How to handle shipping costs with dropshipping?

Sharon15
Pathfinder
100 0 35

I'm setting up a new store in Shopify and considering if I need to buy an app to help me with fulfilment or if I can do it manually.  My shop will be small for the first year, but I'll be doing a mixture of in-home inventory and working with dropshippers.  I have no problem sending my orders to the dropshippers, but I'm puzzled about how to estimate the shipping cost for my customers.  Running this through my head it seems like the ordering process will be this:

1.  customer selects merchandise and goes to the checkout page where a shipping cost is shown based on my shop address.  He pays.

2.  I get the order and email the details to my dropshipper.

3.  They pack the order and get the actual shipping cost.  They tell me the actual shipping cost and tracking number.

How can I go back to my customer with a request for additional money if the original shipping estimate was wrong?  Or even the other way, if I tell the customer I'm refunding extra shipping he paid I still look kind of like I don't know what I'm doing. 

How do you guys who work with dropshippers do this?  Do I need to buy one of the fulfillment apps to make this work?

Replies 14 (14)
Sharon15
Pathfinder
100 0 35

Hope it isn't too rude to reply to my own post, but...  :-)

I've been doing google searches and searching through the app store for solutions to the multiple shipping origin problem.  I see that I'm not alone at this party.  But all of the apps offer way more features than I need, and cost more than I can afford at this starting point in my business.  I'll probably just "mock up" shipping rates for my dropshipped products by using flat rates calculated by weight and hope I estimate well enough that it evens out over time.

Meanwhile, I'm curious:  from out here where I stand it seems like it should be simple enough for Shopify to allow us to set multiple origins and then identify an origin on each product when we enter them.  It seems so simple that there must be something I'm missing to explain why they haven't done that.  Anybody know?

This would really, REALLY benefit accurate computation of sales taxes, also!

Anne_M
Shopify Staff
498 1 59

Hi Sharon,

Sorry you have not heard back from anyone as of yet, however your own reply is great!

You are right, you would need to create your own shipping rates based on a combination of your suppliers shipping rates and your own, to cover all the potential rates you may need! In that instance, it would mean that the rates will balance themselves out! If you wanted to you could do partial shipping rate refunds. And If you feel that the original rate didn't cover the full charge, you could always issue a draft invoice for the difference as well- https://docs.shopify.com/manual/your-store/orders/create-orders

Shopify is built to accommodate the needs of most merchants most of the time as cheaply as possible, though there will be times where what you need isn't coverered and apps would be needed! As you get more sucessful you can add in apps at any time you need and even go as  far as possibly bulding your own solution using a developer!

There is a pretty new (as of October) dropshipping app from Ali Express in the app store (https://apps.shopify.com/ali ) which you might not have seen! They might be perfect for your needs as they could work as a single supplier for you.

Thanks Sharon,

Anne :)

Anne | Shopify 
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Candy_Essential
New Member
5 0 0

I have the same exact problem. The thing with dropshipping though is that you do not receive the merchandise, you let the dropshipper stock and ship for you. So how do you know the weight you need to base your prices on?

I checked out the USPS pricing page and it is mostly based of shipping type (priority, express etc...) rather than weight. Also, since you could potentially have clients from anywhere in the US, as well as dropshippers from different states, you could potentially end up with endless combinations of shipping costs/time estimates.

I thought about setting up a flat fee based on order total or item type (such as clothes). Not sure what would happen if the customer would order 5 items of different weights. Then they would get charged 5 times a flat rate which may result in a lot more than is fair.

Does anyone know of an easy way to handle this?

Anne_M
Shopify Staff
498 1 59

Hi Lucia,

You could reach out to custom shipping app developers to help you assign shipping rates build on special rules like specific products for example!

Bespoke Shipping ( https://apps.shopify.com/custom-shipping-rates ), Advanced Shipping Manager for Shopify ( https://apps.shopify.com/advanced-shipping-manager-for-shopify ) and Better Shipping ( https://apps.shopify.com/better-shipping) do offer this if you'd like to check them out!

Thanks,

Anne

Anne | Shopify 
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 - Was your question answered? Mark it as an Accepted Solution
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Carla_Durham
Excursionist
10 0 6

I had the same issue when I started creating my shipping rates. I use a dropshipper (Printify) and they charge by the product. For instance, $2.50 for first t-shirt, .90 for each additional. Unfortunately, Shopify doesn't offer this option. I spent a lot of time trying to calculate what the best rates were by weight. They're are still some flaws in my calculation. Yet, paying for an advanced shipping app wouldn't be cost effective since most of them have way more options than I need. I was surprised that Shopify didn't include this as an option.

DanSP
Shopify Partner
172 13 44

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Dan from Ryviu
Anita_Ray
New Member
2 0 1

Hey there!

I've just come upon your question. I've worked for many "corporate" retailers where we did dropship. The best way to manage your shipping costs via dropshippers is to have a prenegotiated cost set up with the vendor. This way, you are not constantly going back to your customer needing more or less.  Based on the multiple shipping costs that have come from a variety of vendors, we would come up with a flatrate cost for the customer. In some cases you may make a little money and in others you may lose a little money but it seems to even out.

Hope that helps!

Alon
New Member
2 0 0

Glad to see this topic still alive!

I'm having trouble understanding multiple shipping origins.

Currently Im using Printful and my address for shipping origin is set to their address, as their advice.thats the easy part.

If I want to add products out of Printful (ie other print on demand apps, other dropshippers) what address do I put on the shipping origin?

Im thinking to go with Shipstation, they have lower priced plans and long trial..but still- not sure at the moment.

Thank you!

All the best

Skash
New Member
1 0 0

Glad to see this topic alive for sure! 

I'm just getting to point where I'm testing my store before launch and this problem of determining shipping settings for a drop shipping business model seems to be a popular topic. 

@Alon -- did you find a solution yet? Is Shipstation working for you?

@Anita -- a prenegotiated shipping rate is a great idea and the most logical solution without having to spend considerably on an advanced shipping app, especially when I'm new at this business. 

Anyone else find any solutions or have a good idea for this?