Picture, a customer comes to your website, finds a product he wants at an affordable price and adds it to the cart. You might be relaxed supposing you’ve accomplished a potential customer, but you should not be.
The rest of the story, can go on likewise; the customer get to the checkout page and then it happens. He gets hit with the shipping and handling rates and all of a sudden he starts reconsidering his decision to buy.
At that moment, the product he’d liked for its quality and affordability, suddenly turned into a little expensive. One of two things happens next. Either the customer decide to press on despite the increased costs, or he abandons the cart and leave your website disappointed.
So how can you stop this happening? The real challenge when designing your shipping strategy is to determine a solution that cuts into your margins as little as possible yet remains attractive to your customers. Let’s look at the three most common shipping options and the pros and cons of each.
Offer Free Shipping
Offering free shipping – usually just for domestic orders – is a sure-fire way to get your customer’s attention, however, depending on your margins, it can also potentially cut into your profits.
Deciding to offer free shipping will require you to either absorb the cost or slightly increase your prices to cover it.
You could also try offering free shipping with a minimum order amount or minimum number of items. This should drive up your average order value.
Charge What You Get Charged
In some shopping carts, it’s possible to setup real-time shipping quotes – in other words, your customers more or less pay exactly what you would pay to ship your products.
There are always small discrepancies that can happen, of course, but in many cases you can end up breaking even between the shipping charges you collect and what you ultimately have to pay to ship the package.
This is also a good option to use for heavy or oversized shipments.
Offer Flat Rates
Your third option is to offer a flat rate for every package, or flat rates for weight ranges and order totals.
This is a best practice you should be doing anyway to make sure that you don’t drastically undercharge or overcharge your customers.
Of course, every business is different and only through testing will you find out what works best for you.
You’ll need to find out the statistics on your products and the best ways to ship them to be able to make the most strategic decision possible.