Handling Shipping Costs As An Online Retailer

How to handle shipping costs

According to a recent study, as many as 63% of website visitors will choose to cancel a purchase if they consider shipping costs to be excessive. In fact, these fees are the biggest reason for shopping cart abandonment. This being the case, it becomes clear how important it is for website owners and managers to get the shipping part of the equation right and keep these costs as low as possible. The problem is that going too far in the other direction, and offering excessively low shipping prices can affect profit margins significantly. If you’re running a website yourself, figuring out how to manage your own shipping costs and how to pass them onto customers is a very important consideration.

Let’s take a look at some tips to ensure your shipping situation is as efficient and effective as possible, ensuring you don’t scare potential buyers away.

Decide on a shipping profile

After you establish how much it costs to ship your products according to

a) the locations
b) the dimensions &
c) the weight

You need to figure out how you want to charge your clients for shipping. A flat shipping rate is one option; where every customer pays the same amount no matter where they’re having their package sent. Under these circumstances you will have some clients paying more than it costs to ship, and others paying less – the idea being that ultimately things will balance out for you. This is the most common way to charge for shipping and often the simplicity of this makes it easy for both customers and for you.

However, if you’re selling a wide range of products, it doesn’t make sense to charge the same amount for every product. You can set up multiple flat rates according to weight ranges that you need to decide on.

Another option these days is to charge exactly what you’re being charged yourself to ship the item. There are ways to set up an instant quote system on your website that comes straight from your courier or package delivery provider!

Frankly, finding the shipping option that works best for you can take a little trial and error and depends greatly on the kind of goods you’re selling.

 

Free shipping options

Some larger providers selling in bulk will actually provide free shipping on all purchases, reasoning that the risk of losing potential buyers when they realise how much shipping costs makes it worth covering these costs in the long-run. Other online retailers will offer free shipping when a customer spends over a certain amount, using online buyer’s hatred of paying for shipping to encourage more spending.

Develop an ongoing relationship with a courier

Handling your shipping requirements through a courier can be more expensive than going with the basic post system, however often it depends on the courier. There are many reliable international courier service providers out there that may offer you a reduced rate, depending on the volume of packages you are having delivered. There are many e-commerce websites that have been able to cut cost by working with a courier and it’s well worth looking into this option. The more you are shipping, the more leverage you have and chances are that you can work out a deal. Another good idea is to share an account with your suppliers, meaning stock is travelling to and from your premises. This makes it even more likely that courier providers will be willing to offer you discounted rates.

In much the same way, shopping around and using different providers depending on where you’re sending a package is a must. For instance, it may be more expensive for you to use standard post options when sending overseas, compared to using a courier provider.

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