How do you handle shipping charges?

[Spexvet]

What do you do?

[CME4SPECS]

In the state of California, we pay sales tax on the wholesale price. Eyeglasses are not taxable to the consumer. I factor that in as well.

[chip anderson]

CM4 your think you got a problem.
In Mississippi, doctors pay sales tax on wholesale costs only (in order that they will not appear to be merchants). But us independent dispensaries need to collect sales tax on the item at time of sale on the full retail amount.

It gets worse, I have to pay sales tax on artificial eyes, even when medicare or medicaid pays (sort of) the bill.

Chip

[CME4SPECS]

Wow! Here we pay sales tax at wholesale on frames and lenses. Consumer pays sales tax on non-rx sunglasses and accessories. Before most vendors got their software to adapt to Ca, I had to have two accounts one for opthalmic frames and one for sunglasses. That problem was resolved some time ago.

[Mikef]

Shipping charges are just like rent and electrical. They are all costs that related to doing busness.

As far as mark up goes. I think if you have a product that sells well mark it up more. If it does not put it on sale.

2 cents

[Bev Heishman]

We used to mark up to only double + 10. It severely increased our cost of goods when the prices started climbing and shipping charges from manufacturers increased to replace the lower priced item that was on the board. This is often hard to detect if you re not computerized. Now, we price according to frame facts and add an amount that covers shipping (which in many cases this year is amounting to $6.and higher) plus the cost of the cleaning kit, or lens cloth + a pair of silicone no slip pads plus a nice case to the price that we provide and possible future services we do not charge for. My estimate is $30 to provide this type of service.

[CME4SPECS]

Bev, Harry is going to be all over you for that post!

[Johns]

Use the flinch method

CME4SPECS:

Harry should be all over Bev for that post !:finger:


If you're margins are so close that shipping is a big factor, your mark-up is not high enough.

My mark-up for mid-level frames : I take the price of the frame, add shipping, add the cost of a ski lift ticket for my family, factor in my house payment, add the cost of my son's tuition, adjust it for groceries, and add $10 -

My mark-up for high end frames: Take the cost of the frame, add shipping, then,while the patient is having her exam, I go through her purse, find her checkbook, find her balance, and divide it by 3. Next, I go into the parking lot and see what kind of car she drives. I take the estimated value of her car, divide it by seven (my son's age). When the exam is over, I count the number of rings on her fingers and mutiply it by 14 (the # of yr's of tuition left to pay). If the end number seems to high, I subtract enough off so I can cover a nice vacation for my family, but still leave enough for the customer to buy gas on the way home. If the number seems to low, I add $299. Whatever number I end up with, I add $10.

This might seem complicated, but I used to be in frame sales, and this is nothing compared to the formulas that some of the OD's told me they use. I once had a guy tell me he wouldn't buy my wholesale frames because I didn't charge enough. (When he plugged his formula into my prices, the retail was too low!! - true story) That's all I needed to hear for me to get into retail myself.

[Spexvet]

I can hear you now...

"that'll be $800, Mrs. Jones"
"What! That's outrageous"
"Did I say $800?, I meant 2 pairs for $69!"

:p

[Spexvet]

In summary

It looks like we mostly ignore shipping charges, that's certainly the way I have done it. I just got an invoice for a pair of Coccoons. They're not different from others, I'm not being critical of them or any company - shipping is a legitimate cost. Hopefully you know the wholesale cost of Coccoons, the MSRP is $39.95. So my profit on that pair of Coccoons is reduced by 30% when I factor in the shipping charge. I think, from now on, I'll add in the shipping, then mark up that total.

[Live Eyewear]

A $6 shipping fee on one pair of Cocoons increases your cost significantly. When you order Cocoons, remember that Live Eyewear ship all orders with a flat shipping fee of $6. (Guaranteed delilvery within three days)

However, customers are reminded that we waive shipping charges on all orders of six pairs or more. So, it really pays to try and get 6 Cocoons in at a time.

One more thing: Every quarter, you receive a FrameBack credit of 20%... so if you bought $500 worth of Cocoons in a calendar quarter, you would receive a $100 credit that you can use to the purchase of additional Cocoons. this also helps off set the price of shipping, as Cocoons do retail for $40-$45.. so a $6 shipping charge on one pair can severly hamper your gross profit.

We try our best to give the best service possible with shipping and FrameBack. Every week we ship thousands of orders to eye care professionals. Currenty, 65% of all orders are shipped with no shipping charges as customers buy in lots of six or more.

One more thing... the MINIMUM suggested retail price for Cocoons is $39.95. However, warranty registrations show that the average U.S. customer is buying Cocoons for approximately $46.00. Still a great value, especially when one looks at the quality and lifetime warranty. $39.95 is a little on the low side, so if you wanted to make sure you re-couped shipping, I would suggest a retail price of $45.

Hope that helps.

[Spexvet]

...
One more thing... the MINIMUM suggested retail price for Cocoons is $39.95. However, warranty registrations show that the average U.S. customer is buying Cocoons for approximately $46.00. Still a great value, especially when one looks at the quality and lifetime warranty. $39.95 is a little on the low side, so if you wanted to make sure you re-couped shipping, I would suggest a retail price of $45.

Hope that helps.

I truly did not mean to disparage your product, company, or your way of doing business. I used the example because I received the invoice while I was actually posting the response. I think I'll price Coccoons at $49.00, They're still a good value, considering the price of Rx sunglasses.

[Live Eyewear]

Absolutely. no offense taken. I just want to make sure that you understand your options.

[Johns]

Live Eyewear makes a great point about how important it is to buy in larger quantities. Considering some companies will throw in shipping as an incentive, it is well worth it. Even without the gratis shipping, it is cheaper to ship 10 pair than one pair when you divide it among the 10.

Many of the products are like toilet paper - it's not like you don't know you're going to need more of it. Might as well stock up.

[Spexvet]

Live Eyewear makes a great point about how important it is to buy in larger quantities. Considering some companies will throw in shipping as an incentive, it is well worth it. Even without the gratis shipping, it is cheaper to ship 10 pair than one pair when you divide it among the 10.

Many of the products are like toilet paper - it's not like you don't know you're going to need more of it. Might as well stock up.

But the patients seem to always pick the model/color/size that you don't have in stock, don't they?:hammer: