High Shipping Killing Business - How Widespread?

We are a discounter and, like many online retailers, discount the list price of what we sell. So we buy at wholesale, chop off some of the list price and end up with a very narrow margin to pay for advertising, credit card processing and (hopefully) profit.
We have been trying to charge just enough on our shipping and handling charge to cover actual freight and drop ship pick and pack charges.
It used to work.
But lately I wonder if this business model is fast becoming obsolete for moderately priced goods.
The actual freight charges have skyrocketed.
It's a viscous cyle, freight charges go up, we pass them on, sales go down, etc...
We know we aren't the only ones in this squeeze.
How are you all handling this?

dvdtvshows
of www.dvdTVshows.com

This is an old thread; however a thought.

If you can move inventory closer to the end customer by "forward warehousing" you could reduce your shipping charges to gain margin back.

Check out http://www.shipwire.com which has multiple warehouses in the US. put some inventory on the West coast and some in the East coast warehouse and ship from the warehouse closest the the end customer.

yes. but for thoes of us with a smaller store who cant, we just get squeezed.

high gas prices close the gap. that and people have shallow pockets because thier income is dropping

Skytopdesigns:

Small retailers is exactly who shipwire was designed for and the only way to keep margins thick with gas prices creeping up is to move inventory closer to the buyer. If your sending a 5 lbs package to a NYC buyer do you want to send it from LA or Chicago? Chicago means the carrier cost is lower.

This becomes even more important if your shipping to international customers. Shipwire just launched a Toronto, Canada warehouse

I would advertise specials that emphasize buying volume. Perhaps if you ship 3 or 4 dvds instead of 1, it might help offset the shipping costs.

Shipping is a major issue for small businesses. Most small retailers just cannot afford to do those free shipping deals on a frequent basis that larger retailers can. I'm in Canada so obviously there will be differences... but have you checked with your carrier for volume discounts or small business discounts? With Canada Post I get a business discount, plus I can qualify for additional discounts if I ship a larger package quantity per month.

The second discount I had to call and inquire about. I just asked for a customer service rep on the phone who could help me with small business shipping needs and got assistance with helping me to lower costs.