AMSOIL Dealers and Retailers often face the challenge of factoring shipping costs into their margins for orders that are less than the amount to qualify for free shipping (currently $400 US and $450 in Canada). As business owners, they must balance the need to remain competitive with the necessity of ensuring profitability.
AMSOIL offers a suggested MSRP on products in the wholesale price guide. When calculating their margins, AMSOIL Dealers and Retailers should consider the cost of shipping products to their business. By not factoring in shipping charges on smaller orders, the cost of shipping AMSOIL products from the warehouse to their business could eat into profits.
To factor shipping into their margins, dealers and retailers can start by determining their average shipping cost per order. This can be calculated by dividing the total shipping cost by the number of orders. Next, they can add this average shipping cost to the cost of the product, along with any other expenses such as marketing and overhead. This will give them a total cost that can be used to determine the minimum price at which they need to sell the product to break even.
Finally, Dealers and Retailers can adjust their pricing accordingly, taking into account the level of competition in the market and the perceived value of the product to the customer. By factoring shipping into their margins, AMSOIL Dealers and Retailers can ensure that they remain profitable while still offering competitive prices to their customers.
Addressing Smaller AMSOIL Dealers and Retailers
Many times, smaller AMSOIL Dealers and Retailers with smaller cash flows cannot justify holding large inventories. Many larger Retailers, Installers and Dealers have no issues in placing an order that qualifies for free shipping. By factoring in shipping costs as part of their mark up they can help increase profits as well as cashflow.
Prior to AMSOIL offering free shipping for Dealers and Retailers everyone paid for shipping based on weight. The more a Dealer ordered the lower the cost per unit they paid. In the past we had difficulty explaining how to factor in shipping into the retail price of AMSOIL products. If you are a smaller business or dealer, consider this. $13.99 flat fee shipping on orders under $400 (US) and $450 (Canada) you could charge an extra $0.50 per quart.
Another option is to be sure you are at least charging the online retail price that AMSOIL charges on the online store at amsoil.com This factors in the shipping costs when a customer decides to buy direct. This will help you increase your margins. If that price isn’t sufficient, then consider adding additional mark-up above that pricing.
Smaller AMSOIL Dealers and Retailers make the stretch for free shipping
In most cases it is not that far of a stretch for an AMSOIL Dealer or Retailer / Installer to be able to get up to the free shipping amount considering future sales of AMSOIL products from inventory. An option for Dealers and Retailers is to look at additional AMSOIL products they could add to their inventory to resell. Just because they are a small engine shop, or a powersports/motorcycle shop doesn’t mean they can’t carry other products. AMSOIL offers a wide selection of products for automotive, powersports, heavy equipment, diesel, racing and more. With products such as Synthetic Gasoline Motor Oil, Diesel Oil, Oil Filters, Two-Stroke Oil, Transmission Fluid, Gear Lube, Motorcycle Oil, Four-Stroke Oil, Gas and Diesel Additives, Grease, Air Filters, Antifreeze/Coolant, WIX Filters, Compressor Oil and other car care products.
In our experience, as their AMSOIL customer base grows, the shipping charge on smaller orders become nonexistent due to the increase in sales and inventory as well as profits and cashflow.
If you are looking to become an AMSOIL Dealer or to sell AMSOIL in your store we would like to work with you are your sponsoring and servicing AMSOIL Dealer. We have over 25 years of experience in helping people like you.
Note about the AMSOIL Minimum Advertised Pricing (MAP) Policy
AMSOIL seeks to develop, manufacture and sell the best synthetic lubricants, filters, additives and other performance products on the market. As such, we distribute products in the U.S. and Canada through independent authorized Dealers and retailers who value AMSOIL as a premium brand and are willing to provide commensurate customer service. Dealers or retailers who advertise discounted pricing on AMSOIL products affect the perceived value of the product. To support Dealers’ and retailers’ efforts, AMSOIL maintains a Unilateral Minimum Advertised Price (“MAP”) policy.
The MAP policy is intended to (1) protect independent AMSOIL Dealer and retailer margins so they can continue to provide exceptional customer service befitting the AMSOIL brand; (2) maintain the premium standing of the AMSOIL brand; and (3) avoid unnecessary conflict in the sales channel.
MAP POLICY GUIDELINES
- The MAP policy does not nullify existing AMSOIL policies that forbid posting of pricing online. Prices of AMSOIL
products may only be posted online at www.amsoil.com. - The MAP policy applies to all U.S. and Canadian independent AMSOIL Dealers and retailers without exception.
- The MAP policy applies to the advertising of all AMSOIL products. Advertised pricing must be equal to or greater
than the Official Manufacturer’s Suggested Retail Price (MSRP) published in the U.S. Wholesale Price List (G3500),
Canadian Wholesale Price List (G8500) and any current price list addendums located in the Retail Zone.
To learn more download the AMSOIL Unilateral Minimum Advertised Price (MAP) Policy for Dealers and Retail Accounts – G3656
