Shipping Policy Strategy
Synopsis: To maximize your profits through shipping efficiency, build incentives for your customers to place larger orders, with a focus on averaging 3 to 4 12-ounce bags per order.
An important part of your pricing strategy is to determine what to charge your customers for shipping. Below is pricing (as of March 01, 2022) for what it would cost to ship different size orders in the US.
| Example Order | Packaging | Total weight (ounces, including packaging) | To Los Angeles | To New York City | To Chicago | To Canada |
| One 12-Ounce bag | Envelope | 14 | $6.11 | $5.72 | $5.49 | $16.68 |
| Two 12-Ounce bags | Small box | 34 | $11.63 | $9.74 | $8.10 | $20.24 |
| Three 12-Ounce bags | Small box | 47 | $11.63 | $9.74 | $8.10 | $20.24 |
| Four 12-Ounce bags | Small box | >61 | $12.54 | $10.13 | $8.20 | $20.24 |
| Two 2-Pound bags | Medium box | 72 | $13.19 | $10.80 | $8.30 | $26.13 |
To help identify some key breakpoints, we have highlighted the shipping cost per ounce and shipping cost per incremental bag below.
Cost to Ship per Ounce
| Order | Packaging | Weight (Oz.) | Los Angeles | NYC | Chicago | Average |
| One 12-Ounce bag | Envelope | 14 | $0.44 | $0.41 | $0.39 | $0.41 |
| Two 12-Ounce bags | Small box | 34 | $0.34 | $0.29 | $0.24 | $0.29 |
| Three 12-Ounce bags | Small box | 47 | $0.25 | $0.21 | $0.17 | $0.21 |
| Four 12-Ounce bags | Small box | 61 | $0.21 | $0.17 | $0.13 | $0.17 |
| Two 2-Pound bags | Medium box | 72 | $0.18 | $0.15 | $0.12 | $0.15 |
Cost per additional 12-Ounce Bag Shipped
| Packaging | Weight (Oz.) | Los Angeles | NYC | Chicago | Average | |
| One 12-Ounce bag | Envelope | 14 | $6.11 | $5.72 | $5.49 | $5.77 |
| Two 12-Ounce bags | Small box | 34 | $5.52 | $4.02 | $2.61 | $4.05 |
| Three 12-Ounce bags | Small box | 47 | $0.00 | $0.00 | $0.00 | $0.00 |
| Four 12-Ounce bags | Small box | 61 | $0.91 | $0.39 | $0.10 | $0.47 |
The key information in the last table is that it costs nothing more to ship a third bag and very little more ($0.47 on average) to ship a fourth bag.
Profits - whether for the total order or per bag - really jump when you get to the third bag! (Coffee cost and profits calculated according to the Starter plan rates - Professional and Platinum plan members earn higher margins.)
| Example Order | Retail Price | Coffee Cost | Shipping Cost | Profit | Profit per bag |
| One 12-Ounce bag | $14.99 | ($8.99) | ($5.77) | $0.22 | $0.22 |
| Two 12-Ounce bags | $29.98 | ($17.99) | ($9.82) | $2.17 | $1.08 |
| Three 12-Ounce bags | $44.97 | ($26.98) | ($9.82) | $8.16 | $2.72 |
| Four 12-Ounce bags | $59.96 | ($35.98) | ($10.29) | $13.69 | $3.42 |