online Furniture Business.