How to Avoid High Shipping Costs, Plus Other Retail Tips

When it comes to stocking your store, it can be a little bit of a guessing game as much as a data-backed science. Throw in rising costs and tariff uncertainties, and it can be downright stressful and difficult to navigate. Carol Schroeder, owner of Orange Tree Imports in Madison, Wis., answers retailers‘ questions and offers advice on learning from your mistakes and navigating higher shipping costs.

Learning From Your Mistakes

Q: Last summer I saw some wonderful bird-themed items at a trade show, and thought that songbirds would be the hot new trend in 2025. Apparently not for my customers! I’ve had to mark down most of what I bought. How can I avoid bloopers like this in the future?

A: “It’s impossible to avoid making mistakes in your buying — or your hiring, advertising and visual merchandising. These decisions are part of the creative process of running a store, and they show that you are continuously willing to take risks. But every mistake provides you with an opportunity to learn something that will improve your business in the future.

“I got a kick out of discovering that a venture capitalist and sports memorabilia collector recently started a website called The Failure Museum. Sean Jacobsohn has a passionate interest in the historical lessons of failed ventures and products. Remember New Coke? Jarts? Segways? And then there are the retailers — more than we can count, including Sam Goody, Gymboree, Sharper Image, RadioShack, Marshall Field’s and The Limited. It should make you feel good just knowing you’re not on that list!

“The lessons to be learned from failure are the reason that Jacobsohn started his collection, and as he states, ‘All progress is built on learning from past failures and mistakes.’ We are fortunate that we can put buying mistakes behind us by marking the merchandise down and clearing it out. I suggest starting with a 20 percent or 25 percent markdown while the goods are still on display. After a few weeks, put them aside to be sold at your semi-annual clearance sale for 50 percent off. Steer clear of having a permanent sale area in your store, since this can easily look messy and sad.

“Risk-taking shouldn’t be avoided but instead should be done thoughtfully. Bring in new lines or product categories in a broad but shallow assortment — offering a wide variety, but not large quantities of any one item. This will allow you to see what the customer reaction is without a big financial risk. It’s important not to be too timid in your buying, though. You’ll need enough to make a statement and to allow a range of shoppers time to come in and see the new goods.

“Another way to learn from potential failure is to use it in a theoretical exercise in which you ask yourself, and your team, ‘What would we do if there was no risk of failure?’ You might want to consider a second location, or expanded hours, or an entirely new category of merchandise. Once you’ve come up with a list, assign the amount of time and money you’d be willing to risk in order to see if this idea is a good one. You may learn, as the Museum of Failure shows, that some ideas are best left on the drawing board. But you just might discover that your shop has potential for growth in a way that you hadn’t dared consider.”

Controlling Shipping Costs

Q: Some of our vendors are adding tariff surcharges in addition to alarmingly high freight costs. This situation is making it impossible for us to be profitable. What can we do?

A: “The unknowns of the tariff situation are making 2025 a challenging year for retailers and vendors alike. When your store orders an item for $5 wholesale, for example, there may be a great deal of uncertainty as to what the price will be when it arrives two months later. You may want to wait until that time to determine what the retail price should be.

“While tariff surcharges are out of your control, it’s possible to look for favorable shipping arrangements at the time that you write the order. Many vendors offer a freight break on a certain size order or for a limited time. If you can afford to pay for and store a larger quantity of merchandise than usual, it could be worth taking advantage of these specials. Even a discount of half the shipping cost can be significant on heavy goods such as foods, decorative accessories, candles and soap.

“A good sales rep will keep you informed about freight discounts. If you place some of your orders via Faire, you might choose to take part in the Faire Insider program. You will pay about $250 a year to receive “free” shipping on a changing array of brands determined by Faire. Some of those included in the Insider Shipping program require a minimum order of $300 in order to unlock the Insider shipping benefit.

“Another way to avoid high freight costs is to buy locally. We have a number of makers and food vendors in our area who are happy to deliver their goods directly to us, since that helps them avoid the labor involved in packing and shipping their merchandise. There is much less breakage when something isn’t loaded onto a truck together with other heavy products.

“It is almost always going to be less expensive to receive merchandise in larger orders. Consolidate your purchases into as few orders as possible, based on when you need the goods as well as when they’ll be available. We have a policy that we won’t accept back orders under $50 unless the vendor is paying for shipping. That saves us money and helps keep our receiving staff from dealing with a lot of very small shipments.

“One final tip: Keystone markup is not adequate for goods with high shipping costs. If that $5 item comes in with a 10 percent tariff surcharge and shipping cost of 50 cents, it is not a good idea to sell it for the keystone price of $10. Your “landed” cost is actually $6 — so you should price it accordingly.”