Fuel prices are off slightly, but have you noticed where it counts? Seen any companies dropping their surcharges lately? Consider fuel surcharges the cost of doing business from this point forward.

Let’s face it, business is about making money and watching the bottom line. In stores, consumers don’t see fuel surcharges because the items are not being shipped to their homes. In the world of e-commerce, we have to charge shipping and it should not be a loser for any company.

A Brave New World…YUK!

In our pet division TheFerretStore.com we’re constantly hit with fuel surcharges. They’re on the weekly UPS bill for outgoing freight, they’re on all incoming freight bills and even the garbage hauler added a surcharge with a fun disclaimer “Due to the rising cost of fuel….”

The average fuel surcharge for UPS Ground service is around 5% while air shipments can climb to nearly 20%. If you’re not charging “actual UPS rates” for shipping from your store, you’ve been absorbing these surcharges. To combat these not-so hidden charges on nearly every bill we must pass them on to the consumer. How well they accept this new reality depends on our approach.

Explain Yourself

Two months ago for the first time TheFerretStore.com began to charge a nominal fee at the checkout called “Fuel Surcharge.” We included a link to a page where we explained the new fee, and provided a link to the UPS website where the customer can learn more about the surcharges we pay. Many consumers are unaware of these charges, so education remains the key if you plan to roll out a similar process in your business.
The surcharge has been in effect for 60 days with no complaints or questions. In part I credit the way we educate our customers at the checkout.

If you’re not charging “actual freight,” look at your costs versus shipping revenue to make sure you’re not coming out on the short end of the stick. I want you to maximize your profits right down to a few percentage points on a UPS or FedEx shipping statement. Look after the nickels and dimes. The dollars will take care of themselves.