Not sure which shipping strategy to use? Here are 5 you can use for your online storeBy Amirul Mokhtar · 22nd July, 2016
You put in a lot of marketing effort to get people to buy from your online store, but if you don’t have a proper shipping strategy, those efforts can be put to waste. Many online sellers face the problem of shoppers abandoning their carts during the checkout process. Especially after seeing the shipping calculation. But covering the cost of shipping for customers can also have damaging effect to your online business. So which shipping option should you offer? Unfortunately, there is no best answer. It’s a matter of trying and seeing which works the best for your business. Here are 5 you can choose from.
#1 Offer Free Shipping
This will usually get shopper’s attention. One of the reason why shoppers abandon their cart is because they are thrown with a completely different price at the end of the checkout process. By offering free shipping, you can prevent this from happening because there will be no extra charges for their purchase. Displaying ‘Free Shipping’ on your site with a sliding banner will definitely attract visitors to become shoppers and eventually a paying customer. This also can be an advantage over your competitors that don’t offer the same benefit. Make sure to include that you offer free shipping in all of your marketing.
Deciding to offer free shipping can also be quite dangerous to your profits because you will be absorbing the cost of delivering the goods to the customer. Before you choose to go for this option, calculate your margins to make sure there is enough room for you to absorb the cost. If you must, you can slightly increase your price to cover it. If you offer luxury, handmade, or rare items, increasing your price to cover the cost won’t be much of an issue. However, if you are in a highly competitive market, people will most likely go for the lowest price. In this case, marking up your products may not be the best idea.
#2 Charge the exact cost of delivery
Every courier company will have their shipping rates set based on the weight of the item. You can charge the same amount to your customers. Of course, it’s not necessary to have it down to the 0.01 decimal. You can use larger intervals like 500 grams or 1 kilogram. Example: for the first 500g you charge RM7 and additional RM 3 for every 500g after. You can set this using EasyStore's shipping module. This will automatically calculate the shipping charge based on the total weight of their order.
If you are unsure of the rates, you can check with the courier service provider you use to ship out your items. Related: Choosing the perfect courier partner
#3 Calculate your own rates
Yes, you can also totally make up your own rates. But be careful not to make it unrealistic. Your customers may know roughly the cost for shipping. So don't go over board or it will give your business a bad image. A good place you can start is by checking out the prepaid services of the courier company. Some courier companies provide pre-made envelopes or boxes in which you can buy the postage in advance. Each envelope or box will have a maximum weight. Use the weight and the price to calculate your own rates. You can markup the price or simply round up to the nearest whole number to make it easier for you.
#4 Flat rate Shipping
Trying to figure out the shipping rates can be a headache. Especially if you don’t carry any inventory and don’t know the actual weight of your products. In this case, you can offer a standard flat rate amount for every order or for every item. This is a no brainer if you are only selling one product or your products are roughly the same size and weight. But if you offer products that vary in weight range, you will need to put in some extra work and figure out the average cost of shipping for a parcel. You will probably be over or under the actual shipping cost by a little bit, but it should even out in the end. Little Toddler Shop uses the flat rate shipping strategy for its July Promo and charges RM6 (within Malaysia) on all orders.
#5 Use different combinations
It’s not necessary to just choose one of the many shipping options. You can use the different strategies and combine it into one strategy. IM Home Stylist combines weight based and free shipping by offering free shipping on orders above RM100 . This is a great way to offer a benefit to your customers without burning your profit. This shipping strategy can also be used to increase your average sales.
Other combinations you can use are flat rate for orders over a certain amount and weight base for anything under or if you do your own delivery for orders near your shop, you can offer free shipping for that certain zone and flat rate for other zones.
Not all online business are the same. What works for others, may or may not work for you. Testing different strategies over a period of time will help you to find the best one. You can also directly ask your customers which they prefer.
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